State v. Rhodes

US Criminal Law

State v. Rhodes
‘Spanking’ by Norman Rockwell

Drawing the line between judicial governance of the family unit, or in the very least of cases, domestic relationships, was a task discussed in a case dating back to 1868, in which a spouse was prone to seek reparation in the criminal courts when her husband struck her in a manner designed to enforce compliance at a time when women and children’s rights were quite literally unheard of.

Having suffered three blows of the defendant’s switch, which by law could be no wider than a man’s thumb, (hence the phrase ‘rule of thumb’), the defendant was indicted for assault and battery before the North Carolina Supreme Court, on grounds that his actions were unprovoked and therefore unlawful, and upon which the court was tasked with an examination of leading case precedent in order to ‘draw the line’ as to when they were entitled to probe further into such apparently trifle matters.

In the first instance, the court turned to State v. Hussey, in which the court had recently held that:

“[A] wife may be a witness against her husband for felonies perpetrated, or attempted to be perpetrated on her, and we would say for an assault and battery which inflicted or threatened a lasting injury or great bodily harm; but in all cases of a minor grade she is not.”

Before reviewing State v. Black, in which the court had more recently held that:

“A husband is responsible for the acts of his wife, and he is required to govern his household, and for that purpose the law permits him to use towards his wife such a degree of force as is necessary to control an unruly temper and make her behave herself; and unless some permanent injury be inflicted, or there be an excess of violence, or such a degree of cruelty as shows that it is inflicted to gratify his own bad passions, the law will not invade the domestic forum or go behind the curtain.”

While also choosing to venture further into the use of physical discipline not only upon wives, but children, both at home and in the school system, where the court gave weight to State v. Pendergrass, in which the court earlier held that:

“[T]eachers exceed the limits of their authority when they cause lasting mischief; but act within the limits of it, when they inflict temporary pain.”

And so with a brief review of existing legal opinion, much of which was in a state of conflict when it came to both the use of ‘correctional’ force, and the means with which it could be dispensed, the court insisted that without further evidence of argument to the contrary, they were reluctant, if not powerless, to delve beyond the facade of marital or educational affairs unless there was compelling evidence that the injuries complained of were to prove lasting and detrimental to either party’s health, thus the case was dismissed in full while the court rightly or wrongly held that:

“Every household has and must have, a government of its own, modelled to suit the temper, disposition and condition of its inmates.”

Ivey v Genting Casinos UK Ltd

English Criminal Law

Ivey v Genting Casinos
‘The Card Players’ by Paul Cézanne

In a case that was to result in a reduction of the Ghosh two-step dishonesty test, a professional card player is left with no choice but to pursue his winnings in the courts when the gaming establishment liable for the payout, cries foul on the pretence of cheating, which itself proves a concept that continues to elude judicial narrowness due to its mutable interpretation and seemingly countless applications.

Having established himself as reputable ‘advantage’ poker player in his home country of the United States, the appellant had spent a considerable number of hours playing Punto Banco at the respondents gambling house in Mayfair London, when at the point of his retirement, he had amassed winnings in excess of £7.7m, after which the respondents refused to release the funds on the premise that when playing against the house, the appellant had resorted to a number of techniques that were considered violative of the rules of play.

With no option other than to litigate, the appellant appeared before the Court of the Queen’s Bench, claiming recovery of his winnings while the respondents held that in short, the appellant had ‘cheated’ under s.42 of the Gambling Act 2005, which reads in part that:

“(1) A person commits an offence if he (b) cheats at gambling….”

While the Act also notes that:

(3) Without prejudice to the generality of subsection (1) cheating at gambling may, in particular, consist of actual or attempted deception or interference in connection with (a) the process by which gambling is conducted….”

In the first instance, the court noted that there was uncertainty as to whether the element of dishonesty was applicable to a claim of cheating, or if by definition, the act itself denoted dishonest intent, regardless of objective or subjective jury opinion, all of which left the court unable to determine if s.42 had in fact been breached, and so instead concluded that such claims would be best remedied in a civil court, thus the claim was dismissed, while the court held that:

“What precisely is condemned as cheating by section 42 of the 2005 Act and what must be proved to make out the offence is not, in my view, clear and it would be unwise if it is unnecessary, as it is, for me to attempt to determine what that might be.”

Whereupon the appellant pursued his claim in the Court of Appeal, who conversely held by a majority that the Ghosh test had no place in a cheating scenario, and was thus inapplicable to s.42 of the 2005 Act, although it was held by Lady Justice Arden that:

“[A] person may be liable to a criminal penalty for cheating if he deliberately interferes with the process of a game so that the game is then played to his or another’s advantage in a way which was never intended by the participants.”

And so when presented to the Supreme Court, the appellant continued his line of argument, while the court attempted to establish if dishonesty as defined by Ghosh, was to become an integral part of cheating under the 2005 Act, and if so, whether the appellant was guilty, and thereby liable for sentencing.

For clarity, the Ghosh test for dishonesty was based on the principle that:

“It is no defence for a man to say “I knew that what I was doing is generally regarded as dishonest; but I do not regard it as dishonest myself. Therefore I am not guilty.” What he is however entitled to say is “I did not know that anybody would regard what I was doing as dishonest.””

Thus having provided a thorough examination of the case itself, along with the mottled history behind the Ghosh test, the court took the liberty of simplifying the dishonesty test through the removal of the subjective element, and so while finding the appellant liable for cheating through his manipulation of the croupier, the court dismissed the appeal, while revising their standing on dishonesty by holding that:

“When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”

Queensland Mines Ltd v Hudson

Australian Equity & Trusts

Queensland Mines Ltd v Hudson
‘Three Miners’ by Josef Herman

While the strictness of fiduciary duties within a corporate entity are prime examples of greed overshadowing obligation, this particular case demonstrates the need for contextual adjudication when examining the seemingly selfish actions of those shouldering such burdens.

Having been appointed managing director of a company designed to pursue mining opportunities within the Australasian continents in 1958, the respondent was later sued for breach of duty when obtaining coal and iron ore mining licences from the Tasmanian government by way of his position.

In the first instance, the Equity Division of the Supreme Court of New South Wales found in favour of the appellants, although legal recourse was unavailable due to its commencement beyond the statute of limitations, and so upon appeal to the Privy Council, the council was compelled to review the findings of the supreme court, while dissecting the sizeable case material used.

Here the council found that although the respondent had been serving as a director at the time negotiations had begun, it was also evident that a severe loss of capital over the preceding years had resulted in the respondent placing the company in ‘stasis’ whilst seeking alternative funding to carry out the work should they eventually receive the licences.

In addition to this, it had been made expressly clear by the board of shareholders following the receipt of the licences in 1961, that they no longer had any financial interest in the company, and that the appellant was free to pursue the benefits arising from the mining of the land available. 

However in March 1962, the appellants had also sold their existing interest in the company to a third party for the sum of £2500, and so despite any claim of breach, they had by all accounts financially, contractually and orally divorced themselves from the company and those still remaining, and so when establishing the fiduciary parameters required for such a case, the council turned to Boardman v Phipps, in which Cohen LJ had held that:

“[I]t does not necessarily follow that because an agent acquired information and opportunity while acting in a fiduciary capacity he is accountable to his principals for any profit that comes his way as the result of the use he makes of that information and opportunity.”

And so basing their judgment on the strength of Boardman the council noted that not only had the respondent been transparent in his dealings with the Tasmanian government and the appellants, but that the appellants themselves had unequivocally shown their disinterest both in the value of the company and the actions of the respondent prior to their departure; and so with little hesitation the council dismissed the appeal while holding that:

“[A] limit has to be set to the liability to account of one who is in a special relationship with another whose interests he is bound to protect.”

Brokaw v. Fairchild

US Property Law

Brokaw v Fairchild
Image: ‘Lower Fifth Avenue’ by Frederick Childe Hassam

Life tenancy and title to a freehold estate are two distinct modes of occupation, however the latter is absolute in its effects, while the former includes limitations and covenants where directed by the transferor. On this occasion, a sizeable dwelling in an enviable part of New York was subject to possible demolition plans when the relatives of the new owner challenged it within the courts.

In 1886, the deceased had purchased land in Manhattan for the purposes of building his own private residence. Having designed the home to his own specifications, the property was bequeathed to one of his sons in a will drafted in 1907, which read:

“By the Fourth clause of my Last Will and Testament, dated and executed on the 20th day of April, 1907, upon the death or remarriage of my wife I gave and devised my residence, situated at the northeasterly corner of 79th Street and Fifth Avenue, in the City of New York, to my son, George Tuttle Brokaw…”

However the deceased then further explained that:

“I now hereby modify that provision of my Will and after the death or remarriage of my wife I give and devise my said residence to my son George Tuttle Brokaw for and during the term of his natural life…”

Which in effect reduced the powers granted to the now claimant, to those answerable to the principles of life tenancy as prescribed by state law. Here, it was held that any alteration of a property resided in under inheritance as a life tenant, must be proven as non-injurious to the value and aesthetic appearance of the property when passed to those due under the terms of the original testator.

The issue in hand was one where the claimant had proposed the demolition and rebuilding of the home so as to enjoy increased revenue from the leasing of multiple apartments over that of a single, albeit ornately furnished home. In fierce objection, a number of siblings sought reference to the terms contained within their own terms of inheritance, which while providing clear stipulations as to individual use, were not applicable to the terms in which the claimant had acquired use of this particular home.

Therefore by use of existing precedent, the New York Supreme Court drew attention to Winship v. Pitts, in which Chancellor Walworth remarked:

“I have no hesitation in saying, that by the law of this state, as now understood, it is not waste for the tenant to erect a new edifice upon the demised premises; provided it can be done without destroying or materially injuring the buildings or other improvements already existing thereon. I admit he has no right to pull down valuable buildings, or to make improvements or alterations which will materially and permanently change the nature of the property, so as to render it impossible for him to restore the same premises, substantially, at the expiration of the term.”

And Kidd v. Dennison, in which the court held that:

“[I]f the tenant materially changes the nature and character of the buildings, it is waste, although the value of the property should be enhanced by the alteration. The tenant has no authority to assume the right of judging what may be an improvement to the inheritance. He must confine himself to the conditions of his lease.”

So with an appreciation of not only the financial opportunities but the limitations of the tenancy and wishes of the testator, the Court held that under no circumstances did the claimant have any express rights to enjoy the benefits of his inheritance beyond those powers conferred, and that to do otherwise was abjectly unlawful and subject to obvious penalty.

Anderson v. Minneapolis, St.Paul & Sault Ste. Marie Railway Co.

US Tort Law

Anderson v Minneapolis
Image: ‘Train Painting’ by William Wray

The amendment of pleadings is an American civil right when free from the misdirection of a jury, and so on this occasion the intermingling of two events resulting in the destruction of property, allowed the claimant to establish reasonable causation before enjoying the benefits of restorative justice.

In August of 1918, it was alleged that sparks emitted from a locomotive engine owned by the defendants caused a bog fire that while unextinguished, continued to burn for an extended period, largely due to the usual drought conditions at the time. During early October, there were winds in excess of 75 miles per hour, which exacerbated the existing fire, while driving it towards the home of the claimant.

It was the subsequent effects of this natural occurrence that left the claimant’s home damaged and thus both the railway company and the Director General of Railroads ended up in the courts as co-defendants, as was permissible under § 10 of the Federal Control Act.

During the trial, there were two options open to the jury for a safe conviction, namely:

“If plaintiff was burned out by fire set by one of defendant’s engines in combination with some other fire not set by one of its engines, then it is liable.”

or:

“If the bog fire was set by one of defendant’s engines, and if one of defendant’s engines also set a fire or fires west of Kettle River, and those fires combined and burned over plaintiff’s property, then the defendant is liable.”

With confusion as to how best to approach the claim, the jury asked for confirmation as to whether liability could be found if it was agreed that the fire caused by the locomotive engine was significant enough to have been the primary contributor to the eventual fire that caused the damage, at which point the court agreed that it would. It was then that the claimant amended his pleading to one where both fires had been the sole cause of destruction to his home, as opposed to that of the bog fire alone.

While returning a verdict in favour of the claimant, the defendants argued that such pleading allowances were unlawful, before appealing to the St. Louis District Court, who denied a motion for a retrial, while allowing for the consideration of the Minnesota Supreme Court.

Here consideration was given to both the discretion of the courts to allow for claim amendments, and the extent to which the Director General of Railroads is lawfully implicated. In the first instance, the Court explained how § 7784 of Ch. 77 of the Minnesota Statutes 1913 noted that:

“No variance between the allegations in the pleading and the proof is material unless it has actually misled the adverse party to his prejudice in maintaining his action or defence on the merits.”

Which on this occasion the court had already established which fires were attributable to the defendants, and at no point had any objection or evidence been shown to prove otherwise, while under § 4426 of Ch. 28 of the Minnesota Statutes 1913 also made it clear that:

“Each railroad corporation owning or operating a railroad in this state shall be responsible in damages to every person and corporation whose property may be injured or destroyed by fire communicated directly or indirectly by the locomotive engines in use upon the railroad owned or operated by such railroad corporation…”

It was further held that within the terms of the Transportation Act of 1920, Congress conferred no express limitations as to the powers of the Federal Control Act, and that evidence of this was available under §§ 202 and 206 of the amended statute, and so it was that for these reasons the Court refused to reverse the original decision and dismissed the appeal.

 

Stewart v. Gustafson

Canadian Property Law

Stewart v Gustafson
Image: ‘Old Farm Truck’ by Rick Mock

Conversion of seemingly abandoned property is not without the law, however there are inherent differences as to how best to remove or despatch such property, while considering the enduring proprietary rights of the original owners. In a matter concerning a number of goods of varying value, the claimants sought damages for loss, when after giving ample notice for their removal, the recent freehold purchasers took steps to enforce their rights to enjoyment of the land now owned.

Under a conveyance dated May 2 1994, the respondents purchased land from the claimant’s mother, on condition that time be given for the removal of specific items owned by her son and daughter-in law. With an express threshold of July 31 1994 for all items outstanding, the claimants removed a portion of the items listed, after which no attempts were made to recover the remainder.

Noted within the conveyance was express mention that:

“Any items remaining after deadline shall be considered abandoned and can be disposed of in discretion by the purchaser who will exercise prudent discretion.”

And so upon expiration of the agreed threshold, the respondents proceeded to both remove and where possible, sell the items either privately for profit, or by way of scrap, with the remaining few items kept under secure storage.

At the point of litigation, the claimants argued that unless stated, the items both sold and left in situ, were still under ownership, and that no acquirement of title has succeeded, despite no attempts to remove them beyond the period stated. With reference to the principle of abandonment, the court observed the academic position adopted in ‘The Abandonment and Recaption of Chattels’ (1994) by Lee Aitkin, in which it reads:

“The act of abandonment, in Pollock’s terms, confers a revocable licence which is only terminated when a subsequent possessor manifests dominion over the chattel with the intention of possessing it to the exclusion of others, including the former possessor.”

However in ‘Is Divesting Abandonment Possible at Common Law’ (1984) by A.H. Hudson, it was argued that abandonment through intention was sufficient enough to warrant acquisition by those taking new ownership, (otherwise known as ‘divesting abandonment’) which in effect, created further confusion as to how best to ascertain when property has been lawfully abandoned.

In Canada (Attorney General) v. Brock, the Canadian Supreme Court had earlier turned to American jurisprudence when adhering that once relinquished of title, such property remains abandoned until appropriated by those intending to take ownership, while ‘Black’s Law Dictionary’ (1979) clarified how:

“Abandonment includes both the intention to abandon and the external act by which the intention is carried into effect.”

With particular regard to the case in hand, McCutcheon v. Lightfoot had enabled the Supreme Court of Canada to rule how:

“[A]bandonment of a chattel may be inferred in circumstances where an owner fails to remove his or her chattels within a reasonable time after receiving notice from the proprietor demanding their removal. In such circumstances, the destruction, consumption or sale of the chattels would not constitute a conversion thereof.”

While in Addison on Torts (7th Edn), it was equally argued that:

“A man cannot be made a bailee of goods against his will; and, therefore, if things are left at his house, or upon his land, without any consent or agreement on his part to take charge of them, he is not thereby made a bailee of them.”

Thus with close examination of the rights afforded both parties, the court held that the items retained and sold or disposed of, were subject to five distinct groups, within which three were estopped from right of claim, damages for conversion were awarded at $300 for the item sold privately and the final group remained abandoned unless agreed otherwise.

Chan v Zacharia

Australian Equity & Trusts

Chan v Zacharia
Image: ‘Doctor’s Office’ by Norman Rockwell

Matters of contract and the fiduciary elements of a working partnership, become at odds in a case involving opportunism with little regard to the details of the agreement signed when two former business partners acrimoniously part ways.

In 1979, two doctors agreed to set up a joint practice in an enviable part of Adelaide, and upon doing so, drafted a partnership agreement that established express terms around honourable working practices, and an ethical approach to the future of the enterprise. Sadly, as often happens in commercial relationships, the two men found working together intolerable, and so agreed to dissolve the practice.

One of the attractive features of the property was that of its location and the option to renew the lease for another two years, on the proviso that both partners were complicit in its execution. However, at the point of litigation, the appellant had shown clear reluctance to renew the lease, thus leaving the respondent no choice but to circumnavigate the matter as best as possible.

While the two parties had terminated the business, there was still a portion of the existing lease remaining, of which an equal share was held by both men, and yet in a strange turn of events, the landlord agreed to extend the lease to the appellant, and accordingly wrote to confirm this to the respondent. This prompted action by the respondent on grounds that the appellant had breached his fiduciary duty in accepting the new lease while inheriting the value of the interest of the existing lease, and that by doing so, he held the new lease as a constructive trustee on the equitable principle that the lease was an asset of the former partnership and therefore under a right of claim.

This contention was duly supported by the Supreme Court, at which point the appellant sought the wisdom of the High Court. Here, s.38 of the Partnership Act 1891 (SA) noted that:

“After the dissolution of a partnership the authority of each partner to bind the firm, and the other rights and obligations of the partners, continue, notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise.”

While s.39 also stated how:

“On the dissolution of a partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after such payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners to the firm; and for that purpose any partner or his or her representatives may on the termination of the partnership apply to the Court to wind up the business and affairs of the firm.”

However, clause 26 of the partnership agreement clearly expressed that any surplus assets remaining after payment of debts, liabilities, expenses and amounts due to the partners, was to be divided equally through the execution of observation of all legal instruments and Acts, and the provisions contained therein.

This was the position adopted in Hugh Stevenson & Sons Ltd v Aktiengesellschaft Fur Cartonnagen-Industrie, where Romer LJ remarked:

“[W]herever the legal estate may be, whether it is in the partners jointly or in one partner or in a stranger it does not matter, the beneficial interest…belongs to the partnership, with an implied trust for sale for the purpose of realising the assets and for the purpose of giving to the two partners their interests when the partnership is wound up and an account taken…”

A fact that was equally present in clause 19 of the partnership agreement, which required each partner to:

“[D]evote his whole time (subject to annual leave) to the medical practice, to act in all things according to the highest standards of professional conduct and be just and faithful to the other partner in all transactions relating to the partnership…”

And so it was for these undeniable reasons, that the Court held (by majority) that when agreeing to and pursuing the opportunity to secure an extension of the lease after refusing to cooperate with his former partner, the appellant did, by virtue of his selfishness, breach what remained of his fiduciary capacity, and in doing so, became a constructive trustee for the value of the lease, and thus owed account to the respondent in kind.