The Significance of the Facts of Loss

some intention to return to it; perhaps even its existence had been forgotten. The last certainly could have been true of the quantities of money discovered in Appleyard, Moffatt and Tamworth, although in each of these cases the money must initially have been placed intentionally in the place where it was discovered, and in Tamworth there was additionally the suspicion that the banknotes represented the proceeds of crime. As for the rings in Sharman, it is easy to believe they had been lost accidentally,[2] though perhaps more romantically we might suppose they had been cast into the water as the result of some quarrel.

Consistently with academic commentary on finders,[3] we might rationalise these various factual possibilities to four general categories. First, we might say that in some cases goods have been ‘lost’. In the US literature, ‘lost’ property is that which ‘has passed out of the owner’s possession unintentionally and involuntarily’, as where a coin falls through a hole in my pocket and on to the ground.[4] The banknotes in Bridges and the bracelet in Parker could be considered ‘lost’, at least to the extent that their loser knew nothing of their separation from his control.[5] Secondly, goods might be ‘mislaid’. Unlike lost goods, initially these are removed intentionally from the custody of their holder, but later are forgotten,[6] as where I put down my umbrella while I pay for a coffee, but leave forgetting to lift it again. Thirdly, goods might be ‘hidden’, that is, intentionally placed somewhere for the purpose of concealment, whatever the motivation for such concealment. Insofar as the intention is that the goods remain concealed, the hider intends that they remain out of his custody, though he does not intend to divest himself of any property in the goods. Where that latter divesting intention is present, we might categorise the goods in question as ‘abandoned’, as did the successive courts the golf balls stolen by Mr Hibbert.

The criteria governing each of these categories relate to various intentions (or imputed intentions) on the part of the owner of the goods in question, or more accurately, on the part of the person from whose custody those goods were removed prior to their discovery. There seem to be three relevant intentions, the presence or absence of which in various combinations accounts for the designation of goods. They are (a) an initial intention to remove the goods from immediate physical custody; (b) an intention that, once removed, the goods remain out of custody; and (c) an intention to divest any property interest in the goods. We might summarise the various permutations as shown in Table 3.1.

Table 3.1: Permutations of owner’s intentions

In the United States, this classification of goods has been extremely influential in determining the nature and extent of a finder’s right in the object of her find. In England, it has not enjoyed this same influence, and whilst on various occasions it has been invoked by a court,[7] it will be argued here that our reliance on the facts of possession makes it unnecessary to use the classification to resolve disputes about entitlement to discovered goods. The better view is that questions of right in these cases depend not on the facts of loss or the consequent designation of discovered goods, but solely on the relative abilities of the parties to any dispute to establish the possessory facts of control and intention. That is not to say that the facts of loss are never relevant to English legal proceedings. On the contrary, they might serve to confirm or deny a criminal or civil liability, and this function is considered below. The point is just that they do not bear on the acquisition of right by a finder, or to put the matter another way, the facts of loss do not have any proprietary significance in English law. Insofar as this is true, this chapter concludes by suggesting that ‘finding’ cases should not be regarded as sui generis, but are a manifestation of the operation of more general rules on possession.

The Relevance of Loss and Mislaying

US State Common Law: Categorisation Designates Right

In the United States, most state jurisdictions recognise a distinction at common law between goods which have been lost and goods which have been mislaid.[8] In cases involving finders and possessors of land, this distinction has been used expressly to determine the rights of the parties. Traditionally, a finder acquires a property interest only in goods categorised as ‘lost’. Generally the state courts have felt bound in this respect by Armory v Delamirie,[9] and the rights of a finder are rehearsed in similar terms. So the finder of lost goods acquires a property in them good against the whole world, save the true owner.[10] Of course, this view rests on an artificially narrow reading of Armory, where there was nothing in the judgment to suggest that its application was confined to goods which were ‘lost’ in this sense,[11] but it has prevailed nonetheless. An instructive case is Bowen v Sullivan.[12] The plaintiff was visiting the premises of the defendants (a paper mill) and she discovered two 50 dollar bills lying on the floor in an envelope. On a promise that he would return them to her, the plaintiff handed the notes to one of the defendants to determine whether they were genuine, but the defendant refused to return them and subsequently the defendants converted the notes to their own use. Factually the case bears some similarity to Parker. The plaintiff was lawfully on the defendants’ premises, honest enough initially to turn over her find, diligent enough to secure a promise of its return, and equally subjected to a subsequent conversion of the find by the defendants in breach of their undertaking to return it. As we have seen, Parker was decided according to the relative facts of possession between the parties. The finder had a better right because the defendant board had not sufficiently manifested an intention to control the premises and objects which might have been found there. In Bowen, the matter was settled because the court was satisfied that the banknotes were lost. The trial judge directed the jury that ‘if the bank-notes were lost property and the plaintiff … found them, it does not matter where she found them; they belong to her as against every person but the loser, or real owner’.[13] The jury found for the plaintiff, and the verdict was upheld on appeal.

Whilst the better view of English law does not emphasise the place of the find as a determining factor in itself,[14] still our courts are bound to consider the facts of possession and control of premises, and in that sense the location of the find can make a difference. That those facts were not taken or considered in Bowen illustrates the divergence of English and US state law on this question.[15] Moreover, the pervasiveness of the US rule is highlighted inasmuch as on occasion a finder has been able to recover ‘lost’ goods even against one with an apparently prior possessory interest.[16] In Danielson v Roberts, for example, two young brothers succeeded in recovering US$7,000 in gold coins which they had found buried in the defendant’s land.[17] In England, even then, the defendant certainly would have been able to resist the boys’ claim.[18]

In contrast to lost goods, on the US view the finder of mislaid goods does not normally acquire any rights therein. Indeed, the general wisdom is that the discovery of mislaid goods does not amount to a ‘finding’ at all. As is said in the leading US treatise, Brown on Personal Property:

To intentionally place an article down and then go away, forgetting it, has often been held not a losing of it; thus the discoverer of the article is not a ‘finder’ and does not have a finders’ rights.[19]

In McAvoy v Medina,[20] the plaintiff customer discovered a pocket-book containing banknotes on a table in the defendant’s barber shop. He gave it to the defendant, telling him to return it to the owner if he should come looking for it, and otherwise to advertise it, which the defendant promised to do. Subsequently, the plaintiff made three demands for the money, and eventually sued the defendant for its recovery. It was agreed that the pocket-book had been placed on the table by a transient customer of the defendant and left there accidentally, and also that it had first been seen and taken up by the plaintiff.[21] On these facts, the Supreme Judicial Court of Massachusetts upheld a ruling for the defendant. The pocket-book was ‘not to be treated as lost property in that sense in which a finder has a valid claim’.[22] The plaintiff did not by discovering and picking up the pocket-book acquire any original right therein, and neither did the subsequent conduct of the defendant in receiving and holding the pocket-book create any right in the plaintiff.[23] Therefore, the plaintiff could maintain no action against the defendant.

It will be apparent that the facts of McAvoy closely resemble those of Bridges v Hawkesworth,[24] where, of course, the opposite result was reached. Bridges was cited in Medina, but not followed because the court felt constrained by a Tennessee authority we shall discuss shortly.[25] The divergence of these cases, and the divergence of Bridges from the later English authorities, means in effect that the authorities disclose three possible means of resolving disputes between possessors of land and finders, according to whether (a) the possessor of land has a prior possessory interest to the finder; (b) the possessor of land is under a legal liability to the loser of goods, and has a right in consequence of that duty; or (c) the goods in question have been lost or mislaid. It might be enough to dismiss the relevance in English law of this latter method by showing simply that it is not exhibited in the cases, but before we do this, and to make stronger our general argument in favour of possession, it will be helpful to show that there are indications in the US literature that the use of the loss/mislaid distinction to resolve these disputes is regarded as unsatisfactory.

First, authoritatively the provenance of the distinction at US state common law is to be doubted. In Medina, as we noted above, the Massachusetts court chose to disregard Bridges because it felt constrained by the ruling of the Supreme Court of Tennessee in Lawrence v State.[26] That was another case about a pocket-book left by a customer on a table in a barber shop, but the proceedings were criminal. A barber was indicted for grand larceny of US$480 accidentally left in the shop by one of his patrons. When the customer returned to the shop after realising his loss, the barber denied all knowledge of the money. The state Supreme Court upheld his conviction. In Tennessee law at that time, as elsewhere in the United States, it was axiomatic that there could be no larceny of lost goods.[27] The offence required an immediate trespassory interference with goods, which could never be present when the goods taken were out of the custody of their owner, and thus could never be present when lost goods were discovered. Counsel for the defence pressed that, for this reason, there was no larceny on the facts of Lawrence. The Court answered:

the pocket book, under the circumstances proved, was not lost, nor could the defendant be called a finder. The pocket book was left, not lost … If I place my watch or pocket-book under my pillow in a bed chamber, or upon a table or bureau, I may leave them behind me indeed, but if that be all, I cannot be said with propriety to have lost them. To lose is not to place or put any thing carefully and voluntarily in the place you intend and then forget it, it is casually and involuntarily to part from the possession; and the thing is then usually found in a place or under circumstances to prove to the finder that the owner’s will was not employed in placing it there. To place a pocket book, therefore, upon a table, and to omit or forget to take it away, is not to lose it in the sense in which the authorities referred to speak of lost property; and we are of opinion, therefore, that there was no error in the charge of the court in reference to the facts in this case, and we affirm the judgment.[28]

This reasoning was made without reference to any authority, and its novelty results in Lawrence being credited as a leading decision on the lost/mislaid distinction.[29] But it ought to be clear that the Massachusetts court did some violence in applying it to the facts of Medina. Lawrence concerned a dispute between the owner/loser of a pocket-book and a subsequent possessor. It was not a contest between two non-owning possessors, as was Medina. Moreover, the significance in Lawrence of the ruling that the goods were not lost was that it made safe the defendant’s criminal conviction. From here it is a large step to Medina, where deeming the goods not lost allowed the court to ignore Bridges and posit a new rule giving title to mislaid goods to the occupier of the land on which they were found. The better view is that Lawrence was applicable to the facts of Medina only to the extent that it confirmed that a finder or occupier would be answerable in larceny for any dishonest conversion of goods discovered,[30] and without more it had nothing to say about the property rights of these parties inter se.

Secondly, even if we accept in principle that disputes of this kind can be resolved according to the factual classification of goods as lost and mislaid, the distinction is difficult to apply. By definition the problem only arises when an owner of goods makes no claim to them, and so the court lacks direct evidence of the intentions of the person on whose intentions the distinction is said to rest. Consequently, the determination in a given case of whether goods are lost or mislaid is made on largely speculative inferences of fact, and often on flat presumptions. So, for example, where goods are found in the street, or a similarly public place, they ‘may be presumed to be lost because their situation would indicate that the owners had involuntarily parted with the possession’.[31] By contrast, where they are found concealed or hidden there is a presumption that they were parted with initially voluntarily so as not to be lost.[32] In the absence of an operative presumption, inferences are drawn from the circumstances of the case, including the nature of the premises and surroundings,[33] and in particular the situation of the found item. Where something was found on a table-top the likelihood was that it had been intentionally placed and thus mislaid, whereas if it was discovered on the floor it was probably lost.[34] There is nothing satisfactory about using such a vague and imprecise methodology to resolve disputes about title to personal property. It would not be difficult in fact or supposition for a mislaid pocket-book to be nudged inadvertently from its place on a counter to the floor, and yet with this the lost/mislaid distinction is transgressed and the rights of the parties alternatively resolved. It seems impossible to believe that basic rights to goods should be determined in such a speculative manner.

Thirdly, inasmuch as the state courts continued to affirm the lost/mislaid distinction well into the twentieth century,[35] the cases contain mixed rationales and thus admit of equivocal explanation. A good example is Foulke v New York Consolidated Railroad Co,[36] where the defendant, as operator of an underground railway service, was held to have sufficient interest in a package left unattended in one of its carriages to maintain a prosecution for petty larceny against the plaintiff finder.[37] The judgment records that the package[38] had been mislaid rather than lost, and confirms as sound the rule distinguishing these respective factual situations,[39] but ostensibly the court found for the defendant because it had assumed a duty to keep safely the goods of passengers:

After the passenger owner had left the car, forgetting to take the package with him, the plaintiff knew the package was not lost property. It or the custody of it did not belong to him then any more than it did while its owner was in the car. He saw and knew the owner had forgotten it, had left it by mistake. It then had become in the custody and the potential actual possession of the defendant. It was the right of the defendant and its duty to become as to it and its owner a gratuitous bailee. It was its right and duty to possess and use the care of a gratuitous bailee for the safekeeping of the package until the owner should call for it.[40]

Insofar as it rests the defendant’s right to the package on the duty he owed to its owner, the judgment in Foulke accords with Bridges v Hawkesworth. But in England the decision in Bridges has been superseded by developments in the general theory of possession, and there is also some evidence of these developments in the US cases. In Foster v Fidelity Safe Deposit Co,[41] the court found that the defendant company had a better right than a finder to a packet of banknotes discovered on its premises because it was in possession of them at the time of their discovery. However, the judgment proceeded to discuss a line of cases from Medina. The court held that the banknotes were mislaid; affirmed the traditional lost/mislaid distinction;[42] and thereby conflated two discrete methods of resolving disputes, ie possession and the lost/mislaid distinction.[43] But the prior possession rationale has also been applied to cases of lost goods, so that, as in England, a finder’s rights will not avail against a possessor of land who can establish a prior possessory right. In Ferguson v Ray,[44] the Supreme Court of Oregon followed South Staffs Water Co v Sharman to hold that a quantity of quartz crystal found buried in the defendant’s land was in his possession against the claim of a finder.[45] Again, though, the judgment is equally consistent with the view that, because it had been buried and thus parted with voluntarily, the quartz was not ‘lost’, and therefore the finder had no right to it.[46] Indeed, we might go further still and designate a further category of found goods, ie ‘embedded goods’,[47] title to which is given to the possessor of land in priority to the finder on the basis of a flat rule. Nonetheless, whichever of these solutions is to be preferred, the presence in the cases of such mixed rationales is a confusing influence in state common law, and adds a further layer of complexity to the already difficult lost/mislaid distinction.

In recognition of the difficulties in their application, the recent trend has been to supplement the common law rules with legislation.[48] In 1958, the state of New York imposed on finders the statutory obligation within 10 days of the find to return found goods to their owner or report and deposit them with the police.[49] Significantly, the legislation sought to override the lost/mislaid distinction, and, unless the contrary could be proved, its provision applied to all goods that were found, irrespective of their factual classification:

Since neither the finder nor the police can determine whether found property is, on the one hand, lost or mislaid property or, on the other hand, is actually abandoned property, waived property, treasure trove, or possibly in none of these categories, all found property is presumed to be ‘lost property’, and the presumption is made conclusive unless it is established, in an action commenced within six months after the date of the finding, that the property is not lost property.[50]