Since a man cannot transfer what is not his, a sale of property to be subsequently acquired by the vendor is ordinarily given effect only as a contract to sell such goods after they have been acquired. Such a bargain, under the law of sales, is not self-operating to pass the property in future goods to the purchaser on their mere acquisition by the seller, but requires a subsequent act of performance by the seller assented to by the buyer to carry out the obligation, usually termed a subsequent act of appropriation. The most important exception to this rule is the doctrine of equitable mortgages first discussed in the important English case of Holroyd v. Marshall decided by the House of Lords in, 1861. The doctrine, briefly stated, lays down the rule that, although a mortgage of property to be subsequently acquired by the mortgagor is void at law, it is given effect in equity as an implied contract to pledge such property as security when the mortgagor acquires it, so that an equitable mortgage attaches to such property when so acquired in accordance with the doctrine of equitable mortgages. The rule is usually said to rest upon the broader equitable basis of specific performance so that when the property is later acquired by the debtor the creditor's equitable lien at once attaches.
Frank C. Latcham,
Mortgages of Personal Property to Be Subsequently Acquired,
19 Wash. L. Rev. & St. B.J.
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