grounded in the principles of agency law8 and estoppel,9 and founded in
statutory provisions such as sections 23, 24 and 25 of the Sale of Goods Act
and sections 2, 8 and 9 of the Factors Act.10 Caterpillar was concerned with
none of them; the case was decided instead on a very much expanded
version of the ‘market overt’ exception to the nemo dat rule. For
convenience, that expanded version will hereafter be called ‘the expanded
rule’. Before turning to the expanded rule, its progenitor, the doctrine of
‘sale in market overt’, must first be examined.
I. SALE IN MARKET OVERT
A. The nature and scope of the market overt rule
In England, the ‘market overt’ rule is currently found in section 22(1) of
the United Kingdom Sale of Goods Act 197911 (‘UK SGA’). It reads:
‘Where goods are sold in market overt, according to the usage of the
market, the buyer acquires a good title to the goods, provided he
buys them in good faith and without notice of any defect or want of
title on the part of the seller.’
The rule, although statutorily codified, is common law in origin. As a
common law rule, it has existed since (at least) the time of Sir Edward
Coke.12 Section 22(1), according to the Chief Justice in Caterpillar, represents
the ‘statutory encapsulation’ of the common law rule;13 the common law
informs the scope of section 22(1).
The market overt doctrine may be briefly described as follows: If goods
are purchased in a market overt, and provided certain other conditions are
satisfied, the bona fide buyer obtains a good title, although the seller had
none to give. This rule was originally evolved to promote commerce.14 The
word ‘market’ is used in the sense of denoting a place where trading is
conducted. Only certain markets are, in law, ‘markets overt’. Every shop
within the City of London is by custom a market overt.15 Outside the City,