Trustee v. mere statement that delivery has been given, or is hereby Sect. 61. given, is not delivery nor equivalent to delivery."1 Lord Young dissented, and, consistently with his opinions in the cases already referred to, he founded his judgment entirely on M'Bain's Case, quoting at length the opinions of Lords Selborne, Blackburn, and Watson in support of the view that anything in the form of a sale sufficed to confer the privileges of the Mercantile Law Amendment Act, notwithstanding a collateral agreement that it was to be only a security. The other case referred to was that of Liddell's Liddell's. Trustee v. Warr and Co.2 (1893), where Lord Young gave Warr. the leading opinion in favour of the validity of the transaction, and was in this instance supported by his colleagues on the ground "that there was a true sale, and therefore that the case of M'Bain applied." 3 It therefore becomes of importance to observe the facts which, in the opinion of the Court, constituted "a true sale" in the sense of M'Bain's Case. These were as follows:-A party applied to moneylenders for a loan of £250, which they agreed to give under the following documents, (1) an absolute assignation of household furniture bearing to be granted in implement of a sale at the price of £250, (2) an agreement by which the lenders hired the furniture to the borrower for three years at a rent which, in the time specified, fully repaid the sum lent with interest, and (3) a back letter signed by both lenders and borrower setting forth that the borrower was to have the furniture re-assigned to him when the halfyearly instalments (called in the lease, rent) were fully paid to the lenders. It was not disputed that the lenders "never had at any time any physical possession of the furniture or of the key of the house." "The question is," said Lord Young, "whether, and how far, you can impugn a contract by showing, by writing or by parole, that the true purpose of the parties was a transaction of loan. My opinion is that if the parties are acting honestly, and are sui juris, and not infringing any rule of bankruptcy law, they are at Sect. 61. Effect of present Act upon doctrine of M'Bain v. Wallace. Pledgee may re-transfer to true owner liberty to enter into a contract of sale, though their purpose be to give security to one of them-a lender of moneywhich security can be given by that means, and cannot be given by pledge. . . . It appears to me that it is lawful and in the interest of the community that it should be possible for the parties to carry out their desire by means of a sale. . . . It is quite true that it is the general doctrine of Scots law that there cannot be a security over moveables retenta possessione. But the law is advancing, and the maxim that there can be no security over anything that is in the debtor's possession, has suffered considerably of late years. . . . I do not think that the case of M'Bain marked any great advance in the law, but it was an advance in what I hold to be the right direction." 1 It remains to consider the effect of the present Act upon M'Bain v. Wallace, as interpreted by the foregoing cases. The sections of the Mercantile Law Amendment Act upon which that judgment was founded have been repealed, and in their place, we have now in Scotland the English rule of passing the property, which to a large extent effects the same object by giving the purchaser of specific goods a proprietory right in the subjects of sale. But this proprietory right which, so far as Scotland is concerned, is entirely due to the present statute, does not extend "to any transaction in the form of a contract of sale, which is intended to operate by way of mortgage, pledge, charge, or other security." It seems clear, therefore, that M'Bain's Case is no longer an authority, and that to render any security effectual, the subject must be completely delivered to the lender or pledgee. On the other hand, where goods are pledged and are delivered to the pledgee, either physically or by means of a under contract document of title, it has been recently held by the House of agency. of Lords (overruling a judgment of the Second Division of the Court of Session) that there is nothing to prevent the pledgee re-transferring to the true owner under a distinct contract of agency for the purpose of sale. The Court of 120 Ret. at pp. 994, 995. Session judgment proceeded on the ground that, while the Sect. 61. pledgee would not have lost constructive possession by merely handing the goods or transferring the document of title to a third party as his agent for sale, it was otherwise where the agent thus appointed happened to be the true owner of the goods. In the House of Lords it was held (1) that the contract of pledge was entered into in England, and fell to be decided by English law where the rule contended for in the Scottish Court had no place, and (2) that the theory ran counter to everyday commercial practice, and could not be maintained as a proposition in the law of Scotland.1 62.—(1.) In this Act, unless the context or subject Sect. 62. matter otherwise requires, "Action" includes counterclaim and set off, and in Scotland condescendence and claim and compensation: "Condescendence and claim" is the title applied to a claim in an action of "multiplepoinding" (= Eng. "interpleader "). "Compensation is the Scottish term for "set-off." 2 The word "action" chiefly occurs in Part V. of the Act-Sect. 49 et seq. "Bailee" in Scotland includes custodier: This general declaration was inserted in Committee, and was intended to supersede the necessity for repeating "custodier" along with "bailee." The word "custodier," however, has not been deleted throughout the body of the Act. See Sects. 18, 19, 20, 41, 43, 45, and 46. "Buyer" means a person who buys or agrees to buy goods: 1 North-Western Bank, Ltd. v. Poynter, etc. (1894), 21 Ret. 513, Revd. H.L. 32 S. L.R. 245. 2 Bell's Com. ii. 119. INTERPRE- Sect. 62. "Contract of sale" includes an agreement to sell as well as a sale: See COM., Sect. 1 ante, p. 4. "Defendant" includes in Scotland defender, respondent, and claimant in a multiplepoinding: "Delivery" means voluntary transfer of possession from one person to another: 2 Compare definition in Bills of Exchange Act 1882,1 Sect. 2. The word "voluntary" is here added, and the words "actual or constructive," which, in the definition referred to, are appended to "possession," are here omitted. "Actual" and "constructive" merely express different modes of possession, and are therefore superfluous. It is to be noted, however, that delivery itself may be either actual or constructive. Thus, it is constructive when there is a change of possession without any change of actual custody, e.g. where goods are transferred while held by a third person [Sect. 29 (3)], or where there is symbolical delivery by transfer of a bill of lading or otherwise.3 "Possession" is not defined in this Act, but a definition is attempted in the Factors Act 1889, Sect. 1 (2). Benjamin calls attention to the different meanings attached to "delivery," but Chalmers suggests that it is more correct to say that a delivery which is effectual for one purpose is ineffectual for other purposes. For instance, delivery to a carrier generally passes the property to the buyer, but does not defeat the right of stoppage in transitu, while delivery by the carrier to the consignee does defeat that right." 145 & 46 Vict. c. 61. " 6 2 Pollock and Wright on Possession, p. 46, and p. 72 et seq. 3 As to "symbolical delivery," see Coм., Sect. 28 ante, p. 133. 452 & 53 Vict. c. 45. 5 Benjamin, pp. 677 and 768. See also Coм., Sect. 29 ante, p. 137. 6 Chalmers on Sale of Goods Act, p. 109. "Document of title to goods" has the same mean- Sect. 62. ing as it has in the Factors Acts: See COM., Sect. 25 ante, p. 125, and Factors Act 1889, Factors Acts" mean the Factors Act, 1889,1 the See text of these Acts, Appendix I. post, pp. 296, 302. "Fault" means wrongful act or default: See Sects. 7, 9, and 20. "Future goods" mean goods to be manufactured or acquired by the seller after the making of the contract of sale: The same definition is contained in Sect. 5 (1) ante, p. 27, and see Cом. ante, p. 30. "Goods" include all chattels personal other than things in action and money, and in Scotland all corporeal moveables except money. The term includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale: In the Stamp Act 1891, the expression used is "goods, wares, and merchandise," following Sect. 174 of the Statute of Frauds repealed by this Act. Goods," in this and most other statutes, include wares and 1 52 & 53 Vict. c. 45. 354 & 55 Vict. c. 39, Sect. 111. 2 53 & 54 Vict. c. 40. In the revised Statutes called Sect. 16. See Schedule to this Act post, p. 290, and Appendix III. post, p. 348, note. |