Editorial Committee of the Cambridge Law Journal

Sale of Goods. Seller's Lien. Resale Author(s): T. C. Thomas Reviewed work(s): Source: The Cambridge Law Journal, Vol. 18, No. 1 (Apr., 1960), pp. 34-36 Published by: Cambridge University Press on behalf of Editorial Committee of the Cambridge Law Journal Stable URL: http://www.jstor.org/stable/4504619 . Accessed: 28/04/2012 11:03
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such a contract vests the entire beneficialinterest in the property sold in the purchaserby way of constructivetrust, any instrument employed to complete the transaction is stampable as a " conveyaIlce or transfer on sale," even if it incidentalIywinds up the former trust. Lord Denning held more widely that every conveyance or transfer by which an agreementfor sale is implementedis liable to ad valoremduty; but he did not think that section 53 (2) obviates the need for writing under section 53 (1) (c). Lord RadcHffe,dissenting, agreed with Upjohn J. that the oral contract validly created a constructive trust under section 53 (2), whereby P.'s eqmtable interest passed to 0. before the transfer was ever executed. Lord Cohen, also dissewlting, decided that P.'s eqliitable interest remainedin him as a constructivetrustee for 0. and could only be transferredin writing under section 53 (1) (c) Although P. had probably not conveyed that interest to 0. by a document capable of attracting duty, once 0. had vested her own shares in P.'s nominees P. couIdnot dispute her absolute title to the former settled shares.

Thusthe thirdof the methods assignment of described abovenow reqliires nvriting (Grey's case)andsettlors mustfindothermethods of avoidingstenp duty by oral transactions they can. But if Oughtred'scase leavessomeinteresting problems unsolved. Must a contrsctto assign (method(4)) be in writillgto create a constructivetrust, despitesection53 (2)l Does an equitable owner whe declares himselfa trusteefor another(method(2)) disappear fromthe scene, as UpjohnJe thinks,whilst the old trusteeshold for the new beneficiary instead; or does he himself retain his intereston a suStrustP Thelatterview, with respect,seemsmore logicaland practica]
J. W. A. THORNELY. SALE GOOD8-SELLER'S RE8AT OF LIENF. TZE right of an unpaid seller of goods to a lien olrer them until paid is liable to be defeated in any one of five ways. IJnder section 43 of the Sale of GoodsAct, 1893, this occursif (i) the goods are delivered to a carrierfor transmissionto the buyer, or (ii) the buyer obtains possession, or (iii) the seller wailreshis rights; and there are two further possibilitiesunder section 47 where, though the seller's rights are not in general defeated by a xnere suSsale by the buyer, they are defeated (iv) if the seller has assented to such suSsales and (v) if the seller transfers a document of title to the buyer and he transfers "the document" by way of sale to a person who takes in good faith and for value. D. F. Mount,

CL.J* Ltd. v. Jay is a valuable

Case and

Comment

S5

537, 8? Jay (Provisions) Co., Ltd. [1959] 8 W.L.R. illustration of the limits of the fourth and fifth of these

possibilities. The defendants, who were the unpaid sellers, were the owners of 500 cartons of tinned peaches in store with a firm of wharfingers and they contracted to sell to the buyer 150 of these cartons and The contracts a further 100 cartons. then, by a second contract, as to of a falling market; were negotiated against the background the 150 cartons, the sellers agreed to let the buyer have these at upon the terms that the profit on resale should equally between them; and as to the other 100 cartons the buyer made it quite plain that he was going to pay for them out of moneys that he would receive on a resale. So, in order to enable the buyer to obtain delivery of the goods, the sellers sent him two delivery orders covering the two consignments, and these price with instructions to hold to his order. wharfingers resold both consignments to the plaintiffs Meanwhile, (the having the buyer made out a fresh delivery order in their sub-buyers), favour covering all 250 cartons and sent it to them, and they in turn sent it to the wharfingers The with instructions to hold for them. sub-buyers paid the buyer but he failed to pay the sellers, who instructed to hold the goods to their the wharfingers thereupon Faced with the competing order. claims of the unpaid sellers and the sub-buyers, took out an interpleader summons the wharfingers their was whether the unpaid sellers had lost the crucial question lien. This had not occurred under any one of the first three methods mentioned above, but it was argued that either or both of the ways envisaged by section 47 had been satisfied. Had said to the sub-sale? the sellers "assented" Yes, v. Salmon J. who adopted the words of Pickford J. in Mordaunt British Oil $ Cake Mills, Ltd. [1910] 2 K.B. 502, 507, where he said that it must be " such an assent as in the circumstances shows that the seller intends On the present facts the resales and were and he sent to the a reduced be shared

to renounce his rights against the goods." it was clear that the sellers had assented to content with their remedy against the buyer personally. Though this was sufficient to dispose of the case, two further matters First is the argued by counsel deserve noting. on behalf of the sub-buyers even if the sellers had that, argument not assented to the sub-sales, yet there had been a transfer of a of title by the sellers to the buyer and a sub-transfer document to the sub-buyers which, under section 47, would operate to destroy To this the judge answered that section 47 required that the lien. " that he received from the buyer should transfer " the document his sellers, whereas here the buyer sent that document to the

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whatfingers originated freshdeliveryorderm favourof the and a suSbuyers. The stricttermsof section47 hadnot, therefore, been complied with andthe sellers wouldnot, on this ground alone,have lost theirlien. Thesecond pointraised the suWbuyers that sectzon (2) by was 25 of the Act provides a sixth way in whichthe lien may be lost. yet Now the primaryrole of this subsection to provideone i the is important exceptions nemo dat quodnon habet. Its role is to to
enable a person to pass a better title than he has himself if, having agreedto buy goods, he obtains possession of them or the documents of title to them arld then resells the goods delivering " the goods or documents of title " to a sub-buyerwho takes for value and without 1loticeof any lien of the origlnal seller. There is, indeed, some authorityfor the new that the operationof section 25 (2) may also defeat the seller's lien: see per Collins L.J. in Cahnv. Pockett'sBristolChannel SteamPacketCo., Ltd. [1899} 1 Q.B. 643 at 664; for the openiIlgwords of section 47, " Subject to the provisions of this Act," indicate that the grounds in section 47 are not the only ones on which the seIler's lien may be defeated. Salmon J. therefore proceeds on the basis that the provisions of section 25 (2) are such other provisions and, comparing them with those sf section 47, says that in his view they are ' less rigorous" and that, in particular, section 25 (2) does not require that the buyer should transfer the identical document that he himself received, and that thereforethe trallsferbefore him would have extingl}ished the lien. The point is a novel olle. Bentamin Sale (8th ed*, p 865) says " Under both sectio}s the on btlyer must transfer the document to a thwd person," but this statement pts equally well iIa either direction. It might be thought, however, that, since both sections are here being used for the same purpose, they ought to be given the same strict or the same benevolent interpretation. T. C. TEOMA8. SALE LAND VENDORS OF RE8CI88ION CLAUSE-MORTGAGE8 TREcase of Bainesv. Tweddle[1959] Ch. 670 is concernedwith the effect Ox1 contractfor the sale of land of the followingfamiliar a condition: " If a purchasertakes or makes any objectionor requisition as to title, conveyanceor otherwlsewhichthe vendor is unable or, on the groundof unreasonable expense, unwillingto remove or comply with, and does not withdrawthe same . . * the rendor may rescind. . * . "