Morris, Gerald J.

English

York University, Osgoode Hall Law School

Osgoode Hall Law JournalVolume 1, Number 2 (April 1959) Article 12Grafstein v. Holme and FreemanGerald J. MorrisFollow this and additional works at: http://digitalcommons.osgoode.yorku.ca/ohljCommentaryThis Commentary is brought to you for free and open access by the Journals at Osgoode Digital Commons. It has been accepted for inclusion inOsgoode Hall Law Journal by an authorized editor of Osgoode Digital Commons.Citation InformationMorris, Gerald J.. "Grafstein v. Holme and Freeman." Osgoode Hall Law Journal 1.2 (1959) : 111-115.http://digitalcommons.osgoode.yorku.ca/ohlj/vol1/iss2/12Case CommentGRAFSTEiN v. HOLME AND FREEMAN - PERSONAL PROPERTY - DEFACTO POSSESSION - DISTINCTION BETWEEN PUBLIC AND PRIVATEPLACE - RIGHTS OF FENDER VERSUS TRUE OWNER - The recentCourt of Appeal decision in Grafstein v. Holme and FreemanIis the first reported Ontario case to deal with the problem of theright to lost property where there are conflicting claims betweenthe finder of the lost property, and the owner or occupier of the placewherein the property was found.2 In the case of Bird v. The Town ofFort Frances3 an earlier Ontario decision, the issue involved waswhether a trespasser who took the lost money from the land ofanother, was entitled to it as against the Town.4 In the Grafstein case,the claim was between the finder of money and the owner of thepremises on which the money was found, a fact situation similar tothat in the leading case of Bridges v. Hawkesworth.5The appellant Holme began working -in the respondent's drygoods store on September 23, 1953. On the same day, while cleaningup the basement, which was one of Ilolme's duties, he came across apadlocked metal box covered with rubbish. He took the box toGrafstein, who told him to put it on a shelf and leave it there. Holmedid as he was told and Grafstein denied ownership of the box sug-gesting that it probably contained carpenter's tools, since substantialalterations had been made to the store in the previous year. Grafsteinclaimed to have known the box was there since 1951, but the trialjudge accepted Holme's statement that he found it under a pile ofrubbish and had taken it to Grafstein.The appellant, Freeman, started to work in Grafstein's storein the spring of 1955 and seemed to know of the box at that time.On December 31st, 1955, when the two employees were putting awayChristmas decorations, their curiosity got the better of them andthey sawed the lock off the box. To their surprise, they foundapproximately $38,000.00 in neat bundles. They bought a new lockand replaced the box on the shelf. After the store closed, theappellants told Grafstein of their find and suggested they divide themoney equally among themselves. Grafstein thought it better, "toleave it 'the way it is", and after supper they all returned to the storewhere Grafstein's lawyer was present. The lawyer turned the moneyover to the police on the understanding that if the true owner wasnot found, the money was to be returned. When the true ownercould not be found, the police turned the money over to the PublicTrustee who was ordered to pay the money into court. In an inter-pleader action, it was decided that Grafstein was entitled to themoney, and Holme and Freeman appealed that decision.1 [1958] O.R. 296. The trial judgment is reported in [1957] O.R. 354.2 See generally, Three Cases on Possession (1929), 3 Camb. L.J. 195;Todd (1957), 35 Can. Bar Rev. 962; Sommerfield (1958), 36 Can. Bar Rev. 558.3 [1949] O.R. 292..4 See Todd, ante footnote 2, where the Gfrafstein and Bird cases arecompared.5 [1852] 21 L.J.Q.B. 75; 15 Jun. 1079.19591OSGOODE HALL LAW JOURNALThe trial judge felt that the money was not "lost" since it wascarefully sorted into packages and placed in the box. He attemptedto create an intermediate classification between "lost"and "not lost"property. This distinction seems to be similar to the doctrine of"misplaced" property which has been applied in the United States.6Fortunately, the Court of Appeal found the box to be "lost"7 andthus averted the introduction of an intermediate classification intothe law of Ontario.The appellate Court also considered whether possession of thebox gave possession of the money as well. There is no clear lawon the subject,8 but the court felt that there was a rebuttable pre-sumption that a person who had possession of the receptacle alsohad possession of the contents.9 The judgment does not tell uswhether this presumption was applied, but since the Court of Appealdecided the case on the question of who had possession of the boxat the time of the finding of the money and not at the time of thefinding of the box, it would appear that the presumption was notapplied.Although it is often said that when a servant finds a lost articlein the course of his employment, he finds it for his master,10the writercan find only one case in which the decision was clearly based on thisproposition. In McDowell v. Bank of Ulster", the bank succeededagainst its caretaker in recovering £25 which he found, and the courtgave judgment on the ,basis of the master-servant relationship. Inthe Grafstein case, Lebel J.A. hints that a claim based on a master-servant relation would not succeed.12In discussing the judgment of Lord Russell of Killowen in theSharman case, LeBel J.A.'3 points out that the principle of that casewas based on the statements of Pollock and Wright.' 4'The possession of land carries with it in general, by our law, possessionof everything which is attached to or under that land, and in the absenceof a better title elsewhere, the right to possess it also."The Ontario Court of Appeal seemed to accept this statement.LeBel J.A. discussing the Sharman case points out that LordRussell extended the original statement by Pollock and Wright:"... . but the general principle seems to me to be that where a person haspossession of a house or land, with a manifest intention to exercise6 See Brown, Personal Property (1936), 3rd ed., at p. 25 for a gooddiscussion of the doctrine of misplaced property and Heddle v. Banlk ofHamilton, [1912] 5 D.L.R. 11, where the doctrine was applied in a BritishColumbia case.7 Ante footnote 1 at p. 302.8 See generally Paton, Bailment In the Common Law (1952), at p. 120and Meny v. Green, [1841] 7 M. W. 623; 151 E.R. 916.9 Ante footnote 1 at p. 306.10 See Todd, ante footnote 2 and Brown, ante footnote 6. See also Hannahv. Peel, [1945] K.B. 509 at p. 519 where Birkett J. feels that this is a sufficientexplanation of the South Staffordshire Water Co. v. Sharman, [1896] 2 Q.B.44 case, even though it is not the ratio.11 [1899] 33 Ir. L.T. 225.12 [1958] O.R. 296 at p. 311.13 Ibid., at p. 305.14 Pollock and Wright, Possession in the Common Law (1888), at p. 41.[VOL. ICase Commentcontrol over it and the things which may be upon or in it, then if something is found on that land, whether by an employee of the owner, orby a stranger, the presumption is that that thing is in the owner of thelocus in quo."1 5Mr. Justice LeBel says:"... I do not think anyone could seriously quarrel with the principle...so long as it is established in evidence as a basis for the presumptionthat the occupier has in fact the possession of the house or land withmanifest intention to exercise control over it (i.e. the land or the house)and the things which may be upon or in it . . . there must then be anatural presumption of possession in favour of the person in occupa-tion . .. "16After stating the presumption and the rebuttals made by the appel-lants, it appears that the court did not use this presumption as a basisfor giving judgment. Is it necessary to bring the presumption("natural" or otherwise) into our law? The decision in this case givesus principles (which will be shown) on which to decide a dispute ofthis kind and, the facts of an individual case will determine the claimon the basis of these principles without the necessity of introducingsuch a presumption.The appeal court attempted to discover the true basis of thedecision in the leading case of Bridges v. Hawkesworth.1 7  In thatcase, the plaintiff picked up a package containing bank notes whichhad accidently been dropped on the floor of the defendant's store. Theplaintiff handed the notes over to the owner of the store to find thetrue owner. After advertising unsuccessfully for the true owner, theplaintiff demanded the notes and the shopkeeper refused.Patterson J. said:The notes never were in the custody of the defendant, nor within theprotection of his house, before they were found . . . and the defendanthas come under no responsibility except from the communication madeto him by the plaintiff, the finder.. 18Consequently, the plaintiff got the money as against all persons ex-cept the real owner. The Ontario Court of Appeal correctly pinpointedthe ratio of the judgment (which eluded Lord Russell in the Sharmancase) by saying:* . . the shopkeeper had not the custody and owed no duty to the realowner...Surprisingly the court continues:. . . because no one had communicated to him the fact that the parcelof bank notes was on the floor of the shop. If this is the gist of theratio as I think it is . . . the occupier's ignorance of the existence of thelost article distinguishes Bridges v. Hawkesworth and Hannah v. Peel,which followed it, from the Sharman case, the Elwes v. Brigg case, andBeg. v. Rowe19It is difficult to see how communication or lack of communication tothe occupier of land, regarding the lost article, can be the distinction15 [18961 2 Q.B. 44 at p. 47.16 Ante footnote 12 at p. 305.17 Ante footnote 5.18 Ibid., at p. 1082.19 Ante footnote1 at pp. 307-308.1959]OSGOODE HALL LAW JOURNALbetween the cases mentioned, since in all of these cases the occupiersnever knew of the existence of the lost article until it was found. InBridges v. Hawkeswortk, the owner of the store did not know of thelost money until the finder brought it to him. In Hannah v. Peel20the owner of the requisitioned house knew nothing of the valuablebroach until the authorities notified him that a soldier had found itin a window casement. Also in the Sharman case, the owners of thepool knew of no rings until their employees found them. In Elwes v.Brigg Gas Company,21 the owner of the land did not know of the pre-historic boat until the tenant dug it up. Similarly, in Beg. v. Rowe,22the canal company did not know about the stolen iron until the policefound the accused. However, although communication to the occupierof land does not seem to be the ratio of Bridges v. Hawkesworth, northe distinguishing feature between the other cases, communicationwill be a factor in determining who has custody of the lost article.The court applied the ratio in Bridges v. Hawkesworth in comingto their decision:(1) ... it must be concluded that the respondent had de facto possessionor custody of both the box and contents on 31st December, 1955, thedate the appellants made their discovery... 23and(2) . . . I am satisfied that he under took its custody and assumed thelegal responsibility of a finder... 24Then why did the result differ from Bridges v. Hawkesworth? Inthat case, the court applied the above principles to the time whenthe package was found and seemed to ask whether the shopkeeper hadcustody of the package and owed a duty to the true owner at the timethe finder picked the package up. .In the Grafstein case, the courtseemed to ask these questions at the time the box was broken intoand the money discovered, a date two years after the box was firstdiscovered by Holmes. It appears that Grafstein did not have custodyof the box nor did he owe a duty to the true owner until Holme follow-ed Grafstein's instructions and put the box on the shelf. The courtnever explains why it did not consider applying these principles to thetime Holme first found the box.25 The time at which the court appliedthe principles determined the result of the case, but why did the courtapply the principles to the time the money was discovered and not tothe time when the box was first found?The Ontario Court of Appeal has stated; (1) that things foundin or attached to land are in the possession of the occupier or owner20 [1945) K.B. 509.21 (1886), 33 Ch. D. 562.22 (1859), Bell C.C. 93; 169 E.R. 1180.23 [1958] O.1. 296 at p. 311. Here the Court equates "custody" (fromBridge v. Haweswortk) and de facto possession (from Pollock and Wright).In the writers opinion, Professor Goodheart would take exception to this be-cause de facto possession is not found in the judgment of the Hawkesworlcase.24 Ibid., at p. 309.25 Possession of the box would give possession of the contents.[VOL. ICase Commentof the land, (2) that when things are found on land with a manifestintention to control, then there is a presumption that the occupier haspossession of the article, but that this presumption may be rebutted.In the Grafstein case we were not concerned with things attachedto land and we were never told whether the presumption was applied.Grafstein received the money because at the time the money (not thebox) was discovered, he had de facto possession since Holme turnedthe box over to him two years earlier and Grafstein was under a legalobligation to the true owner. When dealing with a claim for lost pro-perty found on land, perhaps the fact that one party is the occupierof land is not as important as it was before. Grafstein v. Holme &Freeman indicates that custody of the article and an obligation to thetrue owner are the tests and the mere occupation of the land on whichthe article was found may only be a factor to be considered with otherfacts in determining who had custody of the article.GERALD J. MORRISUNITED MOTORS SERVICE INC. v. HUTSON ET AL.-LANDLORD AND TEN-ANT-NEGLIGENCE-LESSOR'S OBLIGATION TO INSURE-LESSEE'S Li-BiLITY-LESSOR'S RIGHTS-The decision of the Supreme Court ofCanada in United Motor Service Inc. v. Hutson et al.1 has recentlygained attention as a result of the Ontario decision in Shell Oil Co. ofCanada Ltd. v. The White Motor Co. Ltd.2 Before analysing the prob-lems posed by this judgment, it is intended to summarise the law onthe subject down to the instant case.At common law, lessees for years were not liable for accidentalor negligent burning of demised premises. The Statutes of Marle-bridge and Gloucester, however, rendered tenants liable for waste. InYellowly v. Gower,3 it was held that the liability included permissiveas well as voluntary waste. The Conveyancing and Law of PropertyAct, R.S.O. 1927, c. 137 stated in section 31: Lessees making or suffer-ing waste in the demised premises without licence of the lessors shallbe liable for the full damage so occasioned.In the Accidental Fires Act, R.S.O. 1927, c. 146, the followingprovision is to be noted: No action shall be brought against any per-son in whose house or building or on whose land any fire shall acci-dentally begin, nor shall any recompense be made by him for anydamage suffered thereby; but no contract or agreement made betweenlandlord and tenant shall be hereby defeated or made void. Thisstatute is based on 6 Anne, c. 131 and 14 Geo. III c. 78. It wasdecided in 1847 in Filliter v. Phippard4 that the exemption "fire shallaccidentally begin" did not include a fire caused by the tenant's negli-gence. This decision has never been doubted in Britain or Canada,* Mr. Morris is presently enrolled in the second year at Osgoode Hall LawSchool.1 [19371 S.C.R. 294.2 [1957] O.W.N. 229.3 (1855), 11 Ex. 274.4 (1847), 11 Q.B. 347.1959]

Grafstein v. Holme and Freeman

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Grafstein v. Holme and Freeman

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