Holman v Johnson

Holman v Johnson
Smugglers Tea Rooms
Court	Court of King's Bench
Citation(s)	(1775) 1 Cowp 341
Keywords
Contracts, illegality

Holman v Johnson (1775) 1 Cowp 341 is an English contract law case, concerning the principles behind illegal transactions.

The claimant, who lived in Dunkirk, sold tea to the defendant. The claimant knew it was intended to be smuggled into England, though was not concerned with the smuggling scheme. The method of payment was meant to be by bills of exchange drawn in England. The claimant brought an action for non-payment, and the defendant contended that it could not be enforced because the contract was unlawful.

Lord Mansfield CJ held that the agreement could be enforced because the seller had himself done nothing unlawful. He said the following.

The question therefore is, whether, in this case, the plaintiff's demand is founded upon the ground of any immoral act or contract, or upon the ground of his being guilty of any thing which is prohibited by a positive law of this country. — An immoral contract it certainly is not; for the revenue laws themselves, as well as the offences against them, are all positivi juris. What then is the contract of the plaintiff? It is this: being a resident and inhabitant of Dunkirk, together with his partner, who was born there, he sells a quantity of tea to the defendant, and delivers it at Dunkirk to the defendant's order, to be paid for in ready money there, or by bills drawn personally upon him in England. This is an action brought merely for goods sold and delivered at Dunkirk. Where then, or in what respect is the plaintiff guilty of any crime? Is there any law of England transgressed by a person making a complete sale of a parcel of goods at Dunkirk, and giving credit for them? The contract is complete, and nothing is left to be done. The seller, indeed, knows what the buyer is going to do with the goods, but has no concern in the transaction itself. It is not a bargain to be paid in case the vendee should succeed in landing the goods; but the interest of the vendor is totally at an end, and his contract complete by the delivery of the goods at Dunkirk.

To what a dangerous extent would this go if it were to be held a crime. If contraband clothes are bought in France, and brought home hither; or if glass bought abroad, which ought to pay a great duty, is run into England; shall the French taylor or the glass-manufacturer stand to the risk or loss attending their being run into England? Clearly not. Debt follows the person, and may be recovered in England, let the contract of debt be made where it will; and the law allows a fiction for the sake of expediting the remedy. Therefore, I am clearly of opinion, that the vendors of these goods are not guilty of any offence, nor have they transgressed against the provisions of any Act of Parliament.