Rights of property may arise simultaneously with the making of a contract, and may be enforced by the owner though he was not a party to the contract. His right of action is not based on the law of contracts, but on the law of property. Such a right may be legal or equitable. When a seller ships goods in fulfilment of an order, for instance, the legal title to the goods ordinarily passes to the consignee at the time of shipment, which is the time when the carrier contracts with the consignor to deliver the goods to the consignee. If the carrier loses or misdelivers the goods the consignee can sue the carrier or indeed anyone else who may have dealt with the goods wrongfully, not by virtue of the contract which the carrier has made, but because of his right of property which arose when that contract was made. If, indeed, the liability of the carrier depends wholly on a promise in the bill of lading, then the question must arise, who can sue on contract contained in the bill of lading.2 The case of the carrier if typical Whenever property other than money or negotiable paper payable to bearer is delivered, in accordance with a contract of sale, to a third person for the purchaser, the title will ordinarily pass to the purchaser at that time, and he will acquire a right of action though not a party to the contract made between the seller and bailee.3 The right of property transferred in many cases, however, is equitable. Whenever property is delivered to one person under such circumstances that the legal title passes to him, but he undertakes to deliver that specific property or its proceeds to a third person or use the property for his benefit, the relation of trustee and cestui que trust arises.4 When money or negotiable paper payable to bearer or indorsed in blank is delivered to another the legal title will generally if not necessarily pass, and the right of the person for whose benefit the delivery is made will be equitable, though in the case of money the appropriate remedy of the cestui que trust is ordinarily money had and received.5 The fact that the remedy in such
1 For some examination of the Civil Law on the subject, see 16 Harv. L. Rev.
2 See Elliott on Railroads, Sec.1692; Williston on Sales, Sec.426.
3See Thomas v. Atkinson, 94 S. Car. 125, 77 8. E. 722.
4 Forbes v. Thorpe, 209 Mass. 570, 95 N. E. 955.
5 "Whenever one person has in possession money which he cannot conscientiously retain from another, the latter may recover it in this form of action, subject to the restriction that the mode of trial and the relief which can be given in a legal action are adapted to the exigencies of the particular case, and that the transaction is capable of adjustment by that procecases is in assumpsit has often blinded courts to the fact that the right of action is not based on principles of contract.6 Such rights of property are not generally hard to distinguish from contract rights, though in many cases courts have confused the two. The inquiry whether a specific fund or res is to be transferred to the beneficiary furnishes a ready test.7 In the early English law prior to the introduction of assumpsit a beneficiary was allowed to enforce a claim through the actions of debt and account as if he had a property right under circumstances where according to modern law he would have neither legal nor equitable title, and it has been ingeniously argued that as indebitatus assumpsit was allowed after its introduction wherever a debt existed, the beneficiary should still be permitted to recover in such cases.8 But the modern division between contract and property is not based merely on rules of procedure in assumpsit and other actions; but because as matter of substantive law that division is accurate. The equitable rules defining a trust have superseded the old distinctions in debt dure without prejudice to the interests of third persons. No privity of contract between the parties is required, except that which results from the circumstances." Roberts v. Ely, 113 N. Y. 128, 131, 20 N. E. 606. To similar effect see McKee v. Lamon, 159 U. S. 317, 322, 40 L. Ed. 165, 16 Sup. Ct. 11; Nebraska, Bank v. Nebraska. Hydraulic Co., 14 Fed. 763; Bither v. Packard, 115 Me. 306, 312, 98 Atl. 929, 932; Nash v. Commonwealth, 174 Mass. 335, 337, 54 N. E. 865; Edwards v. Thoman, 187 Mich. 361, 163 N. W. 806; Devries' Estate v. Hawkins, 70 Neb. 666, 97 N. W. 792; Commercial Travelers' Home Assoc v. McNamara, 42 N. Y. Misc. 258, 86 N. Y. S. 608. 6The mistakes are twofold. Cases of trust are treated as involving merely questions of contract. Allen v. Thomas, 3 Met. (Ky.) 198, 77 Am. Dec. 169; Bank of Laddonia v. Bright-Coy Comm. Co., 139 Mo. App. 110, 120 8. W. 648; Price v. Truadell, 28 N. J. Eq. 200, 202; Bennett v. Merchantville Building Assoc., 44 N. J. Eq. 116; Delaware & Hudson Canal Co. v. Westchester Bank, 4 Denio, 97. Cases of mere contract rights are called trusts. Follansbee v Johnson, 28 Minn. 311, 9 N. W. 882; Rogers v. Gosnell, 51 Mo. 466, 469, The true distinction is well presented by the facts and is explained in the opinions in Fay v. Sanderson, 48 Mich. 259, 12 N. W. 161; Hidden v. Chappei, 48 Mich. 527, 12 N. W. 687. See also Miller v. Farr, 178 Ind. 36, 98 N. E. 806; Staley v. Weston, 92 Kan. 317,140 Pac. 878; Beattie Mfg. Co. v. Gerardi, 166 Mo. 142, 65 S. W. 1035; Belknap v. Bender, 75 N. Y. 446, 31 Am. Rep. 476; Roberts v. Ely, 113 N. Y. 128, 20 N. E. 606.
7Thomas v. Atkinson, 94 S. Car. 126, 77 S. E. 722 (cf. O'Connell v. Mercantile Trust Co., 165 Mo. App. 398, 147 8. W. 841).
843 Am. L. Reg. (N. S.) 764, 44 id. 112; 47 ill 73, by Professor Crawford D. Hening and account because they are intrinsically sounder, and though in contracts for the benefit of third persons or in which third persons are interested if the old analogies of debt and account were followed a better, because a more liberal, doctrine might be reached than that which the modern English courts have attained, that doctrine would nevertheless itself be narrow and wholly unsatisfactory, with limits indefensible on any grounds but those of ancient history in the main repudiated or forgotten by the courts centuries ago.9 This ancient history, however, certainly makes even more striking the attitude of the modern English courts in wholly denying relief to third persons interested in contracts, since that attitude is to be contrasted not only with the law of Continental Europe and of the United States, but also with the early law of England itself.