Transfer by Delivery (Traditio)

The appropriate mode of transfer for res nec mancipi (and, in the Justinianic law, for all property) was delivery, or traditio. This was a natural law mode of transfer, and so was open to non-citizens.

(1) General Requirements for Transfer

(a) Title

Suppose that you buy a book from a dealer in second-hand books. You have every reason to believe that the dealer is the owner of the book, and no reason to suspect otherwise. In other words, you are in good faith. It then turns out that, some time ago, the book was stolen from me. I claim the return of the book from you. The law has to choose here between two innocent parties, you and me. We neither of us deserve to lose out. However, there is only one book so, unless we are to share it, one of us must lose out. Which of us is it to be? There is no obvi­ously decisive reason to favour either of us.^[1104]

In Roman law, the decision was taken to favour the original owner.^[1105] The transferee cannot get any greater right than the transferor has. If the transferor has no right to the property, the transferee will equally acquire no right. Good faith is irrelevant to this question. This rule arises from the nature of real rights, considered in the previous chapter.^[1106] In the example given above, I was owner of the book. Ownership is a real right. It is in the nature of real rights that they are enforceable against anyone. As my ownership is a real right, I can enforce it against you just as much as I could have done against the thief.

iuris· ad alium transferre potest quam ipse haberet (‘nobody can transfer a greater right to another than he himself has').^[1108] Sometimes a shorter version, nemo dat quod non habet (‘nobody gives what he does not have'), is used. The rule is often referred to as the nemo dat rule or the nemo plus rule, and remains the law in Scotland.^[1109]

The right to transfer ownership is often known as ‘title', and normally arises from ownership. Sometimes, however, someone other than the owner has title, and so can validly transfer ownership.^[1110] Justinian gives the example of a pledgee.^[1111] Suppose I hand over some item of my property to you as security for a debt. I retain ownership. However, if I fail to repay, in most cases you will have the power to sell the item to pay off the debt, and can give ownership to the person you sell it to. As Justinian observes, though, this is only a partial exception to the rule, as you have this power because I have given it to you in our contract. A clearer exception existed for currency. While stolen coins continued to belong to the person from whom they were stolen, ownership was lost if they were given to someone else who was in good faith, and the coins became so mixed with the recipient's own money that they could not be identified. The original owner was left with a claim against the person who gave the coins to the recipient.^[1112] This is a practical rule, arising because the nature of currency justifies special treatment, and is commonly found in modern legal systems.^[1113]

(b) Capacity and Excluded Transfers

It sometimes also happened that the owner of property, although having title in the sense in which that word is used here, was nonetheless unable to transfer ownership.^[1114]

This inability might be a result of restricted capacity.

There could also be a general restriction on particular forms of transaction. A statute might prohibit transactions of a particular kind. The effect these had on transfer depended on the terms of the statute, which might either expressly state the consequences of breach or else leave this as a matter of interpretation. A dis­tinction is made between three broad situations.^[1115] A lex (statute) might be perfecta (perfect), minus quamperfecta (less than perfect) or imperfecta (imperfect). The distinc­tion between these does not lie in the consequences of entering into a prohibited agreement. Any such agreement would be unenforceable, whichever category it fell into.^[1116] Rather, the distinction lay in the consequences of carrying out the prohibited agreement. After all, merely to say that people may not do something tells us nothing about the consequences if they proceed anyway.^[1117] A statutory prohibition could have the consequence that a transfer in breach is void, but there are other possibilities. For example, suppose that there is a statute imposing additional requirements on the sale of livestock in the public marketplace. I buy a cow from you in breach of this prohibition, and pay you the agreed price. If the purpose of the prohibition is to protect purchasers, it makes no sense to deny effect to the transfer of ownership. If that was the consequence, you would still own the cow and also have the money, which would hardly be consistent with protecting the purchaser. On the other hand, it might make sense to allow me to keep the cow and also reclaim the price. Again, if the purpose is the protection of public health, it might make more sense to have the state confiscate both the cow and the purchase price.

Of the three categories, however, the lexperfecta seems to have been more com­mon over time. A lex perfecta was a statute that provided that any attempted transfer in breach of the lex was void and ineffective. The transferor remained owner. A transfer in contravention of a lex minus quam perfecta would be effective, in the sense that the transferee became owner, but the lex imposed some other penalty on one or both of the parties.^[1118] For example, some punishment might be imposed on the parties, while leaving the validity of the transfer itself unimpaired. Finally, a trans­fer in contravention of a lex imperfecta was effective and did not incur any penalty, but the money or property transferred could not be recovered.^{[1119] [1120] An example of a lex imperfecta is an early statute, the lex Cincia," which prohibited gifts above a certain limit. This rendered a promise to give such a gift unenforceable. If the gift was given anyway, though, the donor could not recover it.[1121]}

(c) Consent

There could be no valid transfer of ownership without the mutual consent of the parties.^[1122] The transferor had to intend to transfer ownership to the transferee, and the transferee had to intend to receive ownership from the transferor. Sup­pose that Marcus is owner of a particular item of property.

This requirement for consent allowed the parties to make the transfer condi­tional on some event. This condition might be suspensive or resolutive. We shall see more in Chapter 17 on suspensive and resolutive conditions, including how to identify into which category a condition falls.^[1124] However, in simple terms, a suspensive condition in a transfer would provide that the transferee would only become owner on the occurrence of the stated event. If the transfer was sub­ject to a resolutive condition, by contrast, the transferee would become owner immediately, subject to a right of the transferor to reclaim the property or the transferee to restore it on the occurrence of some event. Unless and until that happened, the transferee would be owner, and so the transferor would not have any remedies based on ownership with respect to the property.^[1125] If the trans­fer was subject to a suspensive condition, though, the transferee would remain owner. An important example of this was that parties to a sale could agree that the seller would remain owner until the buyer had paid the price in full.^[1126] This agreement might take the form of the buyer agreeing to hold as lessee until the price was paid, essentially as in a modern hire purchase contract.^[1127]

Consent to transfer ownership could be vitiated by deceit or coercion. These are discussed more fully in Chapter 24.^[1128] However, because they have property law consequences, it is appropriate to say something about them here.

The distinction between coercion and deceit in property law becomes par­ticularly important when third parties become involved. Consider the following two situations:

• Aulus owns a particular item of property. By deceiving Aulus about the value of the property, Numerius prevails upon Aulus to sell it to him. Shortly after­wards, Numerius sells the property to Tertius at its true value, which is much higher than Numerius paid Aulus.

• Aulus owns a particular item of property. Numerius turns up with an armed gang and, using threats of serious violence, prevails upon Aulus to hand over the property. Shortly afterwards, Numerius sells the property to Tertius.

In both cases, Aulus would have a remedy against Numerius. Numerius may have disappeared or be insolvent, though, and at any rate is in no position to return the property to Aulus. Could then Aulus recover the property from Tertius? Here the answer differs between cases of coercion and deceit. Recovery of property on the basis of deceit was only normally possible against the actual perpetrator of the deceit.^[1133] Third parties acquiring from the perpetrator would only be liable to hand over the property to the victim of the deceit if they were in bad faith or had taken the property without giving value for it.^[1134] As to coercion, Ulpian indicates that the point was debated.^[1135] However, he tells us that the conclusion reached was that, in cases of transfer resulting from coercion, a third party acquirer was liable even if in good faith. This was the case even if the coercion was applied by someone other than the transferee.^[1136]

The position of third party acquirers was thus very different in cases of coer­cion and of deceit. Ulpian points to a procedural difference: the actio metus is a real action, meaning that it can be brought against anyone having the property.^[1137] This explanation, however, is not open to the modern lawyer, even though the law on this point is the same in Scotland.^[1138] A more theoretical explanation would be the following. In cases of coercion, the transferor has not truly consented to the transfer at all. There is therefore a necessary element in the transfer that is missing, with the result that the ostensible transferee does not become owner. As a non-owner, the transferee is therefore unable to transfer ownership to the third party. By contrast, where a person is persuaded through deceit to agree to trans­fer ownership, he or she has nonetheless given that agreement. As a result, the deceitful transferee does become owner. The deceit justifies the transferor having a personal remedy against the transferee, but that remedy (being personal to the original transferor and transferee) cannot affect a third party acquirer.^[1139]

(d) Identification

A valid transfer also required that the property be identified.^[1140] As Pomponius tells us, an ‘uncertain part' of property cannot be transferred.^[1141] As a result, I would not be able to transfer to you ‘whatever right I have in the land'. Equally, I would not be able to transfer to you ten bottles of wine from my wine cellar, without identifying which specific bottles you were to get. Again, suppose that I was to decide to build a number of houses and sell them off. Some open ground will remain once the houses are built, and I intend that the purchasers of each house are to have co-ownership of the open ground. When I build the first house, I sell it to you, stating that you are getting it together with co-ownership of the open ground, along with the purchasers of the other houses to be built.^[1142] In fact, in this situation you would acquire no right at all in the open ground.^[1143] The rea­son for this is that, until the other houses are built, it is not possible to say what the extent of the open ground is (because it will be whatever is left over once build­ing is complete) or what your share is (because that depends on how many other houses are built, and so how many other purchasers you have to share the open ground with). If, however, the only problem is that the wrong name has been used for the property, it still counts as identified if the parties are in fact agreed about what it is that is being transferred.^[1144]

(e) Just Cause (lusta Causa)

Even where an undoubted owner, voluntarily and with full capacity, delivers clearly identifiable property to another, the fact of that delivery does not of itself necessarily mean that ownership is being transferred. After all, there are many reasons why someone might hand over property to another without any inten­tion to transfer ownership. The transaction may be one of loan,^[1145] for example, or hire. While we have seen that consent to a transfer is necessary for the valid­ity of that transfer, that consent does not exist in isolation from the transaction or purpose that has led to it. If I transfer ownership to you, there will be some reason for it, such as a contract of sale, an intention to make a gift, or whatever it may be. Whenever one person delivers an item of property to another, it will be necessary to establish the reason for this delivery, because there will only be a valid transfer of ownership where that underlying reason justifies the conclu­sion that a transfer of ownership was what the parties intended. It is possible to go further, though. According to the jurist Paul, such an underlying transaction, justifying the transfer of ownership, was necessary to the validity of a transfer in Roman law.^[1146] Thus, for Paul, it was necessary for a valid transfer of ownership that there be some valid underlying transaction such as a sale or a gift, justifying the transfer of ownership. This underlying transaction is known as the iusta causa, or just cause for the transfer.

It is one thing to identify certain transactions as justifying a transfer of own­ership and others as not justifying this. A more difficult situation arises, though, where the underlying transaction is invalid for some reason. We have already seen one possibility, that the underlying transaction is illegal under some statute. Another possibility could be the parties having different understandings of the nature of the transaction. Suppose, for example, that I intend to give the property to you as a gift, while you believe that it is a sale. Here there is neither a contract of sale nor a valid gift, because there is no consensus between us.^[1147] Nonethe­less, we both intend that you should become owner. What, then, is the outcome? We have seen Paul's opinion, which would seem to suggest that there would be no transfer of ownership here. On the other hand, thejurist Julian appears to take a different view: ‘When indeed we agree on the thing being delivered, but disagree on the basis for delivery, I see no reason why the delivery should not be effective.'^[1148] He gives the examples of the transferor believing himself bound to transfer under a will, but the transferee believing that the transfer is due under contract, and the transferor giving money as a gift, but the transferee taking it as a loan.^[1149] On this view, the requirement for iusta causa is simply a requirement for some objective evidence of an intention to transfer.

There is then an apparent conflict in the texts here, as to whether a genuine underlying transaction is required for the validity of the transfer of ownership. It is impossible to speak with complete certainty about what the Roman law actually was.^[1150] The view taken depends on the extent to which contract and conveyance (transfer) can be considered separately. This divergence in the texts has given rise to a major division in the legal systems drawing on Roman law. On one side, there are the systems that are said to have a causal theory of transfer, so called because they require a genuine iusta causa to exist. In causal systems, if the underlying transaction is void, the transfer will also be void. On the other side, there are countries adhering to an abstract theory of transfer. In an abstract system of transfer, the validity of the transfer is viewed in the abstract, separate from consideration of the underlying transaction. In an abstract system, owner­ship may therefore pass to the transferee even where the underlying transaction is void. Where this leaves ownership in the ‘wrong’ place, the imbalance may be corrected by other means, such as the law of unjustified enrichment.^[1151] France is the most prominent example of the causal theory of transfer, Germany of the abstract theory. Scotland probably, though not certainly, has an abstract system of transfer.^[1152]

In favour of the causal view, the following may be said: ‘The principle of abstraction makes an artificial segregation between two legal acts which econom­ically and in the mind of the parties are part of one and the same transaction.’^[1153] All the same, there is much to be said for the abstract view of transfer. After all, contract and transfer are two separate things. They involve different sorts of relationship, created in different ways. Take a sale as an example. When we enter into a contract of sale, we create rights and obligations as between ourselves, but rights under a contract only bind the parties to that contract. The act that makes the buyer owner, thus binding third parties as well, is in principle a separate act. It is one thing to agree to make someone owner, another actually to carry that out.

Moreover, we have already seen above with the lex Cincia that a transfer can be valid even where an underlying agreement is invalid. The same is true of the converse situation. Suppose that I agree to sell you goods that are in fact stolen. The transfer to you will be invalid and ineffective, for reasons we have already seen. The contract of sale, however, is undoubtedly valid,^[1154] or else you would have no contractual remedy against me for failing to make you owner.^[1155]

Finally, for all its intuitive attractions, it is not clear that a causal system gives a more just outcome between the parties, and an abstract system gives better pro­tection to third parties acquiring in good faith. Suppose that we attempt to make a contract involving the sale of an item of property. However, for some technical reason or other, the contract is not validly constituted. Nonetheless, we proceed to carry out the agreement. I give you the property, and you pay me the agreed price. In a causal system, the invalidity of the contract will mean that you do not become owner. I remain owner, yet since I have been paid it would not appear just to allow me to recover the property from you. Still less would it appear just to allow me to recover the property from a third party acquiring from you in good faith.^[1156] An abstract system of transfer avoids the difficulty by giving ownership to you, and so in turn to the third party acquirer, leaving me with a remedy in unjustified enrichment against you where that is appropriate.^[1157]

(2) Operation of Traditio

Even if all of the above requirements were met, a further step was necessary for the transfer of ownership. This was traditio, the delivery of the goods to the transferee: ‘Ownership of property is transferred, not by bare agreement, but by delivery and usucapio.’^[1158] Usucapio, the acquisition of ownership through a period of possession, is considered in Chapter 12.^[1159] Here we are concerned with delivery.

(a) General Nature of Traditio

Delivery, in simple terms, means the giving of possession by the transferor to the transferee.^[1160] There was a general discussion of possession in Chapter 10.^[1161] Here we will consider the specific application of the idea of possession to the transfer of ownership. In brief, then, delivery requires the transferee to take physical control of the property, with the consent of the transferor, and with the necessary intention to hold as owner.^[1162] In the early classical period, there appear to have been suggestions that less was required, for example that it was enough for the transferee to attach his or her seal to goods being transferred.^[1163] However, this view was ultimately rejected, the position being instead that the purpose of the seal was to identify the goods being transferred rather than to effect delivery.^[1164] There is evidence that, in the case of gifts, a weaker delivery requirement was imposed, recognising delivery of documents as a symbolical equivalent of delivery of the property itself.^[1165]

(b) Direct Delivery

The simplest method of making delivery of property is simply by physically handing the property over to the transferee. When the transferee takes posses­sion, he or she will become owner (assuming that there is no other difficulty, such as a lack of title on the transferor’s part). Delivery should not be understood so narrowly as to require a direct physical handing over, however. As mentioned already, delivery means a transfer of possession, and the essence of possession is physical control coupled with the requisite intention. Assuming that the mental element of possession is present, what delivery requires is that the transferee be given control of the property. This can be done, for example, by the transferor placing the thing in the transferee’s presence,^[1166] the transferor leaving the thing at the transferee’s house,^[1167] or the transferee placing a guard on the thing.^[1168]

Another way in which control can be given is by handing over the key to the place where goods are kept. This is known as traditio clanium (delivery of keys).^[1169] The jurist Papinian tells us that the key had to be handed over at the store itself.^[1170] It is some­times said that the reason for this is that the delivery of a key elsewhere than at the store itself would be a merely symbolic act. However, Gordon gives a more nuanced view, which seems more consistent with the idea of delivery as a transfer of control:

If the handing over of the keys took place in such circumstances that there was no real control it would still be possible to deny it efficacy. On the other hand, if the principle of acquisition of possession is control of the thing it is probably too narrow to limit the efficacy of a transfer of keys to the case where the delivery takes place at the store.^[1171]

(c) Traditio Longa Manu

Traditio longa manu (long hand delivery, or delivery by pointing out) was used particu­larly for large, heavy items, which could not easily be carried off.^[1172] This was done, in effect, by declaring in the presence of the thing that the transferor was giving up possession to the transferee. More difficult to justify, but nonetheless accepted, was the idea of a transfer of possession of land by pointing out its boundaries from a tower on neighbouring land, without the transferee even setting foot on the land.^[1173]

(d) Delivery by Permission to Take Possession

Although to talk of property being delivered implies an active handing over of possession to the transferee, this was not quite the position. More accurately, what was required was that the transferee take possession with the consent of the transferor. For example, a politician throwing coins to a crowd of voters^[1174] does not know who is going to pick up each coin. He intends ownership to go to the first to pick each up, and this is what happens.^[1175] This situation is known as traditio incertae personae (delivery to an uncertain person). Another example, given by Ulpian, is a case where one person is given permission to take stone from another's ground. Here, too, the transferee becomes owner by his or her own act, with the transferor's permission.^[1176]

(d) Traditio Brevi Manu

Suppose that the property to be transferred is already in the physical custody of the transferee. Perhaps the owner of land has agreed to sell it to the tenant, or the owner of goods on hire has agreed to sell them to the hirer. It would seem unreasonable to require the tenant or hirer in these cases to hand the property back so that it can be delivered to them, and that was not in fact required. Delivery would instead be deemed to occur when the parties agreed on that. Gaius and Justinian both present this as a case of transfer by intention.^[1177] For Scots law, too, Erskine considers this to be a purely fictional delivery.^[1178] However, given that delivery is a giving of possession, perhaps the better view is to say that this is a case where the mental element of pos­session is acquired later than the physical element. The physical element is already satisfied when (in the case of a hire) the property is taken on hire. The mental element comes into existence later, when the sale takes place. Mental and physical elements then coinciding, the transferee acquires possession and delivery takes place.

(e) Constitutum Possessorium

Suppose that I am owner of an item of property, say a carriage. To raise some money, I enter into an agreement with you whereby I will sell the carriage to you, and you will then hire it back to me. I will remain in physical custody of the carriage throughout.^[1179] Is there effective delivery here? On one hand, it would seem just as unreasonable here as in traditio brevi manu (above) for the property to be handed over to you only then to be immediately handed back. As we saw in Chapter 10,^[1180] it is possible to possess through another, so you can possess the carriage even though it remains in my hands. On the other hand, though, if this becomes effectively transfer by agreement, that threatens to undermine the delivery requirement altogether. Indeed, the name given to this form of delivery (constitutum possessorium), translates as ‘possessory agreement'.^[1181]

There are also theoretical arguments against its recognition. While it is quite possible to possess property through someone else, as we saw in Chapter 10 the idea of acquiring possession through another's acts is more problematic.^[1182] The jurist Celsus points to another objection, if only to reject it: ‘What I possess in my own name, I can possess in the name of another: nor do I thereby change the basis of my possession, but rather I cease to possess and make the other pos­sessor through my agency.'^[1183] The reference to ‘the basis of my possession' relates to the rule that a person possessing on one basis cannot change to possessing on another basis.^[1184] Because of these concerns, there is some doubt as to whether constitutum possessorium was accepted in classical law.^[1185] It was, though, certainly accepted in post-classical law.^[1186] This often involved the transferor reserving a purely fictitious, short-term usufruct,^[1187] as a means of circumventing the delivery requirement.^[1188]

(f) Traditio in Scots Law

Scots law has been greatly influenced by Roman law in this area,^[1189] at least as far as moveable property is concerned. The development of the law regarding trans­fer of ownership of land was strongly influenced from the Middle Ages onwards by the (non-Roman) feudal law, which has tended to make the relationship with Roman law more complex.^[1190] Even in moveables, the Roman-influenced rules are now largely restricted to transfers other than by sale.^[1191] In other transfers of corporeal moveable property, however, the delivery requirement applies.^[1192] Indeed, if anything, the requirement for the giving of control to the transferee has been more strictly applied in Scotland. For instance, there is little trace of any acceptance of delivery by purely symbolical means,^[1193] and there is no sign in Scots law a person could be given possession of land simply by having its bound­aries pointed out from a distance.

Greatest difficulty has perhaps been caused by constitutum possessorium as a method of making delivery. On one view, the acceptance of constitutum possessorium should have been easier in Scots law, which has no difficulty with the idea of acquiring possession through another's acts. There is indeed authority justifying the posi­tion that constitutum possessorium has been received in Scots law, at least where the transferor's continued holding is on some proper, new legal basis. In Orr’s Trustee v Tullis,¹'⁷ the tenant of a printing office entered into an agreement whereby he sold his printing machinery to his landlord. The landlord then granted a new lease to him, including hire of the machinery. The tenant retained physical custody of the machinery throughout. It was held that the machinery had been validly delivered to the landlord. Referring to Roman law and to ius commune¹¹⁴ writers, the Lord Justice-Clerk said:¹¹⁵

it is not correct to say... that some ostensible corporeal act — some change in the actual local situation or custody of moveables sold, is necessary to pass the property. That is only true when possession has not been attained by the pur­chaser. It is manifestly not true when possession has been attained. The simplest illustration of this is the case in which the thing sold is at the time of the sale in the possession of the purchaser. If a man hire a horse or carriage, and purchase it while his contract of hire is current, the property has passed; for no delivery could make the possession more complete than it was before. But as possession may be acquired and held through another just as effectually as by the owner himself, so, when the subject of the sale is in the hands of a third party who holds for the buyer, the property is as effectually transferred as if the buyer personally had possession.

The same rule has been followed more recently in Milligan v Ross.¹¹⁶ On the other hand, where questions of delivery have been raised in cases in which the Sale of Goods Acts have been engaged, constitutum possessorium has been overlooked.¹¹¹

Scots law does recognise one other form of delivery. This applies where goods to be delivered are in the hands of an independent third party. Delivery is made by giving notice of the transfer to the third party with custody of the goods.¹¹⁸ By contrast with other forms of delivery, this does not appear to be derived from Roman law.

¹⁷³ (1870) 8 M 936. See also Eadie v Young (1815) Hume 705; D Hume, Baron David Hume’s Lectures, 1786—1822, vol III (G C H Paton ed, Stair Society vol 15, 1952) 251-2. These all date to before the Sale of Goods Act 1893, so delivery was required even in a sale.

¹⁷⁴ See Chapter 4. The ius commune was the common legal tradition of Europe, to a great extent based on Roman law, that arose in the medieval period.

¹⁷⁵ (1870) 8 M 936, 945-6.

¹⁷⁶ 1994 SCLR 430.

¹⁷⁷ See e.g. Scottish Transit Trust Ltd v Scottish Land Cultivators Ltd 1955 SC 254.

¹⁷⁸ For a full account of this form of delivery, see C Anderson, ‘Delivery of Goods in the Custody of a Third Party: Operation and Basis’ (2015) 19 Edin LR 165; C Anderson, ‘Delivery of Goods in the Custody of a Third Party: The Role of the Custodier’ (2017) 21 Edin LR 143.