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amount the sub-buyer actually paid-provided, of course, it was not so little as to derogate his good faith. But if the third person is not a buyer, but a pledgee only, then his legal interest is to the amount of his pledge only and the seller's right of stoppage is lost only to that extent. The right of stoppage still exists against whatever right in the goods the original buyer may still have.55
There is some question, however, whether the seller can stop the goods and thereafter pay the buyer's pledgee the amount of his interest, or must pay the pledgee before he can stop the goods. In Mo. Pac. R. R. Co. v. Heidenheimer,56 the carrier was sued by the buyer's pledgee for refusal to deliver the goods. The defense was, that, the buyer having become insolvent, the seller had ordered delivery stopped. The court intimated that the seller would be protected as to any surplus over the amount of the pledge, but decided that, "in any event, it must, we think, be conceded that if the transfer by way of pledge or mortgage, or as collateral security for a loan, does not absolutely defeat the right of 'stoppage in transitu,' the seller can not exert that right until he has discharged the debt secured by the transfer, as his right is subject to that of the mortgage or pledgee." Consequently, the carrier was bound to deliver to the pledgee so long as his right was outstanding. The authority on the matter is too scant for it to be determined definitely whether satisfaction of the pledgee's interest is a condition precedent to the right to stop or not.
55-Chandler v. Fulton, 10 Tex. 2, 60 Am. Dec. 188; Spalding v. Ruding, 6 Beavan 376, "As against Thomas (the buyer), I think that the plaintiffs had a right to stop the goods in transitu; and, although the legal right to the goods was transferred (to Thomas' pledgee) with the bill of lading, yet
I think that, in equity, the transfer took effect only to the extent of the consideration paid by the transferee, leaving in the plaintiffs an equitable interest in the surplus value." Berndtson V. Strang, L. R. 4 Equity 481.
56-82 Tex. 195, 27 Am. St. 861.
5. PURCHASERS FROM ONE WHO HAS POSSESSION AND A VOIDABLE TITLE
When both title and possession are in the buyer, the seller, as we have seen, has no rights at all against the goods except the right to revest title in himself if the sale was induced by the buyer's fraud. As, with this exception, the goods are free from any rights of the seller while title is in the buyer, it follows that a third person, purchasing from the buyer, or otherwise standing in his shoes, will hold the goods equally free from any claims of the seller.
But furthermore, a third person who has purchased the goods from the buyer, in good faith, acquires a title which is free even from the seller's right to rescind the sale because of fraud. That is to say, the original seller's right to revest title in himself because of the buyer's fraud is lost if not exercised before his buyer resells to a third person acting in good faith. So, if A sells goods to B and gives B possession, if the transaction was induced by fraud on the part of B, A may revest title in himself and retake the goods from B. But if before A does So, B passes on the title to C, who takes it for value and in good faith, A can not retake the goods from C. This rule is undoubtedly based on the same principle that permits a buyer to cut off his seller's right of stoppage in transitu by sale of the bill of lading. That is to say, although the buyer has title, it is subject to the defrauded seller's right to retake it; but when the buyer has passed his title to a sub-purchaser, the latter has not only title, but also an equitable right in the goods, and the two together are superior to the seller's right.57*
57-Truxton v. Fait & Slagle Co., 1 Penna. (Del.) 483, 73 Am. St. Rep. 81, "Until the contract is rescinded or avoided, the title or property in the goods is in the
buyer, and he may sell or dispose of them to a bona fide purchaser for value, and thus vest in him a good, indefeasable, and irrevocable title to the property.
*See Uniform Sales Act, Section 24.
Purchaser Not in Good Faith.-A sub-purchaser who has not taken the goods in good faith, or for value, although he may get his seller's title, does not couple an equitable right in the goods with it, and is, therefore, in no better position to resist the original seller's right to the goods than was the original buyer.58
A consignee of goods who in good faith makes advances upon them stands precisely in the same position as a purchaser for value, as against the original vendor, and the same principles of law, in this regard apply to this case." Schloss v. Estey, 114 Mich. 429; Pelham v. Chattahoochee Grocery Co., 146 Ala. 216, 119 Am. St. Rep. 19, stating the rules as to the burden of proof; Lee v. Wilkins, 79 Mo. Ap. 159, mortgagee of fraudulent buyer protected; Levi V. Bray, 12 Ind. Ap. 9, "It is well settled that even though a sale of property is induced by fraud the title vests in the vendee, subject to the right of the vendor, upon discovering the fraud to rescind. Until the vendor elects to rescind, the title to the property remains in the vendee, and a sale by him for value to a third person who is ignorant of the fraud, vests a good title in the latter, even against the original vendor." Wilk v. Key, Simmons & Co., 117 Ala. 285, as to sub-buyers who take in payment of existing debt; Donaldson v. Byrd & Co., 16 Ky. L. R. 448; Hochberger v. Baum, 85 N. Y. S. 385; Tetrault v. O'Connor, 8 N. D. 15; National Bk. v. Balt. & O. R. R. Co., 99 Md. 661, 105 Am. St. Rep. 321; Levi v. Booth, 56 Md. 305, dictum; B. & O. Ry. Co. v. Good, 82 O. S. 278.
Some few cases indicate that where the first sale has been induced by fraud it is absolutely void and vests no title in the buyer, but that, apparently arbitrarily, a sub-purchaser from him will be treated as having title. Catlin v. Warren, 16 Ill. Ap. 418, but cf. Reid, Murdoch & Co. v. Sheffy, 99 Ill. Ap. 189; Root v. French, 13 Wend. (N. Y.) 570.
A sale, or assignment, of a right against a person, as distinct from rights in respect to a particular thing, does not vest the buyer, if guilty of fraud, with power to pass his right untainted with the fraud to an innocent sub-buyer. A contrary rule is found in some jurisdictions. See Williston on Contracts, § 438.
58-Reid, Murdoch & Co. v. Sheffy, 99 Ill. Ap. 189; Mashburn & Co. v. Dannenburg Co., 117 Ga. 567, pledgee as security for antecedent debt not protected because "the debt of the mortgage creditor was not contracted on the faith of the property in possession of the debtor." Schweitzer v. Tracy, 76 Ill. 345, attaching creditor; Oswego Starch Factory v. Lendrum, 57 Iowa 573; Butters v. Haughwont, 42 Ill. 18, taken in payment of existing debt, protected; Load v. Green, 15 M. & W. 216, assignee in bankruptcy not protected.
What Constitutes a Voidable Title.-On the other hand, as we have already seen, if the first buyer has no title himself, but only possession, a buyer from him, no matter how innocent, will get no title. So, where possession is given to one claiming to be agent of another, if it turns out that the "agency" was a fiction and the pretended agent had no authority to act for his alleged principal, but was getting possession solely for himself, there is no title in him. The contract of sale was not made with him individually, but with his principal, through him as agent. If it turns out that there was in fact no principal for him to represent, then there was no party on his side of the contract and, in consequence, no contract. There being no contract, no title could have passed out of the "seller.' It could not have passed to the fictitious principal; there was no intention to pass it to the alleged agent himself; it would still be in the seller. The alleged agent, having no title, although he be in possession, can give no title to a purchaser.59
Some difficulty in applying this rule arises in cases where the seller does intend to pass title to the physical person to whom he gives possession, but believes him to be another, metaphysical, person of a certain name and credit. Thus, if B represents himself to A as being X and having X's credit, and A deals with B and puts him in possession, the question arises, did B get even a voidable title.
In such a case there are three possibilities as to A's real intent. He may have intended to pass title to the person represented by the visible characteristics before him. Or, he may have intended to deal with a person repre
59-Smith Premier Typewriter Co. v. Stidger, 18 Colo. Ap. 261, citing Hamet v. Letcher, 37 O. S. 356 and Parker v. Dinsmore, 72 Pa. St. 427; Rogers v. Dutton, 182
Mass. 187, even though the alleged principal was himself the subpurchaser and the seller sent the goods direct to him.
sented by the nominal and credit characteristics of X Or he may have intended to deal with a person represented by both the visible characteristics before him and the name and character of X. In the latter case there would be no contract, because there was no such person and, therefore, there was no "other side" to a contract. This seems the most probable intent on A's part, but the courts ignore it. They assume that he intended to deal with one or the other of the existing personalities. If A intended to deal with that represented by the name and credit of X, then, again, there would be no contract. The person, X, existed, but he did not enter the contract and therefore, as in the other case, the contract would have but one side—and would not be truly a contract. But if A intended to deal with the person represented by the visible characteristics, then there would be a contract, even though entered into through mistake, because that same person intended to contract with A.
When the conflict of possibilities is between the person of nominal characteristics and the person of visible characteristics-the courts ignore the third possibility-intent to deal with the visible one is assumed.60 But where the
60-Edmunds v. Merchants Dispatch Co., 135 Mass. 283, "We think it clear, upon principle and authority, that there was a sale, and the property in the goods passed to the purchaser. * The minds of the parties met
*. The fact that the seller was induced to sell by fraud of the buyer made the sale voidable, but not void. He could not have supposed that he was selling to any other person; his intention was to sell to the person present, and identified by sight and hearing; it does not defeat the sale because the buyer assumed a false name This case was cited and followed in Phillips v. Brooks,
 2 K. B. 243; Martin v. Green, 117 Me. 138; Phelps v. McQuade, 220 N. Y. 232 L. R. A. 1918 B 973. The rule appears to be in dispute in regard to orders for the payment of money. That is, where a payee is named and the maker of the instrument gives it to one whom he supposes to be so named but is in fact not that nominal person, some courts hold that the drawee must pay to the nominal person intended by the drawer and is not protected in paying to the mere physical personality whom the drawer thought was the bearer of the name.
Dodge v. National Exch. Bk., 20