7. The English transfer system

Another example of a consensual system is the Sale of Goods Act 1979 which applies in England, Wales and Scotland. Outside the sale of goods the transfer of movables is based on the ancient English common law system of transfer: a tradition system requiring a transfer of possession. As in French law in the consensual system of the Sale of Goods Act immediate passing of ownership is possible only as regards things which are at the same time specific and existing (in contrast to future) things. As in French law the purchase price will not pass to the seller when the contract is made.

The rule that ownership of generic goods cannot pass to the buyer before certain goods have been appropriated to the buyer led to an amendment of the Sale of Goods Act in 1995. Where the contract stipulates that the goods should be taken from a specified bulk, the buyer will under certain conditions (among which payment) become co-owner in that specific bulk (ss. 20A and 20B SGA).

It is likely that the English consensual system originated in a way similar to the development of the consensual system of French law. Originally the common law requirement of traditio applied to every transfer of movables. However, it was gradually held that, when a contract for the sale of a movable was made, it immediately passed constructive possession to the buyer (that is possession without actual power over the object), making the seller a detentor for the buyer. As a consequence, ownership passed when the contract was made, before any physical handing over had taken place. It involved a fictitious traditio similar to the continental constitutum possessorium.

The question whether the tradition system of the Sale of Goods Act is causal or abstract is not discussed in English law. Still, on systematic grounds, it can be demonstrated that the system is causal.²¹

Outside the area of sale of goods movable property should be transferred on the basis of the ancient common law system of transfer which requires a transfer of possession (traditio). An important instance to which the ancient requirement still applies is the gift from hand to hand (in contrast with the gift by deed). Here traditio may take the form of providing actual power, but in some cases a fictitious transfer of possession (that is a transfer of possession by mere agreement) will suffice.²² It is difficult to ascertain whether transfers outside the scope of the Sale of Goods Act need a valid legal ground. Most probably a transfer by deed is abstract, but as to the ancient common law transfer by traditio no conclusion is possible: there is no legislation, case law or literature which could give us any clue whatever.²³

8. The Dutch transfer system

For a valid transfer of movables Dutch law in principle requires the providing of possession to the acquirer. Furthermore, unlike the old civil code of 1838 the new 1992 code expressly provides that every transfer needs a valid legal ground (causa traditionis) (art. 3:84 BW²⁴). As a result, the transfer system may be classified as a causal tradition system. Moreover, art. 3:84 BW requires that the transferor should have the right to dispose of the thing in question (beschikkingsbevoegd).

There is some controversy whether the transfer of ownership always needs a real agreement. The majority of the authors assert that a real agreement is essential to any transfer. As in German law the real agreement about the transfer of movable property will normally be valid only if in addition possession is transferred. Possession may be provided by giving actual power (art. 3:114 BW) or by using a form of fictitious tradition (transfer of possession by mere agreement) (art. 3:115 BW). Article 3:115 provides as follows:

“For the transfer of possession a bilateral declaration without physical action suffices:

a where the transferor has possession of the thing and henceforth holds the thing for the acquirer under a stipulation made at the time of delivery;

b where the acquirer held the thing for the transferor;

c where a third party held the thing for the transferor and, after the transfer, holds the thing for the acquirer. In this case possession does not pass before the third party has acknowledged the transfer, or either the transferor or the transferee has informed the third party of the transfer.”

The first way of transferring possession by mere agreement, art. 3:115 sub a, is called constitutum possessorium. If, for example, a seller sells one of his horses to the buyer, and the buyer does not have a stable, the seller and buyer may agree that the horse stays in the seller’s stable. The transfer of possession and ownership then takes place by mere agreement. The second (art. 3:115 sub b) is called brevi manu. An example is the sale by a lessor of a car to the lessee of the car. First the lessee, the user of the car, held the car as a detentor for the lessor, now the transfer of possession turns the detentor into a possessor. The third way of transferring possession by agreement is called attornment by a third party. If the seller has deposited his goods in a warehouse, the seller and buyer may transfer possession by ordering the warehouseman, the depositee, to attorn to the buyer, so that the depositee henceforth holds the goods for the buyer.