David Fox wrote that money is personal property. This is a kind of property where the property rules of estates in land do not apply. This kind of (fungible) property is subject to three key characteristics.
Characteristics of Property in Money
The first characteristic is the creation of a fresh indefeasible legal title in a person who receives money as a bona fide purchaser for value. This was the attribute of so-called currency.
The second is the application of the principle of abstraction to money transfers. This refers to the capacity of legal title to money to pass by simple delivery or transfer regardless of the validity of any underlying legal transaction pursuant to which the money was paid.
The third characteristic is a relative untraceability of money. This brings with it the feature that a legal title to money is generally extinguished when the money is mixed, since it is impossible to identify the former owner's specific money asset in the mixed fund.
The three characteristics do not apply when money is transferred as a specific good or as a commodity. In these instances, it is governed by the general law of personal property.
Fungible Property
Fungible property is defined as items dealt with by number, weight or measure. If the owner lends them to another, the borrower only has to return the same quantity of things of that kind and quality rather than the very things themselves. Two assets were fungible when any actual differences between them were immaterial for the purposes of the legal liability in question. Both of them were equivalent in terms of their capacity to create or discharge the liability. Thus, money was the ideal kind of fungible property.
Legal tender was a quality conferred by the state. It suggested that offering legal tender for a purchase or for repayment of a debt was considered to be a valid tender. The relationship between legal tender and the status of a certain asset as money was only contingent. A decree that a certain kind of asset was legal tender was not sufficient to make it money in that particular state since it might not be sufficient to make the asset generally acceptable as a medium of exchange. The public would have to agree.
The Court's View
The courts did not recognize money as property unless it was widely identifiable in the community. In this way, a coin with unrecognized symbols on it was worthless until explained by an expert. The situation was illustrated in the following English Court of Queens Bench case.
The 1899 English Queens Bench case of Moss v Hancock (1899) 2 QB 111 illustrated the issues of fungible property in money. It appeared that the matter had been tried in a local court where the justices were unsure they had made the correct decision. Therefore, they packaged up the case and sent it to the Court of Queens Bench for more authoritative consideration. The technical term for this process was called a “stated case."
Justice Darling summarised the facts as follows:
The prisoner was a butler employed by the respondent. He had been convicted of stealing a five-pound gold piece from his master. The coin had been presented by the Goldsmiths’ Company to the respondent in 1887 and had been kept in a cabinet until November 1898, at which time it was stolen. It had never been in circulation.
The appellant was a second hand dealer. The prisoner went into the appellant’s shop and changed the gold coin for five sovereigns. The justices in the lower court had held that the gold coin was the property of the respondent and they made an order that it be returned to the respondent.
During argument in the lower court, barristers agreed that this issue of gold coin had been royally proclaimed as current coin of the realm. The parties could not agree as to whether the court had the power to order the coin be restored to the respondent, because it was a current coin in circulation.
The court stated that in the case of stolen money, the true owner could not recover it after it had been paid away fairly and honestly on a valuable and bona fide consideration. However, before money had passed in currency, an action might be brought in court for the money itself. Therefore, the true question in the case was whether the thief used the money in currency or not.
The court noted that many coins were withdrawn from currency but retained a value beyond their denominated amount because of their antiquity, rarity or for their beauty of design or execution.
The court then defined money in currency and not as medals, as that which passed freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offered it and without the intention of the person who received it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities.
His honour considered whether the gold piece was passed on in its character as coin of currency, or as the subject of a sale as an article of virtue. Because the parties had stated to the court that the coin was of somewhat greater value than that of its denomination and was worth more than the five sovereigns given in exchange for it, his honour found that the coin had never passed in currency. Therefore the magistrates had acted within their power to order it to be returned as personal property.
Sources:
Gavin I. Langmuir Annals of the American Academy of Political and Social Science, Vol. 395, Students Protest (May, 1971), p. 217
Keith W. Whitelam The Symbols of Power: Aspects of Royal Propaganda in the United Monarchy in The Biblical Archaeologist, Vol. 49, No. 3 (Sep., 1986), pp. 166-173.
Louis Montrose. The Subject of Elizabeth: Authority, Gender and Representation Author(s): Retha M Warnicke Source: Renaissance Quarterly, Vol. 60, No. 1 (Spring 2007), pp. 285-286.
David Fox, Property Rights in Money, Oxford University Press, Oxford, 2008.
George Seton, The Law and Practice of Heraldry in Scotland, Edmonston and Douglas, Edinburgh, 1863.
Moss v Hancock (1899) 2 QB 111.
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