Tag: Passing of property

Underwood v Burgh Castle [1922]: Passing of Property

Underwood v Burgh Castle [1922] is a seminal English case that dealt with the passing of property and risk in goods under the Sale of Goods Act, specifically when the goods were not yet in a deliverable state.

Case Name & Citation: Underwood Ltd v Burgh Castle Brick & Cement Syndicate [1922] 1 KB 343
Court: Court of Appeal (England and Wales)
Judgment Date: 27 October 1921
Judges: Bankes L.J., Scrutton L.J., and Atkin L.J.
Area of Law: Sale of Goods Act, Passing of property and risk

Case Facts: Underwood v Burgh Castle

Underwood Ltd agreed to sell a 30-ton condensing engine to Burgh Castle Brick & Cement Syndicate, under “free on rail” terms—meaning the seller was responsible for delivery to the railway in London.

At the time of sale, the engine was embedded in concrete and bolted to the factory floor. To deliver it, the seller needed to detach and dismantle it, which would take around two weeks and cost approximately £100.

During the loading process onto a railway truck, the engine was accidentally damaged. The buyers then refused to accept it, prompting the seller to sue for the price.

Issue

Had the property (ownership) passed to the buyer at the time of the contract? This depends on whether the goods were in a “deliverable state” under Section 18 of the Sale of Goods Act, 1893 (or equivalent Sale of Goods Act 1979).

Legal Principles Applied

Rule 1 (S.18): “Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property passes when the contract is made.”

This did not apply, since the engine was not in a deliverable state—still embedded and not ready to be delivered.

Rule 2 (S.18): “Where there is a contract for the sale of specific goods not in a deliverable state, and the seller must do something to put them into a deliverable state, property does not pass until that is completed and the buyer is notified.”

This rule did apply. Since the seller had to detach and dismantle the engine before delivery, the property had not passed at contract formation. The risk and ownership remained with the seller when the engine was damaged.

Judgment in Underwood v Burgh Castle

The Court of Appeal held in favour of the buyer.

The engine was not in a deliverable state at contract time; thus Rule 1 did not apply.

Property did not pass until the seller performed their obligation to prepare that engine for delivery and the buyer was notified—per Rule 2.

Consequently, the buyer was entitled to reject the damaged engine. The risk of loss lay with the seller.

References:

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Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17
A Case Summary of Varley v Whipp [1900]

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Dennant v Skinner [1948]: Passing of Property in Auction

Dennant v Skinner and Collom [1948] 2 KB 164 (KBD) is a key UK auction-sale case that clarifies when ownership (property) passes in the Sale of Goods Act context. Below are the details of the case.

Dennant v Skinner and Collom [1948] 2 KB 164 (KBD); [1948] 2 All ER 29
Court: King’s Bench Division in the High Court of Justice, England and Wales.
Judgment delivered by Hallett J.
Areas of Law: Mistake as to Identity, Passing of Property under Sale of Goods Act

Key Facts: Dennant v Skinner

Mr Dennant sold a Commer van at auction. A bidder who identified himself as “George Albert King” from a reputable firm won the sale.

After the auction, King paid with a cheque and signed a certificate stating that ownership would not pass until the cheque cleared.

The cheque bounced, and King had no real connection with the firm he claimed. Before the cheque could be cleared, King sold the van to a third-party purchaser. The vehicle then passed through others and eventually ended up with the defendant, Skinner.

The seller, Dennant, then sought to reclaim the van from Skinner.

Legal Issues

1. Did the contract become void due to the buyer’s mistaken identity?

2. Had property (ownership) passed to King at the moment the hammer fell, despite the dishonoured cheque and certificate?

Judgment in Dennant v Skinner

The court reaffirmed that, under auction law, a contract is concluded when the auctioneer’s hammer falls—even if full payment hasn’t occurred.

According to Rule 1 of Section 18 of the Sale of Goods Act 1893 (& equivalent section of the Sale of Goods Act 1979): For an unconditional contract involving specific goods in a deliverable state, property passes to the buyer at the moment the contract is made—regardless of payment or delivery timing.

Also, the certificate signed by King was ineffective to prevent passage of ownership, as it came too late—after the contract had already been executed.

Although King misrepresented his identity and the cheque failed, the court held there was no mistake affecting Mr Dennant’s intention at the time the contract was made. Dennant did not contract with the buyer because of who he claimed to be; he was simply the highest bidder at the auction. The case aligns with authority such as Phillips v Brooks and Lake v Simmons—where mere misrepresentation about identity in face-to-face dealings doesn’t void the contract if the seller intended to contract with the person physically present.

Therefore, property in the van passed to King immediately when the hammer fell.

As a result, the innocent third-party purchaser obtained good title. The only person who suffered loss was Dennant—the seller.

Final Thoughts

Dennant could not reclaim the vehicle. His only real remedy was against the fraudster King, who paid with a worthless cheque. He had a right to sue King for the price of the car (damages for breach of contract / dishonoured cheque) or potentially for fraudulent misrepresentation.

To conclude, King was a rogue who disappeared, so any judgment against him would likely be worthless in practice. This left Dennant bearing the loss, while Skinner (the innocent third party) kept good title to the car.

References:

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A Case Summary of Varley v Whipp [1900]
A Case Summary of Couchman v Hill [1947]

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