Particular Types of Property.-There is a tendency to change this strict rule, and to modify its application to certain types of property. Money, for instance, passes from a mere possessor to purchaser in good faith quite free from any rights of the original owner. This is possibly on the ground that money has no ear-marks of identification; more probably for reasons of economic policy. So also, those instruments which were negotiable by the law-merchant and its supplementary statutes now pass from one person to another, free from the rights of an unconsenting original owner. Bonds, in the form of an unconditional promise to pay to bearer, or to the order of a named person, are generally held to pass free from equities under these rules.19

Many courts apply this exception, more or less inconsistently, to other property in the form of written obligations. Thus the lawful possession of stock certificates has been held to give the possessor power to vest a title in a buyer without notice.20 So also power to pass title has been extended to one intrusted with mere possession of other instruments.21

But even the exception in regard to stock-certificates, warrants, and other documents not covered by the Law Merchant, does not apply to persons in possession without the real owner's consent. They must have been "entrusted" with possession by the owner. Thus the manager of a corporation who takes stock-certificates from its safe and sells them without its consent, does not vest

19-Pratt V. Higginson, 230 Mass. 256,

20-Penna. R. R. Co.'s Appeal, 86 Pa. 80, by implication and dictum; Russell v. Am. Bell Tel. Co., 180 Mass. 467, in view of custom; Burton's Appeal, 93 Pa. 214; McNeil v. Tenth National Bank, 46 N. Y. 325, but only because indorsed in blank with a power to

sell; Walker v. Detroit Transit Ry. Co., 47 Mich. 338.

21-Scollans V. Rollins, 179 Mass. 346, "non-negotiable" bond; Delfosse V. Metropolitan Nat'l Bank, 98 Ill. Ap. 123, city warrant for payment; Brown v. Perera, 176 N. Y. S. 215, paper money of foreign countries.

a title in the buyer, because he was not entrusted with possession by the company. 22

Bills of Lading.-As to whether one in lawful possession of a bill of lading or a warehouse receipt, properly indorsed, can give a bona fide purchaser the title which he himself has not, there is much confusion. Writers generally indicate that mere possession of an indorsed bill of lading is such evidence of title as will estop the one who has created that appearance from setting up his own title. The actual authority, however, is scant and uncertain. In National Bank v. Baltimore & Ohio R. R. Co.,23 for instance, A sold lumber to B and put him in possession, but with a reservation of title in A till payment. B then delivered the lumber to a carrier and got a bill of lading. This bill he sold to C, who bought in good faith. The court held that C acquired title even against A. Superficially this case indicates that the possessor of a bill of lading can pass a title although he himself has none. But, in fact, Maryland is one of the few jurisdictions in which one in possession of goods themselves, under a conditional sale contract, can vest his buyer with title. So the case means nothing as to the effect of possession of a bill of lading compared with possession of the goods themselves. Again, in Munroe v. Phila. Warehouse Co.,24 the purchaser of a bill of lading from one in mere lawful possession of it was protected. But it is not improbable that a state statute declaring bills of lading to be "negotiable" had

22-Knox v. Eden Music Co., 148 N. Y. 441; Scollans v. Rollins, 179 Mass. 346, dissenting opinion; Belknap v. Nat'l Bk., 100 Mass. 376, by analogy.

This has been changed by statute in some states, so that the sale

of a properly indorsed certificate of stock by any one in possession will vest title in a bona fide purchaser.

23-99 Md. 61, 105 Am. St. 321. 24-75 Fed. 545, aff'd., 79 Fed. 999.

something to do with the fact that it went "free from equities. ''25

On the other hand, there is some precise authority to the effect that the buyer of a bill of lading in possession of the seller is no better off than he would have been had the seller merely possessed the goods themselves.26*

Furthermore, whatever may be the rule in cases where the possessor of the bill of lading has been entrusted therewith by the owner, the rule is clear that possession of a bill of lading not entrusted to the possessor by the owner does not enable the possessor to invest its buyer with any rights superior to those of the real owner. This is true even though the owner had entrusted posses

25-Cf. Miller v. Browarski, 130 Pa. 372; In Commercial Bank v. Armsby Co., 120 Ga. 74, sometimes cited for the proposition that possession of the bill of lading is sufficient evidence of title to estop the one who has entrusted possession to the defrauder, there are extraneous circumstances indicating implied authority to sell which were probably the real basis of the decision. In Pollard v. Reardon, 65 Fed. 848, the rule as to retention of possession by a seller undoubtedly had some effect. Willinghams Sons v. McGuffin, 18 Ga. Ap. 658.

26-Stollenwerck V. Thacher, 115 Mass. 224, "A bill of lading, even when in terms running to order or assigns, is not negotiable, like a bill of exchange, but a symbol or representative of the

goods themselves; and the rights arising out of the transfer of a bill of lading correspond, not to those arising out of the indorsement of a negotiable promise for the payment of money, but to those arising out of a delivery of the property itself under similar circumstances. *** But so long

as the bill of lading remains in the hands of the original party, or of an agent intrusted with it for a special purpose, and not authorized to sell or pledge the goods, a person who gets possession of it without the authority of the owner, although with the assent of the agent, acquires no title as against the principal." Baker Co. v. Brown, 214 Mass. 196; Burton v. Curyea, 40 Ill. 320, 89 Am. Dec. 350; Commercial Bank v. Canal Bank, 239 U. S. 520.

*See Uniform Sales Act, Section 31, ff. See also the related provisions of the Uniform Bills of Lading Act.

Various state statutes have declared bills of lading to be "negotiable". As to their meaning, see Shaw v. Railroad, 101 U. S. 557; Tiedman v. Knox, 53 Md. 612; Hardie v. Railroad, 118 La. 254.

sion of the goods to the person who thereby was enabled to get a bill of lading for them.27

3. PURCHASERS FROM SELLER REMAINING IN POSSESSION AFTER PASSING TITLE

There is a type of case in which one who has possession only, without either title or authority to sell, can invest another, who takes from him in good faith, with rights superior to those of the true owner. This is the case where a buyer has allowed his seller to remain in possession after title has passed and an innocent third person is misled thereby.*

Fraud as a Reason.-These cases, considered as a matter of result rather than of theory, are divided into two groups. The primary decision on this point is Twyne's case28, decided in 1601. A statute of 13 Elizabeth provided, in effect, that all grants intended to hinder or defraud creditors should be void, in so far as they accomplished that result. In Twyne's Case, the seller had continued in possession of the goods and the court considered this, along with other matters, as evidence of intent to defraud. The sale was, therefore, set aside.

The first group of cases is in harmony with Twyne's Case, although they may go somewhat further. They hold that retention of possession by the seller is prima

27-Decan v. Shipper, 35 Pa. 239, 78 Am. Dec. 334; Hart v. Boston & M. R. R. Co., 72 N. H. 410, property itself had been entrusted to defrauder; Merchants Nat'l Bk. v. Bates, 148 Ala. 279, property itself had been stolen; Raleigh & G. R. R. Co. v. Lowe, 101 Ga. 320, bill of lading had been stolen by the seller; Tison & Gordon v. Howard,

57 Ga. 410; Commercial Bk. v. Hurt, 99 Ala. 130, 12 So. 568; Seal, Lawson & Co. v. Zell & Sons, 63 Md. 356; Mechanics & Traders Bk. v. Farmers etc. Bk., 60 N. Y. 40; The Idaho, 93 U. S. 575; Saltus v. Everett, 20 Wend. (N. Y.) 267, 32 Am. Dec. 541.

See Uniform Sales Act, Section 25.

28-3 Coke 80.

facie evidence of fraud in the first transaction and, because of this fraud, it will be set aside in favor of subsequent bona fide buyers or attaching creditors. This prima facie inference of fraud is rebuttable, however, by proof that there was in fact no fraud intended.

According to these decisions, "no transaction shall be considered fraudulent, which is not so in point of fact.

** Possession remaining with the vendor, after an absolute sale of personal property, is a badge of fraud, devolves on the party the necessity of showing that the transaction is honest, and that a sufficient consideration has been paid for it. By so doing, the apparent incongruity of the ownership not being with the possession is explained; and certainly the plaintiff has no claim on the principles of justice, to have his execution satisfied out of property which does not belong to the defendant in execution" 29

In the case just quoted from, the court indicates that mere payment of proper consideration and good faith in the transaction generally, is sufficient to rebut the presumption of fraud arising from the retention of possession.30

29-Blocker v. Burness, 2 Ala. 354. The court eliminates a correlated but entirely different problem which has caused confusion in other cases by saying, "Should the property be suffered to remain so long, that the possessor acquired a delusive credit from the apparent ownership after such sale, another question depending on different principles would arise, which it is not necessary to determine at this time."

30-That retention of possession creates only a rebuttable presumption of fraud, see: Hobbs v. Bibb, 2 Stew. (Ala.) 54, rejecting the "fraud per se" rule of Edwards v. Harben, 2 Term R. 587, and criti

cizing its adoption by the Supreme Court, in Hamilton v. Russell, 1 Cranch 309, and discussing the original authorities generally. Mayer v. Clark, 40 Ala. 259; Hight v. Harris, 56 Ark. 98, delivery of title and delivery of possession hopelessly confused in verbiage, but although there was in fact no delivery of possession and no sound reason for its retention yet the first buyer was protected; Burke v. Sharp, 88 Ark. 433; Fleming v. Townsend, 6 Ga. 103, "the question of fraud or not is submitted to the jury;" but cf. Beers v. Dawson, 8 Ga. 556; Jones v. Newberry, 16 Ga. Ap. 424, 85 S. E. 617; Bryant v. Kelton, 1 Tex. 415,