Page:Harvard Law Review Volume 10.djvu/83

NOTES. S7 What a Bailor can Sell. — In a short discussion of the nature of a bailor's interest, in the sixth volumre of the Review, p. 43, it was main- tained that Blackstone was right in saying (2 Com. 453) that "the bailor hath nothing left in him but the right to a chose in action." Consistently with this view, the vendee of a bailor should not be permitted to sue the bailee in his own name. This was formerly the law. As late as 1844 it was urged at Nisi Prius that a sale by a bailor was " merely an assign- ment of a right of action," and Parke, B., being of that opinion, directed a verdict for the defendant in an action by the bailor's vendee. The Court of Exchequer, however, in disregard of the precedents, held this ruling of the learned judge to be a misdirection ; and this innovation in procedure must now be regarded as established. 3 Harvard Law Review, 342, n. i. But Blackstone's statement should still control in settling the sub- stantive rights of the parties, and is believed to be the only ground upon which certain decisions can be supported. For example, in Saxeby v. Wynne, 3 Stark. Law of Evidence (3d ed.), 1159, A deposited goods with B and then sold them to C, and afterwards directed B to deliver them to D. B, it was decided, was not guilty of a conversion in deliver- ing them to D. If C was simply the assignee of A's chose in action against B, the decision was clearly right, for A could not have recovered against B. If, on the other hand, C acquired a full title as owner of the goods, the decision must be wrong. Jones v. Hodgkins, 61 Me. 480, is a similar case in favor of the bailee. It is familiar learning that one who acquires the possession of goods as a fraudulent vendee holds the title so acquired as a constructive trustee for the vendor, and that this fraudulent vendee may, like any tnistee, pass the title to a bona fide purchaser free from the equitable encumbrance. Suppose, however, that the defrauded vendor simply sells without delivering possession. The fraudulent vendee gets not the res, but a conditional right in rem, the right to have the res on paying the purchase money. His legal right is the same as if he had received possession at the time of the sale, and had immediately given back the possession to the vendor as a security for the purchase money. In other words, he is substantially a pledgor, and has like any bailor only a legal chose in action. And this legal chose in action, which he obtained by fraud, he holds as a constructive trustee for the defrauded vendor. If, there- fore, he purports to sell the goods to an innocent purchaser, the latter will acquire only the assignment of this legal chose in action subject to the equitable encumbrance in favor of the defrauded vendor. The bona fide purchaser, therefore, and not the original vendor, will be the victim of the rascality of the fraudulent vendee. This was the result of the de- cisions in Globe Co. v. Minneapolis Co., 44 Minn. 153, and Dean v. Yates, 22 Ohio St. 388. If the bailee should deliver the goods to the bailor in ignorance of a prior sale by the latter to A, no one, it is believed, would regard the bailee as liable to A for a conversion. The bailee's position would be analo- gous to that of a debtor who had paid his creditor in ignorance of a prior assignment of the debt to A. In each case the right of action is extin- guished by fulfilment of the obligation. But there is another mode of extinguishing the bailor's right of action after a sale by him to A. The bailor may receive from the bailee an agreed price for the goods, and in consideration thereof may authorize 8