same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same" (43).

As between the seller and the buyer, a delivery of the goods is not essential for the completion of a sale. In an executed sale, the buyer becomes vested with the property in the goods, although the possession is still retained by the seller. The continued possession of the seller, however, is an easy and frequent means of fraud upon later purchasers and upon creditors of the seller. The above provision of the Sales Act is in accordance with the doctrine of the case of Lanfear v. Sumner (44) where the doctrine was regarded as established that the delivery of possession is necessary in a conveyance of personal chattels, as against everyone but the vendor, and, when the same goods are sold to two different persons by conveyances equally valid, he who first lawfully acquires the possession of the goods will hold them against the other. The vendee must not only take possession, but it must be exclusive of the vendor. Concurrent possession will not be sufficient, but there must be a delivery, either actual or constructive, according to the circumstances of the case. If the property is incapable of manual delivery, such as the furniture in a large hotel, heavy articles, or crops in the field, a change of actual possession is not necessary, but some act must be done by the buyer which indicates that there has been a transfer of property in the goods,

(43) Sales Act, sec. 25.

(44) 17 Mass., 110.

some evidence to show that the purchaser asserts his ownership over the goods or acts in a way inconsistent with the property rights of the vendor (45).

In many states there is no absolute rule of law that the seller must give possession to the buyer in order to pass a title good against later innocent purchasers from the seller, but the continued possession of the seller must be explained so as to negative fraud, just as in the case of attaching creditors of the seller. See § 78, following.

§ 78. Creditor's rights against sold goods in seller's possession. "Where a person having sold goods continues in possession of the goods, or of negotiable documents of title to the goods, and such retention of possession is fraudulent in fact or is deemed fraudulent under any rule of law, a creditor or creditors of the seller may treat the sale as void" (46).

Where a sale is made and possession of the goods or of negotiable documents of title to the goods is fraudulently retained, i. e., where the fraud is established, the sale may be avoided by the creditors of the seller. What is necessary to constitute fraud is not a question in the law of sales, and is a question upon which decisions differ in the different states. The continued possession of the seller has been treated by different courts as either conclusive evidence of fraud; or as establishing a presumption which may be defeated by other evidence; or as merely evidence, not sufficient to establish a presumption

(45) McKibbon v. Martin, 64 Pa. St., 352; Morton v. Ragan, 68 Ky., 334; Kellogg Newspaper Co. v. Peterson, 62 Ill., 158.

(46) Sales Act, sec. 26.

but for the jury to consider under all the circumstances of the case, in determining whether or not the retention of possession by the seller has been fraudulent.

§ 79. Sale by buyer in possession under conditional sale. Creditors' rights. As between buyer and seller, as has been said (§ 63, above), the seller may preserve the right of possession or property until the price is paid or secured, in which case the payment or securing of the price is a condition precedent to the passing of the property, even though there has been a delivery to the buyer. The same is generally held, in the absence of statute, as against innocent purchasers from the conditional buyer in possession. Giving the buyer possession under a conditional sale is not such conduct as to estop the seller against purchasers, nor of course against the buyer's creditors. In Harkness v. Russell (47) there was an express condition in each of the notes, upon the sale of two engines and boilers and a saw-mill, for the purchase price of which notes were given, "that the title, ownership or possession of said engine and saw-mill does not pass from the said Russell & Co. (vendors) until this note and interest shall have been paid in full, and the said Russell & Co. or his agent has full power to declare this note due and take possession of said engine and saw-mill when they may deem themselves insecure, even before the maturity of this note." It was held that this was a conditional sale and the rights of the seller were valid against third persons as well as the parties to the transaction.

In a few states the rule is otherwise, without a statute,

(47) 118 U. S., 663.

and in over two-thirds of the remaining states there is a statutory requirement that conditional sales be recorded to give them validity against innocent purchasers, and, in many cases, the buyer's creditors.

§ 80. Documents of title: At common law. Upon the negotiation of a bill of exchange or promissory note, which are commonly called negotiable instruments, the holder for the time being has a right of action in his own name against the promisor, though wholly unknown to him; and, if he is a purchaser for value without notice, his right of action is not subject to defects in the title of a previous holder, or to personal defenses which would be good against a previous holder. See the article on Negotiable Instruments in Volume VIII of this work.

A bill of lading is not negotiable, as the term is used in regard to bills of exchange and promissory notes. If the consignee assigns a bill of lading to a holder for value, the assignment transfers the right to the specific goods, and this to a certain extent wider than that possessed by the assignor; e. g., the assignee has a right to the goods, which overrides the seller's right of stoppage in transitu, and he can claim the goods in spite of the insolvency of the consignee; but the assignment transfers a right to specific goods, a right in rem, while the negotiation of a negotiable instrument transfers a right in personam against the persons liable. The assignee of a bill of lading acquires no rights independently of those of the assignor. A purchaser for value without notice of a stolen bill of lading does not acquire title to the goods against the true owner, and, wherever a bill of lading

is transferred without the authority of the person really entitled, even a bona fide indorsee acquires no rights. The assignment of a bill of lading can give the assignee no better title than is possessed by the assignor, except that he may take the goods freed from the seller's right of stoppage in transitu.

§ 81. Negotiable documents of title under Sales Act. Mercantile custom tends to give a certain negotiable character to documents of title issued by bailees like carriers or warehousemen, by which they promise to deliver goods "to bearer" or "to the order" of persons named. This custom has in the main received little encouragement from the courts, and even statutes enacted to give effect to such customs have frequently been so narrowly construed as to nullify their intentions (48). The Sales Act (sections 27 to 40) codifies such legislative efforts of this character as have been already made, and extends them so as enact into a harmonious whole the substance of mercantile understanding and usage respecting such documents. The gist of these provisions is that documents making goods deliverable "to bearer" or "to order" are made negotiable and may be transferred by delivery or by indorsement, according to their tenor, like negotiable instruments for the payment of money; except, that they may be thus negotiated only by their real owner, or by some person entrusted with their possession by the owner. A thief or finder thus can pass no title to such documents.

(48) Shaw v. Railroad Co., 101 U. S., 557.