A pril, 1933

University of Pennsylvania
Law Review
And American Law Register
FOUNDED 1852
Published Monthly, November to June, by the University of Pennsylvania Law School
Copyright 1933, by the University of Pennsylvania.

VOLUME 8i APRIL, 1933 No. 6

CONTRACT AND CONVEYANCE IN THE CONFLICT OF LAWS

JoHN D. FALCONBRIDGEt
PART ONE

I. Characterizationof Property
II. Proper Law of a Contract
I. Conflict of Laws Restatement
2. Some Comparisons
3. English Rule
4. Provinces of Canada
III. Law governing the Conveyance of a Chattel
I. General Rule
2. Change of Situs without Consent of Owner
3. Renvoi
IV. Border Land between Contract and Conveyance
I. Lex Situs Different from Proper Law
2. Transaction in One Country and Recognition of Its
Effect in Another Country
3. Effect of Subsequent Transaction in New Situs
4. Particular Situations
(a) Sale and Agreement to Sell
(b) Stoppage in Transitu and Dissolution
(c) Substantial Validity
(d) Pledge and Lien
(e) Some Continental Views
' Dean of the Osgoode Hall Law School, Toronto, Canada; of Osgoode Hall, Barrister
at Law, 1899, Ontario Bar; M. A. 19o2; LL. B., 19o4, University of Toronto; K. C.
192i, Ontario Bar. Author of BANKING AND Bis oF EXCHANGE (4th ed. 1929) ; LAw oF
MORTGAGES (2d ed. 1931), etc., and of various articles on the conflict of laws and other
subjects.
(661)
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

V. Conditional Sales and Chattel Mortgages

i. General Principles
2. Particular Situations
(a) Title Valid by the Original Lex Situs
(b) Title Voidable by the Original Lex Situs
(c) Title Void by the Original Le%Situs
3. Conflict of Laws Restatement.

I. CHARACTERIZATION OF PROPERTY
The title of this article has been borrowed from the heading of one of
the sections of Goodrich on the Conflict of Laws,1 and it may seem unnec-
essary, if not foolhardy, on my part to venture to traverse the same ground-
impar congressus Achilli. It is, however, always possible that a restatement
of some of the situations arising in the border land between contract and
conveyance may be of interest, at least by way of suggestion, and that an
attempt, made originally in connection with English and Canadian cases,
to formulate and apply some working rules, may contain something of value
2
from the point of view of comparative law.
Some reference to the American Law Institute Conflict of Laws Re-
statement is inevitable in any discussion of a problem of conflict of laws
from the point of view of comparative law. If I may be so bold as to state
a general impression without attempting at the present time to prove that
it is well-founded, it would appear probable that this Restatement, prepared
with so much care and skill for the primary purpose of rendering uniform
the rules of conflict of laws within the limits of the United States, can
hardly fail to enlarge the cleavage existing between the rules of conflict of
laws prevailing in the United States and those prevailing in England and
generally in the British Dominions, and, a fortiori, will make more remote
any rapprochement between the rules prevailing in the United States and
those prevailing in countries outside the Anglo-American legal system. Just
because some of the rules contained in the Restatement may be peculiarly
appropriate to conflicts of laws between states so closely related as are the
different parts of the United States, they may be less appropriate to con-
flicts of laws in a wider field.
1 (1927) 347 ff., followed, as in the present article, by a discussion of the conditional
sale and chattel mortgage situations; cf. id. at 336 ff., as to conveyances of land and contracts
relating to land. See also (19o4) 64 L. R. A. 823 ff.; (19o8) ii L. R. A. (N. s.) ioo7 ff.
As to conditional sales and chattel mortgages, see the further references in § v, i, and note 32,
in the installment to be published next month.
' The contrast between contract and conveyance is discussed briefly in FooTx, PRIVATE
INTERNATIONAL LAW (5th ed. 1925) 284-286, 357, 446 ff. Cf. WESTLAKE, PRIVATE INTERNA-
TIONAL LAw (7th ed. 1925) §§ 156, 172, 216; DIcEy, CONFLICr OF LAwS (5th ed. 1932) rules
150-154, 163 and 164. The contrast is pointedly discussed by some continental writers, cited in
§ iv, in the installment to be published next month.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

I am of course especially diffident about expressing any adverse criti-

cism of the way in which lawyers of the United States are attempting to
solve their own domestic problems, but I may perhaps be permitted to state
my respectful agreement with some of the things which some of them have
said in criticism of an excessively nationalistic attitude towards the solution
of problems of conflict of laws, 3 and to express my view that it is regrettable
if the adoption of that attitude leads to increasing diversity of different sys-
tems of conflict of laws.
In the present article the discussion will be confined, so far as may be
practicable, to personal chattels or tangible movables, and will omit con-
sideration of intangible movables (including negotiable instruments) as
well as immovables of all kinds. Even within this limited sphere the dis-
tinction between a contract relating to a thing and a conveyance of a thing
presents itself as a matter of characterization 4 of the subject or question-
a matter which must be decided by a court as a necessary preliminary to the
court's selection of the proper law, that is, the law to be applied by the court
in deciding the main subject or question.
Preliminary even to the characterization of the subject or question
which is before the court is the characterization of the thing itself, if the
subject or question is one of property or relates to a thing. On this point the
Conflict of Laws Restatement (Proposed Final Draft No. 2) contains the
following sections:
227A. Whether property is real or personal is determined by the
law of the state in which the thing is situated.
228A. Whether rights in land are to be treated as equitably con-
verted into personal property depends upon the law of the state of situs
of the land.
229A. Whether personal property is to be treated as equitably
converted into rights in land depends upon the law that governs trans-
fer of the personal property.

The second and third of these sections are quoted, not because they are
relevant to the subject of the present article, but because they may help to
make clear one ground of criticism of the language of Section 227A. If it
may be assumed that the Restatement is not intended to be limited in its
application to cases of conflict of laws arising between states of. the United
States or between countries the laws of which are based upon English law,
it is submitted that its primary classification of property ought not to be
based upon the distinction between real and personal property, a distinction
' See Yntema, The Hornbook Method and the Conflict of Laws (1928) 37 YALE L. J.
463, especially at 474, par. b).
'In FALCOBRXDGE, LAWv OF MORTGAGES (2d. ed. i93i) 734, I have already suggested
characterizationas the equivalent of the French word qualification, which is unsuitable for
transliteration into English because the English word qualification already has several mean-
ings, different from that of the French word.
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

peculiar to Anglo-American law; but ought to be based upon the distinction

between immovable and movable property, which is not merely the technical
distinction prevailing in other systems of law, but one which corresponds
with the natural difference between land and other things. If English law,
or Anglo-American law generally, regards leasehold estates in land as per-
sonal property, and if, for certain purposes, it regards real property subject
to a trust for sale as notionally converted, and therefore personalty, or con-
versely regards money subject to a trust for investment in real property as
notionally converted, and therefore realty, it is nevertheless true that a lease-
hold estate in land is just as immovable in character as a freehold estate,
and that the real property not yet sold is still immovable, and that the money
not yet invested is still movable.
It should here be pointed out, by way of parenthesis and to avoid mis-'
understanding, that if a statute uses the expression "personal property",
instead of "movable property", in a rule of conflict of laws, effect must, at
least in England and in Canada, be given to the statute according to its
terms. Lord Kingsdown's Act,5 for example, authorizes a will of personal
property of a British subject to be made abroad in accordance with the forms
of any one of several specified laws; and as a leasehold estate in land is per-
sonal property, a will of a leasehold estate is within the statute,6 and for a
similar reason a will of the testator's beneficial interest under a trust for sale
of real property is within the statute, 7 but in neither case is the subject
matter movable property. A court which is bound by the statute must give
effect to it, but with regard to any question of conflict of laws relating to
the same subject matter which is not covered by the statute the court must
apply whatever law is applicable to it by virtue of its being immovable
8
property.
In other words, if property has to be characterized as one of the pre-
liminary steps in the selection of the proper law, that is, the law which gov-
5
THE WILLS Acr, 1861, 24 & 25 VIcM. C. 114 (i86i) (so cited by virtue of THE SHORT
TITims Acr, 1896, 59 & 6o VicT. c. 14 (1896)), re-enacted, nutatis mutandis, in some of the
provinces of Canada.
7
I1n re Grassi. Stubberfield v. Grassi. [I9o.1 i Ch. S84.
1n re Lyne's Settlement Trusts, [1919] i Ch. 8o.
SWe thus get the anomalous and patchwork result, which is not susceptible of being
defended on principle, but which is inevitable by reason of the terms of the statute, namely,
that (x) a will of a freehold estate in land is governed as to both form and substance by the
lex .itus; (2) a will of a leasehold estate (or any other interest in land which is regarded
by English law as personal property) is governed as to both form and substance by the lex
situs, except that as to form a British subject may use one of the alternative options afforded
him by Lord Kingsdown's Act; and (3) a will of movable property or pure personalty is
governed as to both form and substance by the law of the last domicile of the testator, except
that as to form a British subject may use one of the alternative options afforded him by
Lord Kingsdown's Act. See annotation in [1932] I D. L. R. 53, 55. It is not surprising that
sometimes even very learned continental writers have misunderstood the English decisions
and have confused personal property with movable property. See, e. g., i KAHN, A.BHAD-
LUNGEN ZUM INTERNATIONALEN PRIVATRECHT (Leipzig, 1928) 38, 8o-83; I FRANKENSTEIN,
INTERNATIONALES PRIVATRECHT (Berlin, 1926) 287; RAPPE, EINF0HRRUNGSGESETZ, 6
STAUDINGERS KOMMENTAR ZUm BGB (Berlin, 1931) 700.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

erns the subject or question which is before a court for decision, the prop-
erty should be characterized as immovable or movable, and not as real or
personal. I am of course aware that the main division of the subject of
property in Topics B and C of the chapter on property in the Conflict of
Laws Restatement is based on the distinction between immovables and mov-
ables, and not upon the distinction between realty and personalty. My first
point of criticism is precisely that in Topic A of the same chapter there is
no section which deals with the fundamental distinction between immovables
and movables, 9 or states what law determines whether property is immov-
able or movable, whereas great emphasis is laid upon the secondary dis-
tinction between real and personal property. So far the criticism might be
dismissed somewhat lightly, as being merely an objection to the Restatement
as being artistically incomplete, but it is submitted that the Restatement is
not only inartistic, but misleading. In their present form Sections 227A,
228A and 22 9 A suggest that the distinction between realty and personalty
has some bearing upon the choice of the proper law, and they do not suggest
that the distinction between immovables and movables lies at the base of
that same choice.
The right method of approach, it is submitted, is that which is indicated
in the case of In re Berchtold,10 namely, that for the purpose of the selection
of the proper law, property must be characterized as immovable or movable
according to the lex situs,'1 and that the distinction between realty and per-
sonalty becomes material only when the proper law has been selected, and
of course only if that law happens to be a law which distinguishes realty
from personalty. In other words, the distinction between real and personal
property is immaterial for the purpose of the choice of the proper local
law, but may be a material aspect of the proper local law,when that law
has been chosen. In the case cited the succession of a person who had
died intestate, domiciled in Hungary, was in question in an English court,
'The distinction seems to be stated only in the comments appended to certain sections
(e. .q., §§ 47, z26A, 2zA), afid not in the text of any section.
"[i9z3] i Ch. i9z; cf. FALCONBRIDGE, op. cit. supra note 4, at 736-737.
In the Berchtold case the lex situs of the land happened to be the same as the lev fori.
Even in the more difficult case of a movable thing which is alleged to be immovable by
annexation or by its relation to land, and which is in fact removed to some country other
than that of the situs of the land, the English view appears to be that its character as
movable or immovable should be determined by the lex situs of the land. For example, a
Scotch heritable bond, though situated in England, has been held to be immovable because
the lex sitars of the land upon which it creates a charge so regards it. In re Fitzgerald,
Surman v. Fitzgerald, [19o4] i Ch. 573, 588; Di=Ca, op. cit. supra note 2, at 58o-581, notes
to his rule 149. It would be going too far afield to discuss here the question whether the
characterization of property by the lex situs is justifiable as an exception to the rule that
generally characterization is determined by the lex fori or by virtue of some different rule as
to characterization. i BAIRTIN, PRxNcrPEs DE DRoiT INTERNATIONAL PRIV-t (Paris, 1930) § 88,
at 236, admits characterization of property by the lex situs as the sole exception to the general
rule of characterization by the lex fori. NmoYrEr, MANUEL Dn DROrT INTERNATIONAL PaRIV
(Paris, 1928) §§ 418, 419 at 507 if., § 5o8 at 636, does not admit even this exception. As to
the general subject of characterization or qualification, much has been written in recent
years in various countries of continental Europe.
 UNIVERSITY OP PENNSYLVANIA LAW REVIEW

and one of the assets of the estate was the beneficial interest under the
will of the grandfather of the de cujus, by which freehold land in England
had been devised to English trustees upon trust to sell the land and pay
the proceeds to the father of the de cujus. The land being still in the hands
of the trustees, unsold, and the father of the de cujus having died intestate,
the question was whether English law or Hungarian law should govern
the distribution. It was held that the beneficial interest in the freehold
land must first be characterized as either immovable or movable, without
regard to the distinction between realty and personalty. Although the bene-
ficial interest would, by virtue of the doctrine of conversion, be considered
personalty if English law should be held to be the governing law, it was
nevertheless immovable for the purpose of conflict of laws.' 2 Hence, the
question being one of succession to immovables, the le% situs of the land
was the governing law. Therefore the property was to be distributed, as
personalty, among the next of kin according to English law, and not as realty.
If, on the other hand, the beneficial interest under the trust had been char-
acterized as movable by English law, the law of Hungary would have been
the governing law as to the distribution and the distinction between realty
and personalty would not have arisen for consideration.

II. PROPER LAW OF A CONTRACT

As regards the proper law of a contract only some observations on the

differences between English and American rules of conflict of laws will be
necessary for the purposes of the present article.

I. Conflict of Laws Restatement

By the terms of Sections 353, 354 and 355 of the Conflict of Laws
Restatement, the law of the place of contracting is declared to be the gov-
erning law with respect to the capacity to make a contract, the formalities
required for making a contract, and generally all matters of what is usually
called intrinsic or essential validity, including the "nature and extent of the
duty for the performance of which a party becomes bound (though not the
manner of performing that duty)." The reservation as to "the manner of
performing that duty" is amplified in Section 385, which provides that that
duty will be discharged by compliance with the law of the place of perform-
ance of the promise with respect to (a) the manner of performance, (b) the
time and locality of performance, (c) the person or persons by whom or
'-It would appear that Droperty must be characterized as movable or immovable in its
actual condition at the material time. If the land has been actually sold under a valid trust
for sale, the proceeds of the sale are movable prop~erty." it re Piercy, Whitwham v. Piercy,
[I89.] i Ch. 8.3. If under a trust to raise a sum of money the trustees may raise it without
selling or mortgaging immovable property, the beneficiary is entitled, not to an interest in
land, but merely to a chose in action which must be treated as possessing the character of a
movable. In re Anziani. Herbert v. Christopherson, [193o] i Ch. 407.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

to whom performance shall be made or rendered, (d) the sufficiency of per-

formance, and (e) the breach of the contract.

2. Some Comparisons
From the point of view of comparative law, several matters may be
at least noted.
The distinction drawn between the initiation and obligation of a con-
tract on the one hand and its performance on the other hand is of great
interest, though the application of the lex loci celebrationis to the former
and the lex loci solutionis to the latter must sometimes raise difficult ques-
tions as to the point at which initiation ends and performance begins or, in
other words, as to the extent to which performance can be regulated by
one law without in effect making a material change in the original obliga-
tion created under another law. 13 It is of course clear that to the extent
that performance of a contract is illegal by the law of the place of perform-
ance at the time for performance, there is no obligation to perform so long
as the illegality continues; 14 but it would appear that English courts reach
this conclusion, not by saying that the lex loci solutionis governs perform-
ance generally, but by saying that notwithstanding that the proper law of
the contract as a whole is English, English law will not render one of the
parties liable for not doing an act which cannot be lawfully done at the
place of performance, even though the act could have been lawfully done
if England had been the place of performance. 15 Thus, it would appear
that, generally speaking, when the proper law of a contract has been ascer-
tained by reference to the terms and circumstances of the contract at its
inception to be some law other than that of the place of performance, Eng-
lish law applies that proper law to such matters as excuses for non-perform-
ance or breach of the contract without regard to the law of the place of
performance, provided that the act of performance is not strictly illegal or
prohibited by the latter law.' 6 Similarly, the right to damages for breach

See the comments on §§ 353 and 385 of the RESTATEMENT; cf. Lorenzen, Validity and
Effects of Contracts im the Conflict of Laws (1920) 30 YALE L. J. 565, 654, (1921) 31 id.
53, 66 ff.
"Cf. CONFLICT OF LAws RESTATEmENT (Am. L. Inst. 1926) § 387.
'Ralli Brothers v. Compania Naviera Sota y Aznar, [1920] 2 K. B. 287. This case
is to be distinguished on the one hand (i) from a case in which, as in Robinson v. Bland,
2 Burr. lO77 (K. B. 176o), the proper law of a contract is English law because it is to be
entirely performed in England, though made elsewhere, and consequently the contract as a
whole is void because it is illegal, or based upon a consideration which is illegal, by that law;
and on the other hand (2) from a case in which, as in Foster v. Driscoll, [1929] I K. B.
47o, the proper law of a contract is English law, and the contract is to be partly performed
in England. but the contract is void in England because its object is to break the law of
another country.
"Jacobs, Marcus & Co. v. Credit Lyonnais, 13 Q. B. D. 589 (1884). There are some
reservations in the judgment in favor of the view that the parties to a contract might not
unreasonably be assumed to have intended that the "mode" of performance of that part
of the contract which was to be performed abroad was to be governed by the lex loci soin-
tionis, but the court refused to say that impossibility of performance by reason of an insur-
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

of contract would appear to be regarded as a creature of the law which

created the contract, so that the measure of damages is governed by the
17
proper law of the contract.
Again, under the Restatement the le: loci celebrationis is made appli-
cable to questions of the formal validity of a contract as well as to questions
of its intrinsic validity, and therefore so far as the Restatement is concerned
it is unnecessary to decide whether the lex loci celebrationis is to be applied
to formalities by virtue of its being the proper law of the contract or by
virtue of an independent rule, or, in other words whether Lorenzen is right
when he makes the following statement: 18
"Whenever the formalities of a legal transaction are regarded in
Anglo-American law as pertaining to the 'substance' of a legal trans-
action, instead of relating to 'procedure,' they are deemed to belong to
the operative facts which go to make up the validity of the legal trans-
action, and are governed by the law determining the validity of the legal
transaction in general. No special rules have been developed relating
to 'formalities' in general."

Presumably "Anglo-American law" in the foregoing quotation must

mean the common law as developed in the United States, and does not in-
dude the common law as developed in England or elsewhere in the British
Dominions. In any case it would appear to be reasonably clear that English
law has evolved a special rule as to formalities in general, 19 and this is still
important with regard to contract because by English law the proper law
of a contract may be different from the law of the place of contracting.
rection in the country in which part performance was to take place, and affording an excuse
for non-performance by the law of that country, was a valid excuse under a contract which
was held to be an English contract. FoomE op. cit. supra note 2, at 423 ff., 477, distinguishes
between the "mode, time and conditions" of performance (governed by the lex loci solutionis,
if the place of performance is expressly or impliedly agreed on) and the nature and inci-
dents of the contractual obligation, including its "unforeseen" incidents (governed by the
proper
17
law, which may be different from the lex loci solutionis).
Livesley v. E. Clemens Horst Co., [1924] Can. Sup. Ct. 6o5, [1925] I D. L. R. 159.
It is true that in this case the place of contracting and the place of performance were the
same (California), and the contest was between the law of that place (which was obviously
the proper law of the contract) and the lex fori (British Columbia), but it seems a fair
implication from the whole judgment of Duff J., in the Supreme Court of Canada that what-
ever law was ascertained to be the proper law of the contract as a whole at its inception
would be the governing law as to the measure of damages-inconsistently of course with
§ 396D of the RESTATEmENT. See also Canadian General Electric Co. v. Canadian Rubber
Co., [1915] 52 Can. Sup. Ct. 349.
' 8Lorenzen, The French Rules of the Conflict of Laws (1928) 38 YALE L. J. 165, 166.
The statement is repeated in substance in 6 RPERTOIUE DE DROIT INTERNATIONAL (Faris
1930) 317. The subject is discussed at length by Lorenzen in his earlier article, The
Validity of Wills. Deeds and Contracts as regards Forth in the Conflict of Laws, (i91i)
2o YALE L. J. 427.
' Formalities of making of a will of movables are by exception governed by the law
relating to succession to movables: and as to wills of movables, apart from Lord Kings-
down's Act, it is accurate in English law to say that formalities "are deemed to belong to
the operative facts which go to make up the legal transaction, and are governed by the law
determining the validity of the legal transaction in general." Similar observations would be
applicable to a will of immovables, governed as to both form and substance by the lex situs.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

Westlake states no modification of the rule that the formalities required for
a contract by the law of the place where it is made, the lex loci contractus
celebrati, are sufficient and necessary for its external validity in England,
except that a contract, although externally perfect according to that law,
cannot be enforced in England unless evidenced in such manner as English
law requires. 20 Even Dicey, who states several exceptions, begins his com-
ment on the main rule 21 by saying, "The one principle of English law with
regard to the law regulating the form of a contract, or the formalities in
accordance with which a contract is made, is that the form depends, both
affirmatively and negatively, upon the law of the country where the con-
tract is made." The exceptions stated by Dicey either are of so special a
character 22 or are so doubtfully expressed 23 that they merely serve to em-
phasize the general rule. Apart from the cases relating to contracts in the
ordinary sense, the English cases relating to the formalities of celebration
of marriage are clear in themselves, 24 and even though in some cases it is
difficult to say whether the question is one of formalities or one of capacity
or legality, 2 5 even in these cases the rule that the lexr loci celebrationis gov-
erns formalities is clear, and it would appear from the judgments that as a
matter of course the same rule applies to contracts.
Lastly, as to the intrinsic or essential validity of a contract, the lex loci
celebrationis,which is declared by the Restatement to be the governing law,
has, or has had, two formidable competitors in American case law, namely
the lex loci solstionis and the law intended by the parties. 28 Whatever may

" WEsTLAxE, op. cit. supra note 2, §§207, 208 and oog; see to the same effect, FooT,
op. cit. smpra note 2, at 388.
21Rule 59. The author's comment includes the quotation of WESTLAXE, op. cit. m1pra
note 2, §§ 207 and 209.
E
Exception I relates to a contract with regard to an immovable. Exception 4,relating
to an unstamped bill of exchange, is statutory.
' Exception 2, relating to a contract with regard to a movable, contains the words "may
possibly be invalid," and is rendered even more dubious by some possible confusion between
a contract as to a movable and the conveyance of a movable. As to a conveyance, the
formalities may be as essential a part of the transaction governed by the lex situs as any
other part of the transaction. See section iii, infra. Exception 3, relating to a contract made
in one country, but intended to operate wholly in. and to be subject to the law of, another
country, "may be valid," etc., merely reproduces a suggestion of NELSoN, PRIVATE INTER-
NATIONAxL LAW (i889) .257-8, not directly supported by any English authority.
2From Scrimshire v. Scrimshire, 2 Hagg. Con. 395 (Eng. 1752); and Dalrymple v.
Dalrymple, 2 Hagg. Con. 54 (Eng. 1811) ; to Berthiaume v. Dastous, [193o] A. C. 79, [193o]
I D. L. R. 849; and Nachimson v. Nachimson, [1930] P. 217.
-For example, Ogden v. Ogden, [i9o8] P. 46, and the cases there discussed. For a
review of these cases, see a report on conflict of laws relating to the formation and dis-
solution of marriage, prepared by me for the International Congress of Comparative Law
at The Hague, 1932, in part published under the title Conflict of Laws as to Nillity and
Divorce, [1932] 4 D. L. R. i, 9 ff.
" It would be beyond the scope of the present article to review the American cases,
even if I thought that I could usefully add anything to what has been already written on the
subject. See Beale, What Law Governs the Validity of a Contract (19o9) 23 HA. L. REV.
1, 79, 194, 260, concluding in favor of the lex loci celebrationis as sound theoretically, and
practical in operation; Lorenzen, supra. note 13, at 657 ff., 673, stating objections to the lex
loci celebrationis as an exclusive rule, and advocating the adoption of an alternative rule,
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

be said from the theoretical point of view, the Restatement rule has the prac-
tical advantage that the place of making of a contract is usually easy of
ascertainment. Occasionally the convenience of certainty may be offset by
some inconvenience and a total frustration of the intention of the parties,
in a case in which the place of making is purely casual or accidental, having
no substantial connection with the residence or place of business of the par-
ties or the object of the contract or the place of its performance; but it must
be admitted that the same objection would apply to the fairly rigid, but
widely accepted, rule that the lex loci celebrationis governs formal validity.
Again, while the exclusive application of the lex loci celebrationisto intrin-
sic validity may be a convenient and suitable rule to apply within the limits
of the United States, if it is generally adopted there as a rule of conflict of
laws, it is not so clearly a convenient or suitable rule to be applied to cases
of conflicts arising between a state of the United States and some other
country where a different rule of conflict of laws prevails and the contract
law of which may be substantially different.

3. English Rule
The 'English doctrine as to the selection of the proper law of a con-
tract is of course very different from the Restatement rule. It is more flex-
ible, less certain and far less easy to state.
The fashionable way of stating the English rule is that the proper law
of a contract is the law, or laws, by which the parties to a contract intended,
27
or may fairly be presumed to have intended, the contract to be governed,
and it must be admitted that this mode of expressing the doctrine of the
proper law finds some sanction in the words of Lord Mansfield 2s and in
the language of judges of the highest courts in more recent times. 29
As to the relative importance of the place of making, the place of per-
formance and other circumstances, for the purpose of ascertaining the
proper law of a contract, perhaps the passage most frequently cited in Eng-
lish judgments is the following: 8o
so as to combine certainty with elasticity; GooDaicH. CONFLICT oF LAWS (1927) 28 ff.;
Lorenzen in 6 R.PERToRE DE DROIT INTERNATIONAL (Paris, 1930) 313 ff. See also, from
the point of view of comparative law, A. Bagge, Les Conflits de Lois e Matiare de Contrats
de Vente de Biens Meubles Corporels (1928, V) 25 RECUEIL DES Couas, ACAmDmIE Dn DRoIT
INTMNRATIONAI, 125 (discussing the subject in its contractual aspects, including the trans-
fer of
2
the risk, but referring only incidentally to the transfer of the property in the goods).
DicEY, op. cit. supra note 2, rule 155.
2 Robinson v. Bland, supra note 15. This case is still the leading English authority
for the doctrine that if a contract made in one country is to be entirely performed in another
country, its validity is governed by the law of the place of performance. The result, namely,
to make English law applicable to a bill of exchange accepted in France, but payable in
England, was reached more easily because the bill was itself in English form.
' See, for example, Hamlyn & Co. v. Talisker Distillery, [i894] A. C. 202; Spurrier v.
LaCloche, [i9oz] A. C. 446.
SLloyd v. Guibert, L. R.'i Q. B. 115, 122 (1865), Willes J., delivering the judgment of
the Court of Exchequer Chamber. Cf. Jacobs, Marcus & Co. v. Credit Lyonnais, supra
note 16.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

"It is, however, generally agreed that the law of the place where
the contract is made, is prima facie that which the parties intended, or
ought to be presumed to have adopted as the footing upon which they
dealt, and that such law ought therefore to prevail in the absence of
circumstances indicating a different intention, as, for instance, that the
contract is to be entirely performed elsewhere, or that the subject-
matter is immovable property situate in another country, and so forth;
which latter, though sometimes treated as distinct rules, appear more
properly to be classed as exceptions to the more general one, by reason
of the circumstances indicating an intention to be bound by a law differ-
ent from that of the place where the contract is made; which intention
is inferred from the subject-matter and from the surrounding circum-
stances, so far as they are relevant to construe and determine the char-
acter of the contract."

This intention doctrine nevertheless "bristles with difficulties, theoret-

ical and practical", 31 and has been the subject of much criticism. 32 Perhaps
the gravest objection to the intention doctrine is that a proper law which is
identified with the law intended by the parties fails to perform the real
service that might be expected of any reasonably useful proper law. It is
about as useful as the corporation sole, 33 because just when it is sought to be
used in order to determine the intrinsic validity or non-validity of a contract,
it refuses to operate.
As regards interpretation or construction in a narrow sense there is no
difficulty about giving effect to any express or implied intention of the par-
ties, if it can be ascertained, even to the extent of incorporating in the con-
tract the law of some country with which the contract has otherwise no
connection; but when we are looking for a law by which to test the intrinsic
validity of a contract, to know whether it is legally binding or not, whether
it is or is not effective according to its terms, it is only within narrow limits
that we can admit the intention of the parties as the controlling element.
We might let the parties choose between the laws of two countries each of
which has some real connection with the contract, but we cannot let them
go far afield so as to make applicable the law of any foreign country which
happens to be favorable to their views as to the conditions of a valid con-
tract, and so as to substitute by a quasi-legislative act some foreign law for
the law which otherwise ought to govern the contract. Dicey, the most
enthusiastic exponent of the intention doctrine, is of course obliged to admit
that if the legality of the contract is in question, the arbitrary intention of
GoODRrCH, oP. cit. supra note 26, at 232.
'In addition to the articles by Beale, supra note 26; and Lorenzen, supra notes 13 and
I8; see FooTE, op. cit. supra note 2, at 397-8; WESTLARE, op. cit. supra note 2, observations
preceding § 212.
m Cf. the abeyance of the freehold when there was no parson, which caused Maitland
to say: "Thus, so it seems to me, our corporation sole refuses to perform just the first
service that we should require at the hands of any reasonably useful persona ficta." 3 MAIr-
LAND, CoL.CrED PAPERS (91H) 239.
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

the parties cannot be allowed to control the decision of the question, and so
he adds that the intention must be a "bona fide" one, and, having already
34
by definition identified the proper law with the law intended by the parties,
is driven to the desperate expedient of saying that the essential validity of
a contract is governed "indirectly" (whatever that means) by the proper
" West-
law, and to qualify even this by the addition of wide exceptions.
lake 36 rightly submits that if the legality of the contract is in question, either
the intention element is excluded or a fictitious intention is substituted for
the real intention, and states that "it may probably be said with truth that
the law by which to determine the intrinsic validity and effects of a con-
tract will be selected in England on substantial considerations, the prefer-
ence being given to the country with which the transaction has the most real
connection"." As Williston says, with regard to an analogous point, "it
seems unfortunate as a matter of terminology to put in the form of a fiction
matters which may be stated accurately". 38

4. Provinces of Canada
The foregoing observations as to the proper law of a contract have been
limited to the purpose of pointing out certain differences between the rules
prevailing in the United States and those prevailing in England or to the
purpose of furnishing a basis of comparison with the rules to be discussed
in the next section of this paper.
Inasmuch as English rules of conflict of laws prevail also in all those
provinces of Canada in which the law is based upon the common law of
England, it is not necessary here to lay stress on the fact that each province
of Canada is a separate "country" as regards the conflict of laws; 39 and
therefore I have, for the sake of simplicity of statement, spoken through-
out of "English" rules of conflict of laws, except when there appears to be
11 Whereas the proper law in its natural sense means the law which for any reason
is the governing law. SALMOND AND WINFIEmLD, LAW OF CONTRACTS (1927) 53o. The
editor of the latest edition of Dicay, op. cit. supra note 2, at 628, has apparently missed the
point of the objection to Dicey's definition of the proper law.
"See DIcEY, op. cit. supra note :, rules 15.5, 16o, 161, and app. note 22, "What is the
Law Determining the Essential Validity of a Contract?" The word "indirectly" formerly
appearing in rule 16o has been omitted as "needless" by the editor of the latest edition (pp.
965-966).
0Op. cit. supra note 2, . 212, and the notes preceding and following § 212.
"South African Breweries Co. v. King, [I899] 2 Ch. 173, aff'd, [19oo1 I Ch. 273.
"s2WILLSTON, CONTRACTS (1924) § 615, at ii89; Williston, Freedom of Contract (1921)
6 CoRN. L. Q. 365, reprinted in SELECTED READINGS ON THEn LAW OF CONTRACTS (1931) 00,
io6. A good recent example of a wholly fictitious intention used as a basis for the selection
of the proper law is The Torni, [1932] P. 27. The case of In re Missouri Steamship Co., 42
Ch. D. 321 (1889), there cited, may be usefully compared with Liverpool & G. W. Steam Co.
v. Phenix Insurance Co. 129 1. S. 397, 9 Sup. Ct. 469 (1889) (sub nora. The Montana in the
Missouri Steamship Co. case). See also Note (1932) 48 L. Q. REv. 6 referring to the
Adriatic, [i31] P. 241 (1931).
I See, especially, as to domicile in a particular province as distinguished from domicile
in Canada, Attorney-General for Alberta v. Cook, [1926] A. C. 444, [1926] 2 D. L. R. 762.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

some difference between the English rules and those prevailing in a Canadian
province.
Special mention must, however, be made of the province of Quebec.
Its law of property and civil rights, derived chiefly from French law, was
codified in 1866 under the title of the Civil Code of Lower Canada. This
code, unlike the French Civil Code, contains a comprehensive series of pro-
visions relating to the conflict of laws, of which Articles 7 and 8 are as fol-
lows: 40

7. Acts and deeds made and passed out of Lower Canada are valid,
if made according to the forms required by the law of the country
where they were passed or made.
8. Deeds are construed according to the laws of the country where
they were passed, unless there is some law to the contrary, or the par-
ties have agreed otherwise, or by the nature of the deed or from other
circumstances, it appears that the intention of the parties was to be
governed by the law of another place; in any of which cases, effect is
given to such law, or such intention expressed or presumed.

III. LAW GOVERNING THE CONVEYANCE OF A CHATTEL

I. General Rule
In accordance with the view generally adopted in other systems of con-
flict of laws, 4 ' the general rule would appear to be well established in Anglo-
American law that the transfer of the property in tangible movables or of
any less extensive real rights in them, or, more broadly, the creation, dis-

'As the official English version quoted in the text is neither artistic nor exact, the
French version is quoted here: "7. Les actes faits on passes hors du Bas Canada sont vala-
bles, si on y a suivi les formalit~s requises par les lois du lieu ofa is sont faits on pass6s."-
"8. Les actes s'interpr~tent et s'appr~cient suivant la loi du lieu oft ils sont pass6s, A moins
qu'il n'y ait quelque loi ce contraire, que les parties ne s'en soient exprim~es autrement,
ou que, de la nature de l'acte, ou des autres circonstances, il n'apparaisse que l'intention a
6t6 de s'en rawporter A la loi d'un autre lieu; auxquels cas il est donn6 effet a cette loi, ou i
cette intention exprimie ou prsum~e."
"The rule is clear in France. NiBoYET, op. cit. supra, note ii, § 506, at 6.33. Also in
Germany (where Wachter and Savigny exercised a dominating influence in favor of the
recognition of the lex sitlus as against the lex domicilii). Lewald (1930) 7 RtPERTOME DE
DRorr I=RNATio rAT, 367. The case of Italy is especially interesting, because the lex
situs is there applied to questions of property rights in movables, notwithstanding the am-
biguity of the relevant statutory text. Udina (193o) 6 RPPERronzE DR DROIT INT=RNATIOx.T,
508-509. In Quebec, art. 6 of the Civil Code of Lower Canada Provides, subject to certain
exceptions, that "movable property is governed by the law of the domicile of the owner,"
and it is impossible to say definitely how far this will prevent the courts of Quebec from
following the modem jurisprudence of France in favor of the application of the lex sitts.
Cf. LAFiLi, CONFLICr OF LAws (1898) 112, 123-124, where the question is very slightly
discussed. It has been held that the title to a stolen horse acquired by purchase in market
overt in Ireland is entitled to recognition in Scotland, notwithstanding that by Scottish law
a sale of a stolen horse in Scotland would not confer a good title; the vitium reale which is
indelible by Scottish law is purged by the sale in Ireland. Todd v. Armour, 9 Sess. Cas.
gai (Scot. 1882). So, there is no reason to doubt that a title validly acquired by purchase
in market overt in England or Ireland would be recognized in Ontario, notwithstanding that
the Ontario Sale of Goods Act provides that "the law relating to market overt shall not
apply to any sale of goods which takes place in Ontario." ONT. REV. STAT. (1927) c. 163,
§ 23.
 UNIVERSITY OP PENNSYLVANIA LAW REVIEW

memberment, or extinction of the property in tangible movables, is governed

by the lex situs. 42 The rule necessarily applies to any essential requirements
of the lex situs as to formalities of conveyance as well as to any questions
43
of the essential validity of the conveyance.
In England the rule has been clear since i86o. In 1858 there was pub-
lished the first edition of Westlake on Private InternationalLaw, of which
Chapter VIII (Movables) contained an exposition for English readers of the
views of Savigny and Foelix, and Westlake's own argument 44 in favor of
the application of the lez situs of the movable as against the lex domicilii
of the owner. In the same year (1858) the Court of Exchequer decided
the case of Cammell v. Sewell, 45 and its judgment was in 186o affirmed by
the Court of Exchequer Chamber. 40 The case was that of the sale of cer-
tain timber, the cargo of a ship which had been wrecked on the coast of
Norway. The sale of the timber in Norway by the master of the ship was
held to be valid in England because it was valid by Norwegian law.47 The
place in which the sale took place happened to be the same as the place in
which the goods were situated, and in some English cases the rule has been
stated that the transfer is governed by the law of the place of transfer, 48
but the rule approved by the Court of Exchequer Chamber in Cammell v.
Sewell is that a disposition made in accordance with the law of the place
where the goods are is binding everywhere, 49 and it seems clear that if the
place of transfer differs from the situs of the goods, it is the lez situs which
governs. 0
' The discussion is of course confined to transfer inter vivos by particular, as distin-
guished from universal, assignment.
I Cf. DiCEY, op. cit. supra note 2, exception to his rule 154. In the rule itself, stated
somewhat doubtfully, it is submitted that the author is unduly conservative, and fails to
recognize sufficiently the trend of the modern decisions in favor of the lex situs. Cf. GooD-
RICH. op. cit. suPra note 26. at 3.5o.
" It is interesting to compare this somewhat argumentative chapter with c. vii of the
more recent editions, in which the rule is stated as being settled. See also Foom, op. cit. mupra
note 2, 284 ff.
43 H. & N. 617 (Eng. i8.58).
405 H. & N. 728 (Eng. i86o). In the Court of Exchequer the judgment was based upon
the fact that the sale in Norway had been confirmed by the judgment of a Norwegian court,
but in the course of the argument Pollock. C. B. put the case simply on the ground of a sale
valid by the lex sitars and therefore valid elsewhere; and in the Court of Exchequer Chamber
this dictum of Pollock, C. B. was adopted as the ground of decision. Westlake's book was
cited in argument in the Exchequer Chamber, and we may conjecture that Westlake probably
exercised an important influence in favor of the lex situs as against the lex domicilii, but
the report of Cammell v. Sewell does not furnish us with precise evidence on this point.
"Although the contest was between the English consignees and the Norwegian buyer,
the timber had been shipped in Russia, upon a Prussian ship, and as pointed out by Cock-
bum, C. J., there was no evidence that the sale would have been invalid by either Russian
law or Prussian law.
" E. g. Kay, L. J., in Alcock v. Smith, [1892] r Ch. 238, 267. Cf. Vaughan Williams,
L. J.. in Embiricos v. Anglo-Austrian Bank, [19o5] i K. B. 677, 683.
" Cf. Maugham, J., In re Anziani, Herbert v. Christopherson, supra note 12, at 420: "I do
not think that anybody can doubt that with regard to the transfer of goods, the law applicable
must be the law of the country where the movable is situate. Business could not be carried on
if that were not so." See also Beale, Living Trusts of Movables in the Conflict of Laws
(1932) 4.5HRv.L. Ruv. 969, at 97o.
. Cf. FOOTE, op. cit. supra note 2, at 293, 294; DIcEY,op. cit. supra note 2, notes to his rule
I52, is to the same effect, notwithstanding that, somewhat oddly, he incorporates in his text
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

In the United States also it would seem to be clear that the modern
rule is that the law governing the creation and transfer of interests in tangi-
ble movables is the lex situs, notwithstanding occasional recognition of an
older view, approved by Story, that the governing law is the le: domicilii of
the owner."1
The Conflict of Laws Restatement (Proposed Final Draft No. 2) of
the American Law Institute provides in clear and unqualified terms that the
capacity to make a valid conveyance of a chattel (Sec. 275), the formalities
necessary for the validity of a conveyance of a chattel (Sec. 276), the valid-
ity in substance of a conveyance of a chattel (Sec. 277), and the nature of
the interest created by a conveyance of a chattel (Sec. 278), are all deter-
mined by the law of the state (place, Sec. 278) where the chattel is situated
at the time of the conveyance. It is not obvious why the general rule, thus
so clearly stated in its relation to chattels, should have been partially stated
in an earlier section (Sec. 233) in its relation to "a right in a thing which
exists in fact"-partially, because the comments appended to Section 233
contain a cross-reference to Sections 277 and 278 which would seem to indi-
cate that "validity and effect" in Section 233 correspond with "validity in
substance" (Sec. 277) and "nature of the interest created" (Sec. 278), and
are not intended to cover "capacity" (Sec. 275) or "formalities" (Sec. 276).
On the other hand, another comment, as well as two illustrations, appended
to Section 233, relate to capacity and would seem to indicate that "validity
and effect" in Section 233 include capacity to convey.

2. Change of Situs without Consent of Owner

The general conveyancing rule just stated involves as its ordinary con-
sequence that a title to a chattel acquired under the law of X, where the chat-
tel is situated, is entitled to recognition in Y, subject to any inconsistent rule
of public policy of Y, but that the title so acquired may be overridden by a
title validly acquired under the law of Y, after the removal of the chattel
2
to Y.5
Although it is established that as a general rule the lex situs of a chattel
governs all matters as to the conveyance of the chattel or of any real right
in it, troublesome questions arise as to possible exceptions to the general

a quotation from Kay. L. J. in Alcock v. Smith, supra note 48, and relegates to a footnote a
quotation from Cammell v. Sewell, supra note 46. See also the Ontario case of River Stave
Co. v. Sill, 12 Ont. R. 557 (i886) followed in Marthinson v. Patterson, 20 Ont. R. 125
(I89o), aif'd 1g Ont. App. 188 (1892) (both chattel mortgage cases).
ul GOODRICH. oP. cit. supra note 26, at 3 4.5 f., citing, inter alia, Green v. Van Buskirk,
5 Wall. 307 (U. S. i866), 7 Wall. 139 (U. S. 1868) ; for the lex situs as against the lex
domicilii, and Gillander v. Howell, 35 N. Y. 657 (I866), for the lex situs as against the lex
loci actits. See also 2 BEATI CASES 0N CONFLICr OF LAws (1902) 158, n. I (to Cammell v.
Sewell).
m See . iv. 2, 3. in the installment to be published next month.
 UNIVERSITY OP PENNSYLVANIA LAW REVIEW

rule,"3 and in particular the question whether any modification of the rule
should be recognized if a chattel is removed from one country to another
without the express or implied consent of the owner.
The sections already cited from the Restatement state no modification
of the general rule that the conveyance of a chattel is governed by the law of
the state where the chattel is situated at the time of the conveyance. Com-
ment (a) appended to Section 275 does, it is true, state that "a chattel is
situated in a state where it physically is, unless it is brought into the state
without the consent of the owner (see Section 52), or unless it is customarily
located outside the state and is only temporarily within the state (see Sec-
tion 54)"; but this comment is not literally supported by Sections 52 and
54. These sections do not purport to define the word "situated", or to alter
its natural meaning. They relate to the jurisdiction of a state over chattels,
and are part of a title relating to jurisdiction over things in general. Both
sections contain provisions which are presumably intended to modify Sec-
tions 275 to 278, though, with the exception of sub-section 3 of Section 52,
they are expressed in terms of jurisdiction, that is, they say what a state
may do or may not do in relation to a chattel, and they do not seem to be
very aptly phrased if they are intended to embody rules as to the choice of
the governing law. The arrangement of the Restatement is all the more
strange in this respect because when the rules of conflict of laws relating to
chattel mortgages and conditional sales are stated, and it becomes necessary
to provide for the case of a chattel removed from one state into another with-
out the consent of the owner or mortgagee, the appropriate provisions occur
in the chapter on property and not in the chapter on jurisdiction, and are
not expressed in terms of jurisdiction.5 4
In the earlier Tentative Draft Restatement No. 2, Section 52 appeared
in the following comparatively simple form: "If a chattel belonging to a per-
son who is not a citizen of or domiciled in the state, is brought into the state
without his consent, the state has no jurisdiction over his title to the chattel
until he has had a reasonable opportunity to remove it or until the period
of prescription in the state has run." By Section 43, "jurisdiction" means
53It is not intended to discuss the case of ships, or goods in course of transit. As West-
lake says in his comments on his § 150, it would be pedantic to apply the general doctrine so
as to bring in the law of a casual and temporary situs, not contemplated by either party in
the dealing under consideration. Goods in course of transit give rise to particularly difficult
problems the discussion of which is outside the scope of this article. The most recent attempt
to solve these problems is expressed in the draft of an international convention concerning con-
flict of laws relating to the transfer of property in goods under contracts of sale, prepared by a
committee of the International Law Association and discussed at the meeting of the Associa-
tion held at Oxford in August, 1932. Two classes of cases as to goods in transit have to be
considered, namely, (i)goods which are in transit from seller to buyer, pursuant to a contract
of sale, giving rise to the question what is the law governing the passing of the property under
that contract, and (2) goods which while they are in transit are the subject of a subsequent
transaction. Cf. Lewald, supra note 41, at 375, referring specially to NIsov-r, DES CoxFUrs
DE Lors RELArlFs A I'AcQuisrriol DE LA PRIopRAr r nEs DRoiTs SUR IMS MEUBLES COR-
PoRaEL (Paris, 1912) 55 f.
See § v, 3. in the installment to be published next month.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

the power of a state to create rights which under the principles of the com-
mon law will be recognized as valid in other states.
In the Proposed Final Draft No. i, Section 52 appears in a more elab-
orate form-the negation of the jurisdiction of the state to which the chattel
is removed without the owner's consent being further limited by specific
exceptions which are not material for the present purpose, and a provision
(subsec. 3) being added that "if by the law of the state from which the
chattel is taken title would pass as the result of a transaction in another
state, the title will pass though the chattel has been taken into the other state
without the consent of the owner."
In the commentaries accompanying Tentative Draft No. 2, it is said:
that Section 52 states a proposition of law which is not generally recog-
nized and is not supported by a great weight of authority, 5 and that some
of the advisers have serious doubts as to the correctness of the section as
a statement of present law. In the annotated edition of Tentative Drafts
Nos. I, 2 and 3 published by the Michigan State Bar Association it is said
that Section 52 represents the opinion of a considerable majority of the advis-
ers, though some of them dissent from it, and that though the section is not
supported by a great weight of authority, there is no authority against it."6
The great persuasive authority of Beale can be invoked in favor of both
the general principle of Section 52 and the expression of that principle in
terms of jurisdiction. 57 The case of Edgerly v. Bush,51 apparently is, he
says, the only direct authority for the proposition that if A is owner under
the law of state X of a chattel situated there, and the chattel is taken to state
Y without the express or implied consent of the owner, state Y has no juris-
tion to divest the owner's title in favor of a purchaser or mortgagee there.
In the case mentioned the plaintiff, a mortgagee, had a good title to a span
of horses by the law of New York. The horses were then taken by the
mortgagor to the province of Quebec, without the consent of the plaintiff
and in breach of the contract between the parties. They were subsequently
sold in Quebec by a "regular trader, dealing in horses" to a purchaser in good
faith and without notice, and later were resold to the defendant. In an
action brought in New York for conversion, it was held that if the law of
0 The decisions which are, cited as involving the principle of § 52 are Edgerly v. Bush,
8i N. Y. i99 (188o), and Taylor v. Boardman, 25 Vt. 581 (1853) and reference is made to the
language of Cockburn, C. J. in Cammell v. Sewell, supra note 46, at 735, in argument: "If a
person sends goods to a foreign country it may well be that he is bound by the law of that
country; but here the goods were wrecked on the coast of Norway, and came there without
the owner's assent. Could the arrival of the goods there enlarge the captain's authority?"
See, however, to the contrary, the language of Crompton, J. (delivering the judgment of the
majority of the court, in which Cockburn, C. J. concurred).
0 It is added, however, that the principle stated in § 52 is inconsistent with the result of
the decision in Bovdson v. Goodrich, 49 Mich. 65 (1882).
7Beale, Jurisdiction over Title of Absent Owner in a Chattel (1927) 40 HARv. L. REv.
8o5; cf. Note (191i) 24 HARv. L. REV. 567.
I Supra note 55. I have stated the proposition broadly in my own words, without
mentioning the exceptions contained in § 52.
 UNIVERSITY OP PENNSYLVANIA LAW REVIEW

Quebec were the governing law the defendant would have a good title,5
but that effect would not be given in New York to the law of Quebec so as
to divest a title lawfully acquired and held under the law of New York, in a
case in which the chattels had been removed to Quebec without the consent
and against the will of the owner. "We doubt," said the court, "whether
.it has ever been adjudged that such title has been divested by the sur-
reptitious removal of the thing into another State, and a sale of it there
under different laws." 60
Beale further says that "the only authority which could control this
question would be a decision of a court of a third state refusing to give
effect to legal rights acquired under a rule like the Texas rule".6 1 If in
Edgerly v. Bush the horses, after being sold in Quebec, had been taken to
Maine, and a court of Maine had refused to recognize the divesting effect of
the Quebec transaction upon the New York title, we should of course have
a disinterested 6 2 authoritative statement of the Maine view as to the true
conflict of laws rule on the question now under discussion, but, after all, we
should still have only the view of the court of one state on a highly debate-
able question.
The doctrine which underlies the particular form of statement contained
in Section 52, (that is, the lack of jurisdiction or power of a State to affect
or divest a title validly created under the law of some other State which in
the circumstances is regarded as being the sole law governing the title)
has been the subject of some criticism. 3 If valid, the doctrine seems to
involve some possible consequences peculiar to the constitutional law of the
United States.64 Upon all this I do not venture to express any opinion.
It is of course another question whether the principle of Section 52,
regardless of its particular mode of expression, is socially desirable, that is,
whether the rule that the lex situs governs the conveyance of a chattel ought
to be qualified in the case of a chattel which has been taken from one coun-
try to another without the owner's consent, and dealt with in the latter
country.6 5

'As to the effect of art. 1489 of the Civil Code of Lower' Canada, in question in Edgerly
v. Bush, supra note 55, see McKenna v. Prieur and Hope, 56 Ont. L. R. 389 (1924), [1925]
2 D. L. R. 46o, in § iv, 3,of the installment to be published next month, from which it appears
that the sale by the trader in Quebec would not convey to the purchaser any proprietary right
as against the true owner. Under art. 148Z "the sale of a thing which does not belong to the
seller is null, subject to the exceptions declared in the three next following articles."
10At 2o5. I have omitted some other grounds of decision mentioned in the judgment,
all eliminated as untenable by Beale in the article cited supra note 57.
' Texas is apparently the happy hunting ground of dishonest sellers of other men's
chattels and of "willing bona fide buyers." See, e. g., Consolidated Garage Co. v. Chambers,
iii Tex. 293, 231 S. W. 1072 (1921).
S"Disinterested" is merely figurative. It is not meant to be suggested that a court
would mould its rules of conflict of laws so as to protect unduly a title originating in its own
state.
See especially Comment (1928) 37 YA LE L. J. 966, and the articles there cited.
'Note (1928) 41 HARV. L. Ray. 770; Comment, supra note 63 at 969-971.
The desirability of some qualification of the rule seems to be approved in the articles
already cited. See Beale, supra note 57, at 8o; and Comment, supra note 63, at 971. GooD-
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

The question may be regarded as the conflict of laws phase of the

ancient question upon which different systems of local laws have taken dif-
ferent views, namely, where the line is to be drawn between the protection
of the interest of an owner out of possession and the protection of the inter-
est of an innocent purchaser from the possessor.6 6 If the desirability of the
proposed qualification of the conveyancing rule in the conflict of laws is
tested by reference to the policy of the common law with regard to local
transactions not involving any foreign element, the proposed qualification
may be said to be in accord with the traditional policy of the common law
to protect the owner rather than the innocent purchaser,0 7 as contrasted with
the policy of the civil law to protect the purchaser rather than the owner.
It may be remarked, however, that the pronounced tendency of modern
English legislation has been to extend the cases in which protection is given
to the innocent purchaser at the expense of the owner, 8 and in the United
States and Canada the general object of chattel mortgage and conditional
sale legislation is to give to an innocent purchaser a larger measure of pro-
tection than the common law gave him. Some of the cases, not yet remedied
by legislation, in which title rather than purchase is still protected by the
common law, are hard to justify on principle, as contrasted with other cases
in which purchase is protected rather than title."'
Even if, as is not certain, there appears to be some balance of con-
venience or justice in favor of the principle of Section 52 of the Restate-
ment, the benefit of the principle depends to some extent on its being gen-
erally adopted as a rule of conflict of laws. Within the limits of the United
States the condition of the benefit may in time be fulfilled by the general
acceptance of the Restatement in the United States, but it is unlikely to be
fulfilled as between a state of the United States and some other country.
On the contrary, if the principle is not adopted in other countries, it would
appear that the result of its adoption in the United States will be to accen-
tuate the difference between the rules of conflict of laws prevailing in the
United States and those prevailing elsewhere.
The extreme case of removal without the owner's consent is the case
of a stolen chattel, and the question might be put in this form: If a chattel
RrcH, op. cit. supra note 26, at 351-353, mentions some analogies pro and con, and is inclined
to doubt the existence of the suggested exception to full control by the law of the situs, but
expresses no opinion as to its desirability.
'See, e. g., Franklin, Security of Acquisition and of Transaction: La Possession vaut
Titre and Bona Fide Purchase (1932) 6 Tu.AN L. RFv. 589.
As expressed bluntly, but too broadly in Edgerly v. Bush; supra note 55, at 204 "Our
policy has been, and is, to protect the right of ownership, and to leave the buyer to take
care that he gets a good title."
"See the successive Factors Acts of 1823, 1825, I842, 1877 and 1889; the Sale of Goods
Act, 1893, 56 & 57 Vicr. c. 71, § 25 (1893). The Factors Act, 1889, 52 & 53 VIcr. c. 45
(1889) and the Sale of Goods Act have been re-enacted in all the common law provinces of
Canada.
0 Cf. Franklin, supra note 66. at .594-.q95.
 UNIVERSITY OF PENNSYLVANIA LAW REVIEW

were sold in market overt in England, would it make any difference to the
validity of the buyer's title that the chattel had been stolen by the seller
in Scotland or France? If not, a fortiori,if a sale is made in England by a
person who is in possession of a chattel with the owner's consent, and in
such circumstances that by English law he can give a good title as against
the owner to a third party, it would make no difference that the chattel had
been removed to England without the owner's consent. In any event the
question is of course not merely whether the sale is valid in England, but
whether the sale in England is entitled to recognition elsewhere.
While the question does not seem to have been specifically discussed in
the English and Canadian cases, it seems to have been taken for granted
that the validity of a conveyance by the lex situs is not affected by the fact
that the chattel has been taken to the place of transfer without the consent
of the owner. The leading case of Cammell v. Sewell,7" already cited, is
perhaps not conclusive on this point, because there the master of the ship,
though not of course authorized to wreck the ship in Norwegian territorial
waters and to sell the cargo there, did have authority to take the ship and
cargo from the port of shipment in Russia to the port of destination in
England, and the possibility that the ship might be wrecked in Norwegian
waters and that the cargo might consequently be landed in Norway and there
sold in accordance with Norwegian law might be considered as one of the
risks which the owners must have assumed. However that may be, Cromp-
ton, J., delivering the judgment of the majority of the Court of Exchequer
Chamber, said, "And we do not think that it makes any difference that the
goods were wrecked, and not intended to be sent to the country where they
were sold. We do not think that the goods which were wrecked here would,
on that account, be the less liable to our laws as to market overt, or as to
the landlord's right of distress, because the owners did not foresee that they
would come to England." 71
We have in the English case of Embiricos v. Anglo-Austrian Bank 72
the extreme case of a cheque drawn by a Roumanian bank in Roumania
upon an English bank, stolen in Roumania, taken to Austria by the thief,
and there cashed by a bank in good faith and without gross negligence so as
to confer a good title by Austrian law upon the cashing bank. It was held
by the Court of Appeal that the title so acquired was entitled to recognition
in England. In other words, the court held that the rule that the validity
of the transfer of a chattel is governed by the le%situs 73 applies to the trans-
'
Supra note 46.
-Supra note 46, at 744-745. In a Nova Scotia chattel mortgage case, Singer Sewing
Machine Co. v. McLeod, 2o Nova Scotia L. R. 341, 344 (1888), there is an obiter dictum that
if the chattel is removed to another country without the owner's consent, the title will not be
affected
7'
by subsequent dealings there.
Snpra note 48.
"Stated in one passage in the judgment as "the law of the place where the transfer
takes place." The looseness of this expression is immaterial in the particular circumstances,
the place of transfer of the cheque being necessarily the same as the situs.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

fer of a cheque, and no difficulty was made on the ground that the cheque
had been taken to the place of transfer without the consent of the owner.
Again, in the Ontario case of McKenna v. Prieurand Hope U a motor
car was stolen in Rhode Island, and after adventures of which we have no
record was the subject of a contract of sale in the province of Quebec and
was subsequently delivered to the buyer in the province of Ontario and there
resold by him. The Ontario court discussed the effect of the Quebec trans-
action,7m and while it was assumed that by the law of Rhode Island, as by
the law of Ontario, a thief cannot give a good title, there was no suggestion
that the law of either Rhode Island or Ontario could be applied if it should
appear that the Quebec buyer got a good title by the law of Quebec.
It would appear that in France the lex situs will be applied to determine
the property in movables actually situated in France, without regard to the
reasons why they are so situated, whether as the result of force majeure or
without the consent of the owner or otherwise.
0 So, also in Germany. 7T

3. Renvoi
The disturbing effect of the doctrine of the renvoi has hitherto been
less felt in the United States than in England and other countries. Whereas
on the continent of Europe the doctrine has become one of capital impor-
tance, the pros and cons of which are vigorously discussed in every modern
treatise on private international law,78 the only case in which the renvoi has
been specifically discussed in the United States was decided adversely to the
application of the doctrine to succession to movables, 7 9 and, in accordance
with what appears to be the dominant opinion of writers on conflict of laws
in the United States,80 the American Law Institute, in its Conflict of Laws
Restatement, has pronounced against the acceptance of the doctrine except
in certain limited cases."'
The problem, stated in the broadest terms, is this: 82 "When the con-
flict of laws rule of the forum refers a jural matter to a foreign law for
" Supra note 59.
7- To be further discussed in § iv, 3, in the installment to be published next month.
"NIBoYr, op. cit. supra note II, § 509, at 637; Lorenzen, supra note I8, at 173.
'2 FRANcENSTEIN, op. cit. supra note 8, at 42, par. (b) ; Lewald, supra note 41, at 369,
§ 2 For modern special studies of the subject, see Lewald, La Th orie
due Renvoi (1929,
iv) 29 RECJEM DES COURs, AcAD MiE DRDaorr INTERATIONAI, 515-620; Lucas, Doctrine dut
Renvoi (ig3i) 10 R PERTOIR DE DR01= INMRNATIONA , 412-435.
IDRe Tallmadge, Re Chadwick's Will, iog Misc. 696, 181 N. Y. Supp. 336 (1919); cf.
(1919) 29 YALE L. . 214 (igig) I9 Co1. L. REV. 496; (1920) 36 L. Q. REV. 91.
so See Lorenzen, The Renvoi Theory and the Application of ForeignLaw (1919) 19 CoT.
L. REv. 19o, 127; Lorenzen, The Renvoi Doctrine in the Conflict of Laws-mneaning of "The
Law of a Country" (1918) 27 YALE L. J. 509, with bibliography; Schreiber, The Doctrine
of the Renvoi it Anglo-American Law (1918) 31 HAV. L. REV. 523; G.ODRICHI: op. cit. supra
note 26. at :23-25.
"'The general rule is stated in § 7 of the RESTATEMENT, and the exceptional cases, to be
further mentioned below, are dealt with in § 8.
Quoted by GOODRICH, op. cit. supra note 26, at 24, from the Schreiber article, supra
note So, at 525.
 UNIVERSITY OP PENNSYLVANIA LAW REVIEW

decision, is the reference to the corresponding rule of the conflict of laws of

that foreign law, or is the reference to the purely internal rules of law of the
foreign system, that is, to the totality of the foreign law, minus its conflict
of laws rules?"
I have elsewhere submitted, with especial reference to succession to
movables on death, that the supposed authorities in favor of the renvoi in
English law are, to say the least, singularly weak, and that any advantages
which are supposed to result from the application of the doctrine either dis-
appear on examination or are outweighed by the disadvantages,83 and that
any statutory rule of conflict of laws, such as is contained in Lord Kings-
down's Act "' or the Bills of Exchange Act 85 should be construed as a ref-
erence to the local law of a given country. In the case of marital status, the
Conflict of Laws Restatement,8 goes, in my opinion,8 7 further in the direc-
tion of recognizing the doctrine of the renvoi than the English cases go or
are likely to go.
In the case of title to land, also, the Restatement (Sec. 8) recognizes the
doctrine of the renvoi, in the sense that a court determines the existence of
the title to land situated in another country as its existence would be deter-
mined on the same facts by a court of the country of the situs; s and the
comment which follows Section 8 indicates that the propriety of the rule is
obvious.
On the other hand, the Restatement (Sec. 7) rejects the renvoi in the
case of title to a tangible movable and in other cases not falling within
Section 8; and, to say the least, the practical necessity which exists in the
case of land, of submitting to whatever may be laid down by the le% situ'
and whatever may be decided by the courts of the situs, does not always
exist in the case of a thing which by its nature may be removed to another
situs.8 9
It might indeed be argued that the admission of the renvoi as regards
title to land is a logical consequence of the rule that the characterization of
property as immovable or movable should be made by the lez situs. ° So,

6' FA.COxBRmIGE, Renvoi and Succession to Movables (X93o) 46 L. Q. REV. 465-485,

(1931) 47 L. Q. REv. 271-293, with additions and changes, republished in [I932] I D. L. R.
1-47, and in a French translation, sub. tit. Renzoi et Succession Mobilijre (1932) 26 REuVE
DE DRorr INTERNATIONAL PRIV§, 254-278, 451-479.
(1930) 46 L. Q. RFv. at 482, [1932] I D. L. R. 19, 53.
FALCoNBRIDGE, BANKING AND BiLLs OF EXCHANGE (4th ed. 1929) 822.
Section 8, which was not limited to "marital" status prior to the Proposed Final Draft.
8 See Falconbridge, sapra note 25, at 44 ff. as to the renvoi.
This is the result of .48 of the REsTATENT, read along with §§ 236 ff.
Lorenzen, stpra note So, 27 YALE L. J. at 531, expresses the opinion that by way
of exception the application of the renvoi to the conveyance of immovable property is justified,
because of the permanent and exclusive physical control which a state has over all immovable
property within its territory, which it does not possess with reference to movable property or
persons, and because of the reasonable basis which exists for the expectation that the
adoption of the renvoi doctrine would promote international uniformity of decision as to
conveyance of immovable property.
'* See supra note II ; FALCoNBRIDGE, op. cit. supra note 4, at 740-741.
 CONTRACT AND CONVEYANCE IN CONFLICT OF LAWS

by analogy, it might be argued that the admission of the renvoi as regards

title to land is logically in accord with the accepted doctrine as to the effect
of a judgment in rem of a court of the situs. The arguments would, how-
ever, prove too much, because the same reasoning would lead to the admis-
sion of the renvoi as regards title to tangible movables. If we fall back on
the argument based upon the practical necessity which in the case of land
compels a court to determine the existence of the title as a court of the coun-
try of the situs would determine it.on the same facts, we cannot say broadly
that the same practical necessity is absent in all cases of title to tangible mov-
ables. The situs of the land never changes, and the practical necessity always
exists, whereas the situs of a movable may change and the practical neces-
sity may or may not exist. In other words, as regards movables we may
have to draw a distinction between a case in which the foreign lex situs which
is in question is the law of the present actual situs and a case in which it
is merely the law of a former situs. For example, if the question of the
title to a chattel arises in a court of Y and the chattel is actually situated in
X, it would seem that the court of Y must determine the title as it would be
determined by a court of X; but if the chattel was in X when it is alleged
that a title was acquired under the law of X, but is now in Y or in Z, and
a court of Y has to apply the law of X in order to adjudicate upon the prop-
erty effect of the transaction which took place when the chattel was situated
in X, there is no practical necessity compelling the court of Y to do anything
but apply its own rules of conflict of laws in the light of the local law of X.9'
It may be further remarked that whereas the title to land situated in
one country will rarely have to be determined by a court of another coun-
try,92 it may more frequently happen that a court has to determine the title
to a chattel which is, or was, situated in another country.
As regards the contractual effects of a transaction relating to a chattel,
it hardly seems open to doubt that when the conflict of laws rule of one
country refers to the law of another country as the proper law, the reference
ought to be to the local law of that country without regard to its rules of
conflict of laws.
(Editor's Note: Part II, conchuding this article, will appear in the May issue.)

mCammell v. Sewell, supra note 45, is consistent with this suggestion. One of the
expert witnesses (3 H. & N. at 626-629) gave as his opinion that the sale of the cargo situate
in Norway was valid by [local] Norwegian law, but that the rules of Norwegian law ought
not to be applied to the case of a Prussidn ship coming from a Prussian [sic, read Russian]
port to England and wrecked upon the coast of Norway. The case is not decisive, because no
notice was taken of this point in the judgments and it is not clear what the opinion of the
other witnesses was on the point.
" The English rule is that a court will not exercise jurisdiction in a case which directly
requires an adjudication upon the title to foreign land or in which the cause of action
involves an adjudication upon the title. British South Africa Co. v. Companhia de Moeam-
bique, [1893] A. C. 6o2. See also the recent judgment of the Supreme Court of Canada in
Duke v. Andler, [ig3z] Sul). Ct. Can. 734, [I932] 4 D. L. R. 529.