Taylor v Bowers (1876) 1 QBD 291
Action for recovery of goods not founded on illegal agreement
The defendant was a creditor of the plaintiff. The plaintiff made over all his stock-in-trade to a third party on the basis of fictitious bills of exchange. Possession of the goods was taken by the third party in order to frustrate the plaintiff’s creditors. Without the knowledge of the plaintiff, the third party executed a bill of sale to the defendant for the alleged purpose of securing the debt due by the plaintiff to the defendant.
The plaintiff brought an action against the defendant to recover the goods which had been detained by the defendant. Verdict was found at first instance for the plaintiff.
The Court of Appeal first observed that when the goods were transferred to the defendant they were not transferred in furtherance of the fraudulent purpose for which they had originally been transferred by the plaintiff to the third party. The fraud on the plaintiff’s creditors remained wholly unaccomplished and the return of the goods to him would make them available once more to his creditors. Nothing had been done to carry out the fraudulent purpose beyond the delivery to the third party. The plaintiff was not a party to the bill of sale to the defendant and the plaintiff had repudiated the entire action and demanded his goods back from the third party. Under these circumstances, the Court of Appeal affirmed that the plaintiff was entitled to recover the goods as the action was not founded upon an illegal agreement.