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Example 26. A sells books to B, delivering B the books under a contract whereby A is to have title until the last installment is paid. The risk is on B. He must pay although the goods are destroyed before the last installment. 68
(2) Cases in which title is reserved during transit for purposes of security where except for such reservation title would have passed.
The law is not as clear as desirable on this point. Supporting this view see Farmers & Mechanics Bank v. Logan; 70 and against it Willman Mercantile Co. v. Fussy.71 The Sales Act adopts the former view.
69. Tufts v. Griffin, 107 N. C. 47.
TITLE AND THIRD PERSONS.
Sec. 63. ATTEMPTED SALE BY ONE NOT OWNER: IN GENERAL. If goods are sold by one not the owner thereof, no title is acquired by the purchaser unless the real owner is estopped to assert his own title.
One cannot sell goods that he does not own unless he is aided therein by some act of the real owner which estops the owner to assert his ownership or deny the seller's authority or title. It is true that one who acquires negotiable paper in due course may often take a better title than his transferor had. So one who gives value for money may acquire good title thereto even from a thief but goods are not subject to these considerations. Except for the estoppel of the owner, the buyer can take no better title than his vendor had, and the true owner may retake the goods as his own.
In which case the purchaser must be content with the warranties of title implied in the sale. For breach of these he may have his damages.
A buyer who has a title, although voidable by the seller, may give a good title to an innocent purchaser so long as such title has not been voided.
A. When True Owner Not Estopped to Assert Title.
Sec. 64. IN GENERAL. Against third persons an owner of goods by merely investing another with their possession
for a lawful purpose is not thereby estopped to assert his title against any one claiming under the possessor's title.
The owner loses no rights to assert his title by merely clothing another with possession. There must be some additional element. It is true that by reason of such possession, the possessor may be enabled to deceive his creditors or purchasers as to his ownership. He may seem to have more assets than he really has. Yet the exigencies and conveniences of commercial life override this consideration and it is well settled everywhere that the true owner may still assert his rights. As illustrating this principle the following particular instances are cited.
Sec. 65. IN CASE OF CONSIGNMENT FOR SALE. A mere consignment of goods to be sold by consignee for the benefit of the consignor gives the creditors of such consignee no rights against such goods.
It is a usual practice among merchants for a wholesaler to consign goods to a retailer, that is, to send the goods to the consignee as agent to sell them. This must be strictly distinguished from a sale on credit. In a sale on credit the buyer owns the goods and the seller has parted with his title in return for the buyer's promise. One who purchases from a consignee gets of course a good title, for that is the purpose of and the authority conferred by the consignment, but a creditor gets no rights even though he may have allowed the credit in reliance upon the apparent value of the assets conferred by the possession of such consigned goods. Therefore, such goods cannot be seized for the debts of the consignee, and may be reclaimed from the trustee in bank
72. See Example 4 in Bailments and Carriers; supra.
Sec. 66. IN CASE OF BAILMENT OTHER THAN FOR SALE. Conferring mere possession upon an agent or bailee for purposes other than those of sale gives neither creditors of such consignee nor purchasers from him any rights against such goods.
Whether an agent is entirely within one's employ upon salary or commission or is specially employed for a particular purpose
be necessary or desirable to supply him with goods whereby he may accomplish his agency or perform the terms of the contract. In such a case the owner may assert his title against any one claiming under or against such agent or bailee. In such a case it is to be remembered, there must be a true case of bailment. The possessor must be obliged to return the same goods in their present or an altered form, for otherwise the possessor as purchaser has a title he may convey.
Even though the party with whom possession was placed is a dealer in such goods, still if no authority were given him to sell he could give no valid title.
Example 27. A jeweler has a watch left with him for repair. He sells it to B, an innocent customer who pays value for it. M, the owner, can take it from B. B must rely on his rights against A.73
B. When True Owner Estopped to Assert Title Against
Sec. 67. IN GENERAL. Where other than by mere possession the owner authorizes or permits another to deal with the goods as his own, he may be estopped to assert his own
73. Biggs v. Evans, (1894) 1 Q. B. 88; Fawcett v. Osborne, 32 Ill. 411.
ership as to one who has dealt with the possessor as the
Having now considered the cases in which the true cwner may assert his title against creditors and purchasers of another, let us consider the cases in which a true owner will not be permitted to set up his title, as against those who have dealt with another as the owner of the property. There are two well defined classes of
Sec. 68. ALLOWING ANOTHER TO ASSERT THAT HE IS OWNER. Where the true owner of goods allows another to make statements and representations of ownership the true owner cannot assert title against third persons acting on the faith of such representations and statements.
In this case there might or might not be actual fraud, But in either event, the true owner could not assert his title. It would have to be apparent of course that the true owner permitted the representations-stood by and did not deny them or aided the agent in making them.
Example 28. T was in possession of a wagon owned by O, on which T had been permitted to paint his name. T sold to C. O claims the wagon and sues C for its recovery. Held, O, although the true owner, is estopped to assert his ownership against an innocent purchaser. Between the two the loss should fall on O who made the loss possible.74
Sec. 69. CLOTHING ANOTHER WITH DOCUMENTARY INDICIA OF TITLE. When the true owner of goods allows another to hold documents of title made out 74. O'Connor v. Clarke, 170 Pa. Rep. 318.