CHAPTER XXI.

OSTENSIBLE OWNERSHIP AND AGENCY-GOODS-POSSESSION.

Cases involving estoppel because of ostensible ownership of goods may be divided broadly into:

1. Those in which some one other than the owner is in possession of the goods themselves.

2. Those in which some one other than the owner is in possession of documents of title to the goods.

The present chapter will be devoted to the former of these branches of the subject, leaving the latter to succeeding pages. Land and Goods. In the three preceding chapters we have been dealing with the rules at present in vogue with reference to priorities in cases relating to land. Two of these rules, however, are sometimes applied to the decision of cases involving chattels, namely, those relating to the legal estate and to priority in point of time. But it is very curious to notice that in cases concerning goods the principles of estoppel are much more frequently appealed to than in litigation relating to land. Perhaps one might have so anticipated, for the rules were evolved in real-estate cases, while the principles of estoppel by misrepresentation had their origin very largely in actions relating to personal property.

Having already said all that is necessary with reference to the rules, and having shown that even in relation to land they should be superseded by the principles of the law of estoppel, we shall in the present chapter deal with questions of ostensible ownership (by possession) of goods as determined by those principles. Indeed, the cases that we shall meet themselves usually so proceed, although here and there the old rules are brought into requisition.1

Accrediting the Title.- For example, we are quite familiar, in the law of personal property, with the statement that the maxim nemo dat quod non habet

"will certainly not apply where the owner of goods has lent himself to accredit the title of another person."2

1 See notably Reg. v. Shropshire (1873), L. R. 8 Q. B. 420; L. R. 7 H. 14. L. 496; 45 L. J. Q. B. 31.

2 Boyson v. Coles (1817), 6 M. & G.

But such a dictum, although transparently reasonable and just, could hardly have been uttered in a real-estate case. There the courts would have distinguished between legal and equitable purchasers; and between frauds, actual, constructive and incomprehensible; about all which, as will be observed, our dictum says nothing. Taking it, nevertheless, as sound, we have now to inquire as to the circumstances under which it may be said that possession of goods will accredit the title to them.

Mere Possession.- And we may commence with the broad assertion that mere possession, apart from special circumstances, does not accredit title, or in other words, is no evidence of title — usually a man cannot be said to be the ostensible owner of goods merely because he has them in possession.2

"The mere possession of chattels, by whatever means acquired, if there be no other evidence of property, or authority to sell from the true owner, will not enable the possessor to give a good title."

If it did, and if I loaned my horse to a friend, I might be estopped from asserting my title as against an innocent purchaser; for I would have accredited the title- I would have assisted in the fraud by giving to my friend evidence of his ownership of the horse. But that is not the law.

"If I hand my watch to a man to keep for me, though I in a sense enable him to appear to be the owner, yet if he sells or pledges it I do not lose my property."4

It is for this reason that when chattel property is sold and possession delivered upon hire-and-sale contract, with an agree

1 Ante, p. 259 ff.

2 Newbold v. Wright (1833), 4 Rawle (Pa.), 212; Saltus v. Everett (1838), 20 Wend. (N. Y.) 267; Peerless, etc. v. Gates (1895), 61 Minn. 124; 63 N. W. R. 260; Baker v. Taylor (1893), 54 Minn. 71; 55 N. W. R. 823; Hedderly v. Backus (1893), 53 Minn. 27; 55 N. W. R. 116; Sage v. Shepherd (1896), 39 N. Y. Supp. 453; 4 App. Div. 290; 52 N. E. R. 1126; Atlanta v. Hunt (1897), 100 Tenn. 89; 42 S. W. R. 482. Article 1599 of the French Civil Code declares that "La Vente de la chose d'autrui est nulle;" but article 2279 provides that "En fait de meubles, possession vaut titre." There are special provisions as to lost or stolen goods, but, with these

exceptions, an innocent purchaser from one in possession is protected. See also the German Code, 1896, $$ 931-935.

The Indian Contract Act of 1872, section 108 (2), provides that, if one joint owner of goods “has the sole possession of them by the permission of the co-owner," a purchaser for value without notice acquires a good title.

3 Per Bronson, C. J., in Covill v. Hill (1847), 4 Denio (N. Y.), 327. And see McNeil v. Tenth Nat. Bank (1871), 46 N. Y. 330.

4 Per Bramwell, B., in Gabarron v. Kreeft (1875), L. R. 10 Ex. 281; 44 L. J. Ex. 243.

ment that the title is not to pass until the price is paid, the vendor is not estopped from setting up his title as against subpurchasers.1 Owing to the very general adoption of this method of sale, however, the legislatures have in some jurisdictions intervened and altered the law in respect to possession of goods by vendees (and also by vendors) as indicative of title.2

Possession Implying Ownership.-The cases in which possession may be taken as indicative of ownership usually turn upon (1) the character of the goods; or (2) the character of the place to which they are sent; or (3) the customary employment of the person to whom they were intrusted. Other cases arise, but they are usually those in which circumstances other than that of possession point to ownership.

I. Character of the Goods.-The reasonableness of the following is clear:

"Goods which from their nature are intended to be fixed to and become part of realty are given into possession of a bargainee under a contract of conditional sale; and if these goods are attached to the realty, the vendor may be estopped from setting up his title as against an innocent purchaser for value."3

And the distinction between allowing furniture to remain in the house of a jeweler and permitting him to expose your diamonds among his own in his shop can readily be appreciated. In Meggy v. Imperial, where a trustee in bankruptcy had allowed furniture to remain in the hands of the bankrupt, who had mortgaged it, Bramwell, L. J., said:

"If a wine merchant be left in possession of wine, the fair inference is that it is his own, and a person may be justified in advancing money upon the security of it; here the goods being household furniture, no inference would be drawn that the insolvent had them in his possession for the purpose of selling them."

II. Character of the Place.-The character of the goods is usually important, however, only in connection with the character of the place to which they are sent. For example, in the

1 Mason v. Bickle (1878), 2 Ont. App. 291; Austin v. Dye (1871), 46 N. Y. 500; Zutchman v. Roberts (1871), 109 Mass. 53; Miller v. Parker (1893), 155 Pa. St. 208; 26 Atl. R. 303; Rodgers v. Bachman (1895), 109 Cal. 352; 42 Pac. R. 448; Ensley v. Lewis (1899), 25 S. R. 729 (Ala.); Cottrell v. Carter (1899), 53 N. E. R. 375 (Mass.). See a distinction in Comer v. Cunningham (1897), 79 N. Y. 391.

2 See ch. XXIII.

3 McDonald v. Weeks (1860), 8 Gr. 297. But see Vulcan v. Rapid City (1894), 9 Man. 577. Distinguish Stevens v. Barfoot (1885), 9 Ont. 692; 13 Ont. App. 366; Polson v. Degeer (1886), 12 Ont. 275.

4 (1878) 3 Q. B. D. 717. And see 47 L. J. Q. B. 119. See Giannone v. Fleetwood (1893), 93 Ga. 491; 21 S. E. R. 76.

case just referred to, it was not merely because the goods were classed as furniture that the true owner escaped; for if they had been sent to the shop of a furniture dealer the result would certainly have been different from what it was. The true rule

(for all sorts of goods) is that laid down by Lord Ellenborough as early as 1812:

"If the principal1 sends his commodity to a place where it is the ordinary business of the person to whom it is consigned to sell, it must be intended that the commodity was sent thither for the purpose of sale. When the commodity is sent in such a way and to such a place as to exhibit an apparent purpose of sale, the principal will be bound and the purchaser safe."2

The same rule is manifestly applicable not merely to a case in which goods are intrusted to the proprietor of a business, but also where some person (in truth an agent merely) is provided with a shop and a stock, and so becomes in appearance a trader and the proprietor of the business.3

And not only by permitting a trader to present the appearance of ownership of property will the true owner be estopped as against purchasers, but he may also be estopped as against creditors of the trader who, upon the faith of such appearance, have given him credit.*

III. Usual Employment of the Person.-There are many cases in which possession of goods will be evidence or appearance of their ownership, because of the nature of the usual employment of the person intrusted with them. Factors are not within the scope of the present chapter. Their possession does not indicate ownership, but agency merely. Their case therefore falls under the heading of ostensible agency, and will be dealt with in another chapter.5

1 It would be better to say "If the owner."

2 Pickering v. Busk (1812), 15 East, 43. And see Lausatt v. Lippincott (1821), 6 Serg. & R. (Pa.) 392; Towle v. Leavitt 1851), 23 N. H. 358; Taylor v. Pope (1868), 45 Cold. (Tenn.) 416; Quinn v. Davis (1875), 78 Pa. St. 15; Spooner v. Cummings (1890), 151 Mass. 313; 23 N. E. R. 839; Lewenberg v. Hayes (1897), 91 Me. 499; 39 Atl. R. 469; Atlanta v. Hunt (1897), 100 Tenn. 89; 42 S. W. R. 483; Heath v. Stoddard (1898), 91 Me. 499; 40 Atl. R. 547; Van Duzen v. Inngleblut (1899), 77 N. W. R. 970 (Minn.).

3 Smith v. Grouette (1895), 2 Man. 314. And see Ramazotti v. Bowring (1860), 7 C. B. N. S. 851; 29 L. J. C. P. 30; Ex parte Dixon (1876), 4 Ch. D. 133; 46 L. J. Bk. 20. Merely finding a person in charge of a shop does not warrant the conclusion that he has authority to purchase goods. Vineberg v. Anderson (1890), 6 Man. 335.

4 Troughton v. Gitley (1766), Amb. 630. See the subject discussed ante, ch. XI.

5 Scientifically it should be dealt with in chapter XXVI, which treats of ostensible agency. The Factors Acts, however, do not accurately dis

Traders.- Bankruptcy acts sometimes contain provisions known as reputed-ownership clauses. They constitute a sort of statutory estoppel peculiar to persons in trade or business, and varying in its principles from those beaten out by the courts. The English act has the following:1

"All goods being at the commencement of the bankruptcy in the possession, order or disposition of the bankrupt in his trade or business by the consent and permission of the true owner, under such circumstances that he is the reputed owner thereof,"

shall form part of the estate. Observe the points of agreement and difference between this provision and the law of estoppel: 1. They agree in requiring the consent and permission of the owner-goods stolen or borrowed, or otherwise wrongfully placed as part of the trader's stock, will not affect the owner. 2. They agree in requiring an appearance of ownership; that is, the existence of such a state of affairs as might mislead creditors.

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The policy of the Bankrupt Act never was so unjust as to take his property, unless it was left by him in such circumstances as that credit might have been obtained upon it."2

And so where it is customary to leave goods in the possession of persons in a certain line of business, possession does not indicate ownership; no one would be deceived, and the statute does not apply.3

3. Estoppel requires that the estoppel-asserter should have been actually misled by the appearance of ownership; but for the operation of the statute that condition is altogether unnecessary. For example, the statute applies although the goods may have come into the possession of the trader the day before his bankruptcy and after every debt has been incurred; and it is not only unnecessary that every ranking creditor should have given credit upon the faith of the appearance of ownership, but it is quite unimportant whether any one creditor did so. 4. Under the law of estoppel, if the owner of goods were at Bank v. Whitney (1886), 11 App. Cas. 436; 56 L. J. Ch. 47.

3 Re Goetz, Jonas & Co. (1898), 1 Q. B. 787; 67 L. J. Q. B. 577; Ex parte Watkins (1873), L. R. 8 Ch. 520; 42 L. J. Bk. 50. Compare the statute which declares for estoppel where a vendor remains in possession of

tinguish between ostensible ownership and ostensible agency, and they contain, moreover, provisions appli cable to persons other than factors. For these reasons the points to be noticed in connection with the acts are grouped together in chapter XXIII. 146 & 47 Vic. (Imp.), ch. 52, § 111. goods "under those circumstances See ante, ch. XI. which create a representation of

2 Per Lord Blackburn in Colonial ownership" (ch. XXIII).