Pearson J held that the intention of the parties was that the property in the goods should pass on shipment and that there was no such prior appropriation of the goods and assent thereto as would pass ownership by virtue of s 18 SGA, Rule 5. He stated that: ‘To constitute an appropriation of the goods to the contract, the parties must have had, or be reasonably supposed to have had, an intention to attach the contract irrevocably to the goods, so that those goods and no others are the subject of the sale and become the property of the buyer.’

A bidder, falsely calling himself Mr King, bought several vehicles at auction. The auctioneer allowed him to take the vehicles upon receipt of his cheque, which later turned out to be worthless. ‘King’ also agreed that the property in the vehicles would not pass to him until his cheque had been honoured. He then sold one of the vehicles to the third party, who in turn sold it to D. The auctioneer sought to recover from D the vehicle or its value.

The court considered whether property in the vehicle had passed to the purchaser. Hallet J quoted s 18, Rule 1 and stated that ‘upon the fall of the hammer the property of this car passed to King unless that prima facie rule is excluded from applying because of a different intention appearing or because there was some condition in the contract which prevented the rule from applying. In my view, this was clearly an unconditional contract of sale, and I can see nothing whatever to make a different intention appear.’ Accordingly, the property in the vehicles had passed to King when the hammer fell.

The London Wine Company (LWC) was a company dealing in wines. It ran a scheme whereby customers could purchase quantities of wine for investment. Customers bought wine which remained in LWC’s warehouse in bulk. The purchases would be entered in LWC’s stock book and allocated an identification number. LWC provided the customers with documents of title confirming them to be the sole owners of the wine purchased. One customer bought LWC’s entire stock of a particular wine. In other instances, a number of contracts were made with different buyers exhausting LWC’s stock of a particular wine. In each case, LWC issued the customers with a document confirming that they were the sole owners of the wine they had purchased. LWC subsequently went into receivership.

As there were several purchasers of the same kind of wine, it was impossible to determine who owned which wine held by LWC. Even had there been just one customer, it was still impossible to attach specific bottles of wine to that customer’s contract. LWC, had it wished, could have purchased further stock for the customers. Oliver J held that, in these cases, there was no appropriation of the wines and therefore no property in the wine passed to the customers. This case illustrates that no appropriation can take place unless there is an intention to attach specific goods irrevocably to the contract.

W purchased 1,000 tons of wheat that was then loaded onto a ship for delivery. The following day, he sold 500 tons of the bulk to a sub-purchaser (X), who paid W for the goods. By the date the ship docked, W had been declared bankrupt and his trustee in bankruptcy claimed the entire consignment of 1,000 tons.

The Court of Appeal held that W’s trustee in bankruptcy was entitled to succeed and that X was entitled to nothing, even though he had already paid W for his 500 tons. As X’s 500 tons had not been ascertained (i.e. separated from the 1,000 tons bulk and identified as the goods to be used in the performance of the contract), property did not pass to him. Such facts would now be decided differently because of s 20A SGA.