TRANSFER OF TANGIBLE MOVABLES

This chapter is concerned with transfer of movables which is often called particular assignment
of movables, as distinguished from general assignment, such as devolution of property on the
death of a person i.e., succession, or distribution of assets in bankruptcy. Transfer of tangible
movables, or particular assignment of movable, means transfers inter vivos, such as sale, gift,
pledge.

While there appears to be almost a universal acceptance of the principle that the lex situs governs
all or almost all matters relating to immovables, there is no such acceptance of any one principles
relating to movables, tangibles and intangibles. In fact at the outset of our enquiry we are
confronted with conflicting theories ad confusing judicial pronouncements, from which it is well
nigh impossible to deduce anything. The vital question is whether one system of law should be
allowed to determine all questions that arise in respect of movables or whether different laws
should apply to different aspects of transfer such as to assignability of movables, to formal
validity, to material validity, to priorities etc.

THEORIES

There exist as many as four theories i.e., the lex domicilii, the lex situs, the lex loci actus and the
theory of proper law of transfer. The oldest of these theories is that of lex domicilii and newest, it
seems is the proper law theory.

The domicile theory:

This is the oldest theory. The argument has been: the movables have no fixed situs; their situs
can be shifted at any time by its owner. Therefore, the medieval Italian statutists propounded the
principle of mobile sequuntur personam. This doctrine had wide acceptance not merely on the
continent of Europe but also in England and the United States. Judicially, it was accepted in
several cases between 1750 -1830. In Sill v. Worswick Lord Loughborough said, “with respect to
the disposition of it, with respect to the transmission of it either by succession or the act of the
party, it follows the law of the person”. Originally this principle was applied to the universal
assignment and it seems, judges and jurists without giving much though to it.

The lex actus theory

The lex actus or lex loci actus theory is also a rejected theory in our contemporary world, though
judicially it has been advocated in some cases and there are some writers who also advocate it. In
Alcock v. Smith, it was observed that as to personal chattels, it is settled that the validity of a
transfer depends, not only upon the law of the domicile of the owner but upon the law of the
country in which transfer takes place. Most of the writers of private international law have
criticised this theory. Cheshire says that the mere fact that a transaction is completed in a
particular place is no adequate reason for admitting the control of the local law.

The lex situs

Lex situs is the most favoured theory. The theory that the validity of an assignment of movables
which can be touched is governed by the law of the contract in which they are situated, has the
great advantage of being a single and exclusive system that, possessing effective control over the
subject matter of the suit, can act as an independent arbiter of conflicting claims. Moreover, its
right of control satisfies the explanations of the reasonable man for a party to a transfer naturally
concludes that the transaction will be subject to the law of the country in which the subject
matter is as at present situated.

In Re Anzimani, Maugham J said “I do think 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.

The proper law theory (Lex actus)

Cheshire while propounding the theory of proper law states “the law that may be chosen to
govern questions arising out of the transfer of movables is the law of the country with which the
transfer has the most real connection or more shortly, the lex actus i.e., the proper law of the
transfer, analogous to the proper law of the contract”. The ascertainment of the proper law would
not present any difficulty, if the proper law and the lex situs is the same. But the difficult case
will be where it is not so.