(2) Where a promissory note, bill of exchange, or other negotiable instrument payable to bearer or indorsed in blank is negotiated by the holder before maturity to a bona fide purchaser for value without notice, the purchaser acquires a good title to the instrument. (3) A person who is not the owner of goods may sell them, so as to pass the title of the owner, if he acts under the authority or with the consent of the owner, or under any special common-law or statutory power of sale, or under the order of a court of competent jurisdiction.131

(4) A sale made by a person not thereto authorized may be good as against the owner by estoppel, where the owner by his words or conduct is precluded from denying the seller's ownership or authority to sell.

(5) In some jurisdictions a person who has sold goods, but who continues in the possession thereof, can transfer the property therein to a bona fide purchaser, who obtains possession of the goods, notwithstanding the prior sale.

(6) By statute in England and in many states, purchasers from factors and other agents intrusted with and in possession of goods, or of the documents of title to goods, may under certain circumstances acquire good title to the goods, although the factor or agent is not authorized to sell.

(7) When the seller of goods has a voidable title thereto, but his title has not been avoided at the time of sale, the buyer, in general, acquires a good title, provided he buys them in good faith, for value, and without notice of the seller's defect of title.132

In General.

Not only must the parties to a sale be capable of contracting, but the seller must (subject to the exceptions mentioned) be the owner of the thing sold; for, as a rule, no one can pass to the buyer a better title than he himself possesses. "Nemo dat quod non habet." 183 A person, therefore, however innocent,

Ed.) p. 274; Crane v. Dock Co., 5 Best & S. 313, 33 Law J. Q. B. 224, 229; Benj. Sales, § 8 et seq.; Sale of Goods Act, § 22.

131 See Sales Act, § 23 (1), (2) (b); Sale of Goods Act, § 21 (1), (2) (b).

132 Sales Act, § 24; Sale of Goods Act, § 23.

138 Peer v. Humphrey, 2 Adol. & E 495; Whistler v. Forster, 32 Law J. C. P. 161; Cooper v. Willomatt, 1 C. B. 672, 14 Law J. C. P.

why buys goods from one not the owner, obtains, in general, no property in them whatever; and even if, in ignorance that the goods were lost or stolen, he resells them in good faith to a third person, he remains liable in trover to the original own

It is to be observed that, in the cases covered by the first and second exceptions, the buyer, like one who in good faith receives money in payment,185 obtains a good title as against all the world that is, even against one who has lost the thing sold, or from whom it has been stolen-while in the cases covered by the other exceptions the buyer simply obtains the title (if any) of a particular person, who may or may not be the true owner, without prejudice to the rights of any person who may in fact have a superior title.

Market Overt.

137

The rules of market overt apply only to a limited class of retail transactions.138 All shops in the city of London are market overt, for the purpose of their own trade; but a sale by sample is not within the custom, because the whole transaction, and not merely the formation of the contract, must

219; Cundy v. Lindsay, 3 App. Cas. 459; Stanley v. Gaylord, 1 Cush. (Mass.) 536, 48 Am. Dec. 643; Chapman v. Cole, 12 Gray (Mass.) 141, 71 Am. Dec. 739; Parsons v. Webb, 8 Greenl. (Me.) 38; Galvin v. Bacon, 11 Me. 28, 25 Am. Dec. 258; Prime v. Cobb, 63 Me. 200; Riford v. Montgomery, 7 Vt. 418; Bryant v. Whitcher, 52 N. H. 158; Barrett v. Warren, 3 Hill (N. Y.) 348; Williams v. Merle, 11 Wend. (N. Y.) 80, 25 Am. Dec. 604; Saltus v. Everett, 20 Wend. (N. Y.) 267, 32 Am. Dec. 541; Scollans v. Rollins, 173 Mass. 275, 53 N. E. 863, 73 Am. St. Rep. 284 (full citation of cases). The cases cited under the exceptions may also generally be cited under the rule. Benj. Sales, § 6.

134 Stone v. Marsh, 6 Barn. & C. 551; Marsh v. Keating, 1 Bing. N. C. 198, 2 Clark & F. 250; White v. Spettigue, 13 Mees. & W. 603; Lee v. Bayes, 18 C. B. 599; Hoffman v. Carow, 20 Wend. (N. Y.) 21; Courtis v. Cane, 32 Vt. 232, 76 Am. Dec. 174; Gilmore v. Newton, 9 Allen (Mass.) 171, 85 Am. Dec. 749; Riley v. Water-Power Co., 11 Cush. (Mass.) 11.

135 Miller v. Race, 1 Burrows, 452; Saltus v. Everett, 20 Wend. (N. Y.) 267, 32 Am. Dec. 541; Chapman v. Cole, 12 Gray (Mass.) 141, 71 Am. Dec. 739.

136 Benj. Sales, § 8.

187 See Wilkinson v. Rex, 2 Camp. 335.

take place within the open market.188 Outside the city of London, markets overt may exist by grant or prescription.139 The exception in favor of sales in market overt has never existed in the United States.140

Negotiable Intsruments.

Where a negotiable instrument is payable to bearer or indorsed in blank, so as to be transferable by delivery, a bona fide purchaser under the circumstances mentioned in the black-letter text acquires a good title to the instrument, although the seller had not himself a good title.141 Moreover, if a negotiable instrument is duly negotiated to a bona fide purchaser under the same circumstances, he holds the instrument free from most of the defenses available to prior parties between themselves.142 As has been stated, the transfer of the title to negotiable instruments stands upon a different footing from the transfer of title to goods.143

Sale under Power.

The owner may, of course, make a sale by an agent thereto authorized; and he may, as in the case of a mortgage, expressly confer on another the power of making a sale upon a certain contingency. But, besides these cases of sale with the consent of the owner, there are many cases where the authority is implied by law from the relation of the parties, or is conferred by law. Thus a pawnee of goods has authority, in case of default, to sell the goods pledged; 14 and the master of a ship has implied authority, in case of necessity, to sell the goods of the

138 Crane v. London Dock Co., 5 Best & S. 313, 33 Law J. Q. B. 224. 139 Chalm. Sale of Goods Act (6th Ed.) 60.

140 Dame v. Baldwin, 8 Mass. 518; Towne v. Collins, 14 Mass. 500; Wheelwright v. Depeyster, 1 Johns. (N. Y.) 471, 3 Am. Dec. 345; Hoffman v. Carow, 22 Wend. (N. Y.) 285; Hosack v. Weaver, 1 Yeates (Tenn.) 478; Easton v. Worthington, 5 Serg. & R. (Pa.) 130; Browning v. Magill, 2 Har. & J. (Md.) 308; Roland v. Gundy, 5 Ohio, 202; Ventress v. Smith, 10 Pet. (U. S.) 161, 9 L. Ed. 382; 2 Kent, Comm. 324. 141 Norton, Bills & Notes (3d Ed.) 11, 204.

142 See Norton, Bills & Notes (3d Ed.) 216 et seq.

143 Ante, p. 4.

1442 Kent, Comm. 582; Schouler, Bailm. § 227 et seq.; Tiffany, Ag. 41; Guinzburg v. H. W. Downs Co., 165 Mass. 467, 43 N. E. 195, 52 Am. St. Rep. 525.

shippers of the cargo.148 So a landlord distraining for rent may sell the goods of his tenant.146 And a sheriff, as an officer on whom the law confers a power, may sell the goods of the defendant in execution; nor will the title to them be affected if the execution was voidable,1 though, if the defendant had no title, the sheriff can, of course, give none.148 It would be useless to multiply illustrations of the cases in which property may be sold, without the consent of the owner, under process of law. Estoppel.

The English Sale of Goods Act provides: "Subject to the provisions of this act, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell." 149 In other words, where the owner by his words or conduct causes another to believe that the goods belong to a third person and to buy them from such third person in that belief, he is estopped to assert his title against such buyer.150 Mere carelessness, however, on the part of the owner in

145 3 Kent, Comm. 173.

146 Woodf. Landl. & Ten. (13th Ed.) 479-481; Tayl. Landl. & Ten. (8th Ed.) § 57 et seq.

147 Turner v. Felgate, 1 Lev. 95; Manning's Case, 8 Coke, 94b; Emmett v. Thorn, 1 Maule & S. 425; Bank of U. S. v. Bank, 6 Pet. (U. S.) 9, 8 L. Ed. 299; Park v. Darling, 4 Cush. (Mass.) 197; Jackson v. Cadwell, 1 Cow. (N. Y.) 623; Woodcock v. Bennet, Id. 711, 13 Am. Dec. 568; Stinson v. Ross, 51 Me. 556, 81 Am. Dec. 591. Otherwise where the judgment or execution is void. Lock v. Sellwood, 1 Q. B. 736; Camp v. Wood, 10 Watts (Pa.) 118; Caldwell v. Walters, 18 Pa. 79, 55 Am. Dec. 592; Kennedy v. Duncklee, 1 Gray (Mass.) 65. See Jetton v. Tobey, 62 Ark. 84, 34 S. W. 531.

148 Farrant v. Thompson, 5 Barn. & Ald. 826; Shearick v. Huber, 6 Bin. (Pa.) 2; Griffith v. Fowler, 18 Vt. 390; Buffum v. Deane, 8 Cush. (Mass.) 41; Champney v. Smith, 15 Gray (Mass.) 512; Williams v. Miller, 16 Conn. 146; Symonds v. Hall, 37 Me. 354, 59 Am. Dec. 53; Coombs v. Gorden, 59 Me. 111; Bryant v. Whitcher, 52 N. H. 158.

149 Section 21 (1), followed in Sales Act, § 23 (1).

150 Pickard v. Sears, 6 Adol. & E. 469; Gregg v. Wells, 10 Adol. & E. 90; Freeman v. Cooke, 2 Exch. 654; Knights v. Wiffen, L. R. 5 Q. B. 660. See, also, Henderson & Co. v. Williams (1895) 1 Q. B. 521. Cf. Anderson v. Read, 106 N. Y. 333, 13 N. E. 292; post, p. 31.

guarding his property, is not enough to create an estoppel.151 To create an estoppel, he must by his words or acts, on which the buyer has relied, have misled the buyer.152

Same-Sale by Person in Possession of Goods.

At common law a person in possession of goods, although with the consent of the owner, cannot, as a rule, confer on another, either by sale or pledge, any better title to the goods than he himself has.153 Authority to sell is not to be inferred from the mere possession of goods.154 A mere bailee can give no title.155 Nor, where the question is unaffected by statute, can a buyer in possession under a so-called conditional sale pass title to a bona fide purchaser.156 Intrusting another with the possession, indeed, if accompanied by other circumstances investing the possession with the appearance of ownership, may estop the owner from denying the ownership of the person whom he has so trusted, as against a buyer from him who has

151 Knox v. American Co., 148 N. Y. 441, 42 N. E. 988, 31 L. R. A. 779, 51 Am. St. Rep. 700; Bangor Electric Light & Power Co. v. Robinson (C. C.) 52 Fed. 520; O'Herron v. Gray, 168 Mass. 573, 47 N. E. 429, 40 L. R. A. 498, 60 Am. St. Rep. 411. Cf. Scollans v. Rollins, 173 Mass. 275, 53 N. E. 863, 73 Am. St. Rep. 284.

152 Farquarson v. King (1902) App. Cas. 325.

153 "At common law a person in possession of goods could not confer on another, either by sale or by pledge, any better title to the goods than he himself had. * The general rule was that to make either a sale or a pledge valid against the owner of the goods sold or pledged, it must be shown that the seller or pledger had authority from the owner to sell or pledge, as the case might be. If the owner of the goods had so acted as to clothe the seller or pledger with apparent authority to sell or pledge, he was at common law precluded as against those who were induced bona fide to act on the faith of that apparent authority, from denying that he had given such an authority, and the result as to them was the same as if he had really given it. But there was no such preclusion as against those who had notice that the real authority was limited." Cole v. Bank, L. R. 10 C. P. 354, at page 362, per Blackburn, J.

154 Cole v. Bank, supra; Johnson v. Credit Lyonnais, 2 C. P. Div. 224, affirmed 3 C. P. Div. 32; Saltus v. Everett, 20 Wend. (N. Y.) 267, 32 Am. Dec. 541; Covill v. Hill, 4 Denio (N. Y.) 323.

155 Wilkinson v. King, 2 Camp. 335; Covill v. Hill, supra; Leigh v. Railroad Co., 58 Ala. 178; Baker v. Taylor, 54 Minn. 71, 55 N. W. 823: Rumpf v. Barto, 10 Wash. 382, 38 Pac. 1129.

156 Post, p. 135.