Lloyd's Maritime and Commercial Law Quarterly
TRACING IN TAYLOR V. PLUMER: EQUITY IN THE COURT OF KING’S BENCH
Lionel D. Smith *
Taylor v. Plumer is generally assumed to be authority for the “exchange product theory” of common law property, which holds that a plaintiff can assert common law property in the proceeds of disposition of an asset of which he was the common law owner. The author examines the judgment in detail, in the context of earlier decisions, related criminal proceedings, the arguments of counsel and the comments from the bench. This examination shows that the basis of the defendant’s success in Taylor v. Plumer was not an assertion of common law property at all, but rather an assertion of equitable property against a faithless fiduciary. In the result, the case is no authority for any rule peculiar to tracing at common law; in particular, it cannot stand as authority for the common law’s supposed inability to trace through a “mixed fund.”
1. Introduction
Taylor v. Plumer
1 is generally regarded as the locus classicus of the “exchange product” theory of common law property. It is seen as the case which first countenanced the idea that, where A disposes of B’s common law property without B’s authority, B can assert common law property in the product of that disposition. The key claim of the theory is that B obtains common law property independently of any intentional transfer or appropriation to him. This traditional interpretation of Taylor v. Plumer has been challenged by Khurshid and Matthews.2 In their view, the defendant’s success was based upon an equitable proprietary interest, and the case therefore tells us nothing about how common law property behaves. In this article I hope to examine Taylor v. Plumer in its historical context, and so to decide whether the traditional or the revisionist interpretation is closer to the mark.
2. The antecedent law
The only way to understand Taylor v. Plumer is to understand its context, and that context includes a number of cases decided earlier in two related fields. First, it is necessary to
* Faculty of Law, University of Alberta. I would like to thank Prof. Peter Birks for his helpful suggestions, and for the idea of investigating Taylor v. Plumer through historical sources; and Mr Paul Matthews, whose perspicacious comments improved the final product. Of course, I am responsible for any inaccuracies. I gratefully acknowledge the financial support my research has received from the Commonwealth Scholarship Commission and the Social Sciences and Humanities Research Council of Canada.
1. (1815) 3 M. & S. 562; 105 E.R. 721; 2 Rose 457; [1814–1823] All E.R. Rep. 167 (K.B.).
2. “Tracing Confusion” (1979) 95 L.Q.R. 78. This article provides the name “exchange product” theory. See also R. A. Pearce, “A Tracing Paper” (1976) 40 Conv. (N.S.) 277, 278; and now B. Fitzgerald, “Tracing at Law” [1994] Univ. Tasmania L.R. 116, 147–150.
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