Page:Harvard Law Review Volume 8.djvu/439

From Wikisource
Jump to navigation Jump to search
This page needs to be proofread.
423
HARVARD LAW REVIEW.
423

NOTES. 423 Shipman v. Bank of N'. V., 126 N. Y. 318 ; Phillips v. Mercantile Nat. Bank, 140 N. Y. 556 ; Armstrong v. Nat. Ba/ik, 46 Ohio St. 512 ; Lane v. Krekle, 22 Iowa, 399; Kohn v. Watkins, 26 Kas. 691; Bhillips v. m I'/iurn, L. R. i C. 1*. 463. Implied Power of Sale. — A case put by Lord Justice Lindley in delivering his opinion in Henderson v. Williams (11 I'imes Law Rep. 148), decided by the Court of Appeal last December, presents a most interesting question in the law of sale. Suppose R, a rascal, by fraudu- lently representing that he is the agent of X, negotiates a sale with A, who believes he is selling to X. A then notifies the warehouseman, who has possession of the goods, to hold them subject to the order of R, and a bona fide purchaser, relying on the warehouseman's statement that he so holds them, pays cash to R for the goods. Has title passed from the original owner to the bona fide purchaser? Lord Justice Lindley was of opinion that it had. On the facts as they appear in the report, namely, that A thought he was selling to X through R as agent, it is clear that no title would have passed if A himself had delivered possession to R. Cundy v. Lindsay, 3 A. C. 459 ; Rodliff V. Dallinger, 141 Mass. i ; Collins v. Ralli, 20 Hun, 246 ; s. c. 85 N. Y. 637. It would have been a case of larceny by trick, and not of obtaining goods by false pretences. Does the fact that A author- ized the warehouseman to deliver possession for him make any differ- ence? This, it would seem, must depend on whether A's intention, as manifested by his overt act in so authorizing the warehouseman, was to give R not only the right of possession but also a general power of sale. It may, perhaps, be safely admitted that he did intend to give R power to dispose of the goods to such person as X, the supposed principal, should direct. But this doubtless would not be enough to enable R to pass title to a bona fide purchaser. One must go a step farther and say that he intended to give R a general power of sale. If this is conceded it is clear that the bona fide purchaser from R would get title, for R would then in effect be a trustee for X. Can this last step safely be taken? For aught that the purchaser knows, R may be agent for a principal who allows him to dispose of the goods only to such person as he, the prin- cipal, shall approve of. This is a perfectly possible transaction, and per- fectly consistent with R's holding a delivery order on the warehouseman. Why, then, has the purchaser the right to suppose that it is not the real state of affairs? Why has he more right to suppose that R has a gen- eral power of sale, and to rely on such supposition, than one has to suppose that a person in possession has title and can pass it ? The warehouseman is of course protected in delivering to the holder's order, because he was given authority to do so, but this seems very different from saying that, judged by his overt act, the owner must have intended to give R a gen- eral power of sale. Lord Lindley's view, it may be remarked, is not the less interesting in that it is contra to the result reached in the well known case oi Kingsford V . Merry, i H. & N. 503. The actual suit before the Court of Appeal was against the warehouse- man, and as he had attorned to the bona fide purchaser, as well as repre- sented that he held to the order of the rascal, the court decided that he was estopped by reason of such attornment, which is undoubtedly law. Stonard v. Duiikin, 2 Camp. 344 ; Knights v. Wiffen, L. R. 5 Q. B. 660. It must be admitted that this furnishes a strong practical argument in 56