READING V. REGEM
2 A11ER27 (1948)



FACTS: Plaintiff joined the army and was stationed in a hospital in Cairo during the war. In March, 1944, Plaintiff was found in possession of significant sums of money well beyond his means. P apparently had been assisting some sort of illegal smuggling activity wherein he would sit in a lorry in his uniform which would allow it to pass all check points unmolested. For this activity, P was paid some $20,000 in total. There is no doubt that this was a violation of his duties in the British Army. The Military took possession of the monies. P sued to recover them. P claims they are his and should be returned. The Crown contends that they were bribes received during military employment and that he thus held the money for the Crown.

ISSUE: Is a master entitled to the unauthorized gains of his servant or agent?

RULE: A master is entitled to the unauthorized gains of his servant or agent.

HOLDING: Yes. We disagree with the Crown in that it is not entitled to moneys simply because they were obtained unlawfully. The claim the Crown may assert is that at all materials times it was P's employer. Here the cause of action is a claim for restitution for monies which in justice ought to be paid over to the Crown. It is an established principle of law that when a servant takes advantage of his service and violates the duty of honesty and good faith in order to make a profit for himself, it is the position of his service that has afforded him that opportunity. Thus if his position was the predominant reason for his ill gotten gains, he is accountable to his master for them. The law clearly says that if the servant is unjustly enriched by virtue of his service without the master's sanction, he ought not be allowed to keep that enrichment. Under these facts, P used his uniform and position in the Army to get these monies. There was no loss of profit to the Crown but it is clear that P was violating his duties and thus the money must be paid over to the master. This is not a case regarding the servant making money for himself during his master's time. For instance, if the servant were gambling during working hours, the master is not entitled to the proceeds of the gambling but is entitled to a claim for the lost time from work. P wore the King's uniform and used it to make these monies. Petition dismissed.