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Property, Subsidiarity, and Unjust Enrichment(1) |
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I. Introduction
If someone were asked, as I was, to write a paper dealing with "proprietary issues" in the law of unjust enrichment, he or she would most naturally think of proprietary consequences: that is, the extent to which unjust enrichments can be reversed by proprietary as opposed to obligationary responses. This of course would be an interesting study, although it might lack a certain promise as a comparative work, due to the well-known refusal of civilian systems to have any truck with such odd and uncontrollable devices as the constructive trust.2 Instead I have chosen to consider the interaction between the law of property and the law of unjustified enrichment from the other end: that is, the extent to which the existence of a proprietary claim affects the availability of a claim in unjustified enrichment. Or at least, I chose so to begin; for the study grew, as such things will, and in the end it has become a wider look at how and why the availability of unjustified enrichment is conditioned by the existence of other kinds of claims. The focus is on the common law, German law and the law of Quebec.
It can be described, then, as a comparative study of devices for controlling the scope of liability in unjust enrichment; but it must be emphasized that it is a study of only some such devices. The grounds on which claims can be made, the meaning of enrichment, the available defences: all of these could be described as devices for controlling the scope of liability, and so a comprehensive study of such devices would amount to a book on the subject. This attempt is obviously more limited in its amibitions, but it bears remembering that a restrictive approach taken by a system in one context can be offset by a more liberal approach in another.
II. Property
The threshold question is whether a plaintiff is allowed to make a claim in unjustified enrichment in respect of the transfer of some asset, in the case where the plaintiff remains the owner of the asset in question. A simple case will illustrate the point: if a thief steals my horse, can I sue the thief in unjustified enrichment?3
1. Common Law
The position in the common law is not definitively settled. One reason may be that the question seems to have little practical implication. The common law protects property in movables through the law of wrongs, and in particular through the tort of conversion which is a tort of strict liability. It is also a tort which does not admit of the defence of change of position. The tort claim being wider than the unjustified enrichment claim, there is no incentive to bring the latter. Even a defendant who came into possession of my horse in good faith is liable in conversion. There may, however, be some relevance where the plaintiff's proprietary right is an Equitable rather than a legal one.4 The reason is that claims for interference with a plaintiff's Equitable proprietary rights are not strict but fault-based.5 If the plaintiff were allowed to deploy an unjustified enrichment claim instead, the scope of liability might be wider.6 It is also true that such things as limitation periods and the outcome of choice of law rules might differ depending upon what type of claim the plaintiff is able to deploy.7
It has been suggested that in such a case, there is no room for an unjustified enrichment claim. One argument is that the defendant is not enriched in the requisite sense if the plaintiff retains his proprietary rights in the transferred asset.8 Under this view, the non-availability of a claim in unjustified enrichment arises as a matter of logical necessity. The argument is that the elements of unjustified enrichment are simply not satisfied.
In order to evaluate this argument, a word must first be said about the measure of recovery. Assume that the thief stole my horse one year before the time of trial. If my claim were calculated so as to represent the recovery of the value of one year's use of the horse, it would be hard to deny it. That value has clearly been transferred from me to the defendant; and presumably, such a claim would leave untouched my ownership of the horse. The more difficult question is whether I can have an enrichment claim measured by the value of my ownership. Here the objection makes sense, and indeed has a certain logical attraction: if my ownership has not been transferred, how can I say that the defendant was enriched by the value of my ownership? On the other hand, the objection ignores the common law's tendency to multiply remedies, preventing excess recovery by requiring the plaintiff to elect between them.9 For example, if I were to sue the horse thief in conversion, the normal measure of damages would reflect the full ownership of the horse, even though I remained the owner. Upon recovery of the full judgment, the ownership would be transferred by operation of law to the defendant.10 There is no reason that this system, which was necessitated by the lack of any ability to revendicate a movable thing, could not operate in unjustified enrichment claims. That is, the enrichment claim could also be measured by the value of full ownership of the horse, and upon payment of the judgment, title would pass. So, it is strongly arguable that the enrichment claim is available at common law. We now turn to other systems.
2. Roman Law
Roman law provided for the reversal of unjustified enrichment through a set of actions called condictions. These were personal claims for the transfer of a specific thing, or of a fixed amount of money or some other fungible asset. The form of words used in these claims asked for relief should it appear to the judge that the defendant "ought to give" to the plaintiff that which was the object of the claim. In this context, at least in classical Roman law if not earlier, these words were understood to imply that the object of the claim belonged to the defendant. So on the face of it, no condiction could logically be used in the case of the stolen horse with which we are concerned.
But the position was not governed entirely by logic. One of the condictions was the condictio ex causa furtiva, and Gaius observed that it could be used against a defendant guilty of furtum even though he did not become owner of the stolen thing:
This distinction between real and personal actions means that we definitely cannot seek something of our own from another by a pleading: 'if it appears that he has a duty to give'. For what we own cannot be given to us, because 'give' is to be understood as meaning giving so that it may become ours. What is already ours cannot be made more so. No doubt it was from hatred of thieves, to multiply their liabilities, that the law came to allow against them not only the claims for twofold or fourfold penal damages [actio furti] but also the pleading: 'if it appears that they have a duty to give', even though the real action [rei vindicatio], by which we claim what is ours, is also competent against them.11
Clearly Gaius viewed the claim as anomalous. The reason he gives, the hatred of thieves, is not the only one which has been suggested.12 If we take it as correct, it means that hatred of thieves leads to the allowance of an anomalous claim in order to make it easier for the plaintiff to recover, or to recover more. If, regarding the recovery of what was stolen or its value,13 the plaintiff were confined to his rei vindicatio, then he would need to prove that the defendant still had the stolen thing. He would also need to prove his "quiritary ownership" of the thing. Moreover, the value would be assessed at the time of the commencement of proceedings, whereas under the condictio ex causa furtiva, it was taken to be the highest value since the commission of the theft.14 Finally, the condiction could be brought against an heir of the thief, unlike a delictual action.15 It may be noted that the condiction, measured by the value of ownership of the thing, was alternative and not cumulative to the rei vindicatio; similarly to the common law position, the enrichment claim effectively transferred a kind of title to the defendant.16
But if allowing this claim was anomalous, it must be that the "normal" position was that no condiction was available where the plaintiff remained the owner; only the rei vindicatio could be brought. Although the concept of furtum was much wider than our modern idea of theft,17 nonetheless it was possible for the defendant to acquire the plaintiff's horse in circumstances which did not amount to furtum; he might find it, or purchase it in good faith. In such a case, it seems, the Roman law position was that there was no enrichment remedy, but only the rei vindicatio.18 If we ask why this was, we might be tempted to say that the concepts used by the Roman lawyers were not sufficiently fine-grained to distinguish enrichment by use from enrichment by a transfer of ownership. In general terms, such an idea would clearly be incorrect. The possibility of theft of possession was recognized; if an owner pledged a thing with a creditor and then took it away without the latter's consent, this was furtum.19 Moreover, there are cases in which it seems the condictio ex causa furtiva was available to a plaintiff who was a non-owner in possession, and whose possession was taken by the defendant.20 So at least against a thief, a transfer of possession could support a condiction, whether or not the plaintiff was the owner. And it has been argued that even in the absence of furtum, a plaintiff who was and remained the owner could use a condiction against a good faith finder of property.21
This brings us back to the anomaly of furtum. The discussion in Gaius suggests that it was anomalous in the sense that the claim was allowed even though the facts did not really fit the words of the formula, the defendant not being the owner. If it was possible for the owner to use a condiction even in the absence of furtum, then it was not so anomalous. But it may be that the anomaly lay in the measure of recovery. Clearly, the condictio ex causa furtiva allowed recovery measured by the full value of ownership, and was a non-cumulative alternative to the rei vindicatio. It is less clear what might be the measure of recovery in the case of a condiction brought by an owner in the absence of furtum, but one possibility would be that recovery would be measured only by the value the defendant had derived by use. This would leave the plaintiff's ownership, and his rei vindicatio, intact.
3. German Law
Most of the condictions of Roman law were codified in the BGB, but that code also added a general enrichment action.22 The doctrine which has grown up around this part of the BGB is complicated indeed.23 But the law governing the point with which we are concerned seems fairly clear. Where the plaintiff remains owner of a thing which is in the possession of the defendant, the defendant not having a right to retain possession, the provisions on unjustified enrichment in §§ 812-822 do not govern. Rather, the situation is governed by an "owner-possessor relationship" (Eigentümer-Besitzer-Verhältnis) and certain provisions of the book on property govern (§§ 987 ff). These provide for the restitution to the owner of any benefits derived from the thing by the possessor, including fruits but also use value. They also provide for the recovery from the owner of any necessary expenditures. The extent of recovery turns in large part on whether the possessor was in good faith.24
Generally, then, unjustified enrichment claims do not lie for use value. Or at least, claims which are sourced in the unjustified enrichment provisions of the BGB do not lie. If one were to ask why it is that a plaintiff can claim for the use value under §§ 987 ff, it would seem that the answer is that otherwise the defendant would be unjustly enriched.25 The use value, which belonged to the plaintiff, was enjoyed by the defendant, and so there was a transfer of wealth without a legal basis. But the measure of recovery does not include the value of ownership, and the rei vindicatio is preserved. This was the position suggested for Roman law, in the absence of furtum. The parallel is heightened by the fact that in those cases where title does not pass but nonetheless the "owner-possessor relationship" does not govern, an unjustified enrichment claim under § 812 is allowed for the value of possession, and indeed modern German lawyers still refer to it as the condictio possessionis.26
4. Quebec Law
In the Civil Code of Lower Canada, as in the French Civil Code, there was no general action for unjustified enrichment. There was a regime governing the management of the business of another (negotiorum gestio), and there was a claim for reception of a thing not due (réception de l'indu), reflecting one of the Roman condictions, the condictio indebiti.27 However, in Quebec as in France, a general action was recognized by the courts under the rubric of the actio de in rem verso.28 The general action is now codified in the Civil Code of Quebec, artt. 1493-6.
There are provisions in the Civil Code which perform a similar function to those in the BGB on the "owner-possessor relationship." Artt. 928 ff deal with the effects of possession, and generally regulate the position of a possessor who is not the owner. On the other hand, artt. 1699-1707 govern "restitution of prestations."29 Their applicability is set out in art. 1699 and via certain other provisions;30 the effect is that someone like a finder or a thief of property would be subject to artt. 931-2, but one to whom the property had been transferred by the plaintiff would be subject to artt. 1699-1707. Either way, the possessor must of course return the property if possible;31 and both regimes require a bad faith possessor to render account of the fruits and revenues of the property.32 Fruits and revenues do not, however, include use value.33 Under art. 1704, the defendant must account for use value if he was in bad faith, or if use was the primary object of the prestation, or if the property was subject to rapid depreciation. Artt. 931-2 are silent on the matter. Hence there appears to be a gap where the defendant has derived some significant use value, but the thing was not transferred as a prestation; for example, if someone has stolen my horse and used it for a year. It would be natural for this gap to be filled by a general enrichment action. Challies, relying on French decisions and commentators, thought that an enrichment by use value could support the actio de in rem verso.34 So it appears that the Quebec position is quite similar to the Roman and German positions, allowing an enrichment claim for use value only, while preserving the ability to revendicate.
5. Conclusion
In these systems, outside furtum in Roman law, it seems you cannot measure an enrichment claim by the value of ownership where ownership has not passed. The enrichment claim is not permitted to supplant the rei vindicatio. But furtum shows the possibility of another solution, one which is arguably adopted by the common law. That is, through the use of appropriate doctrinal tools to avoid over-compensation, it is possible to create a relationship of elective concurrence between the enrichment claim and the rei vindicatio. So the question becomes, why has this possibility been resisted? Why is the relationship instead one of subsidiarity?
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