Sale of Goods

Documents of Title.

One feature of American law in which wide changes have been worked in recent years requires mention. The old rule that no man might convey goods which he did not own imposes on buyers either a noticeable risk (of having any goods which have been improperly sold to them recovered by their true owners) or a degree of investigation incompatible with rapid turnover. Especially dangerous and impracticable is this in the case of bankers advancing money on the security of goods in warehouse or in transit ; a banker's margin of profit is too low to make losses readily compensable, and enquiry into title is in gen eral outside his competence. A practice therefore grew up, in the case of goods in warehouse, of accepting the warehouseman's re ceipt for the goods, if fair on its face, as full evidence of title to the goods, and of dealing with the receipt as with the goods themselves. The same practice has developed, even earlier, with reference to bills of lading, i.e., carriers' receipts for goods entrusted to their care.

This mercantile custom has now received full warrant at law, in America, in all 28 States which have adopted the Uniform Sales Act (beginning in 1906) ; also, as to warehouse receipts, in the 48 States which have enacted the Uniform Warehouse Receipts Act (beginning in 1906) ; in more than half the States, as to bills of lading, and in all bills of lading arising out of interstate ship ments, by the adoption of the Uniform Bills of Lading Act by Congress and many State legislatures (beginning in 1909). Sharp distinction is taken under these acts between straight or non negotiable documents, which do not contain a promise to deliver to the order of named person, and which can transfer only such rights as the transferor possesses; and on the other hand, order or negotiable documents, which do carry a promise to deliver to the order of a named person, and which in general carry to a bona fide purchaser (or pledgee) for value all the rights apparent on their face, even though the transferor may have lacked such rights. The English law is to the same effect, and even expressly

extends the same rules to policies of marine insurance drawn in proper form. All the American uniform acts named above are the work of Prof. Samuel Williston, whose credit in this connec tion is as great as that of Chalmers in England, and whose text on sales (see The Law of Sales, 2nd ed., 1924) promises to remain for a generation the authoritative work on the subject.

(K. N. L.) Blackburn, A Treatise on the Effect of Contract of Sale (1845, 3rd ed. by W. R. Norman and L. C. Thomas, 1910) ; J. Bedarride, Des achats et ventes (1862), in Droit Commercial, 17 vol. (1854-64) ; J. P. Benjamin, Sale of Personal Property (1868, 6th ed. by W. C. A. Ker, 192o) ; W. W. Story, A Treatise on the Sale of Personal Property (4th ed. by E. H. Bennett, Boston, Mass., 1871) ; R. Campbell, The Law relating to the Sale of Goods and Commercial Agency (2nd ed. 1891) ; J. B. Moyle, Contract of Sale in the Civil Law (1892) ; Sir M. D. E. S. Chalmers, Sale of Goods Act (1894, Toth ed. 1924) ; R. Brown, Notes and Commentaries on the Sale of Goods Act, 2'893, etc. (1895) ; E. J. Schuster, Principles of German Civil Law (1907) ; S. Williston, Law Governing Sales of Goods at Common Law (2nd ed., 1924) ; A. R. Kennedy, Contracts of Sale on C.I.F. Terms (1924) H. Goitein, C.I.F. Contracts (2nd ed. 1926).