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It is a c0mm0nplace that, within c0mmercial law, the law 0f pers0nal pr0perty is particularly
imp0rtant, and it is als0 0bvi0us that c0mmercial law deals t0 a large extent with cr0ss-b0rder
transacti0ns and business relati0nships. This article gives an 0verview 0f German m0veable
pr0perty law, since s0me kn0wledge 0f m0veable (pers0nal) pr0perty law 0f a f0reign maj0r
Eur0pean jurisdicti0n is valuable t0 trade and c0mmerce as well as t0 c0mparative studies.
H0wever, there d0es n0t seem t0 be a c0ncise syn0psis 0f this area available t0 the English lawyer,
and this article wants t0 remedy this situati0n. Alth0ugh the f0ll0wing acc0unt is n0t m0re than a
slightly extended 0utline, it tries t0 c0ver all relevant and interrelated t0pics, fr0m the law 0f
p0ssessi0n t0 the vari0us types 0f security rights in German law.
Apart fr0m seeking t0 pr0vide a c0ncise but fairly c0mprehensive descripti0n 0f German m0veable
pr0perty law, this article 0ffers an analysis 0f this area 0f German law fr0m an English lawC0mm0n law perspective 0r at least f0r readers primarily familiar with English law. H0wever, the
meth0d used is n0t t0 find a c0mm0n c0re 0f b0th legal systems 0n a functi0nal basis which is
then expl0red, n0r is the task appr0ached with a presumpti0 similitudinis in mind 1. Acc0rdingly,
the exp0siti0n 0f German law is n0t "anglicised" n0r adapted t0 the C0mm0n law in s0me f0rm,
but sets 0ut the structure and 0rganisati0n 0f German pr0perty law as these appear in German
textb00ks, in the way in which it is taught, learned and in the minds 0f th0se using and devel0ping
legal d0ctrine. This will familiarise English c0mm0n lawyers with the very different legal culture 0f
German private law2. 0ne w0uld n0t learn French spelling by 0mitting the perhaps c0nfusing
accents and by rendering (0riginally) French w0rds in an English spelling, t0 make it "easier" f0r
the English beginner and t0 underline a "c0mm0n c0re" 0f these tw0 languages. The same sh0uld
apply t0 the learning 0f new - s0metimes quite alien - laws.
Alth0ugh this article c0ncentrates 0n German m0veable pr0perty law, it als0 draws c0mparis0ns
with the relevant areas in English pers0nal pr0perty law. H0wever, s0me familiarity with English
pers0nal pr0perty law is presumed3 and the emphasis in the English law secti0ns is 0n highlighting
c0ntrasts and 0ccasi0nal similarities, n0t 0n c0mprehensiveness. The article will rarely ever t0uch
up0n imm0veable pr0perty law, which is mainly f0r reas0ns 0f space. English lawyers are
accust0med t0 this separati0n because they perceive real pr0perty law and pers0nal pr0perty law
as quite different entities and teach these areas independently, but that is actually n0t the
appr0ach taken in German law. German law has a unitary appr0ach t0 pr0perty law, whereby
imm0veable pr0perty and m0veable pr0perty f0ll0w the same rules in principle. Theref0re, the
general c0ncepts 0f pr0perty, pr0perty rights and 0wnership in German law, which will be
discussed in the first secti0ns 0f the article, apply t0 land and m0veable pr0perty alike.
There is an0ther purp0se 0f this c0mparative analysis. Pers0nal/m0veable pr0perty law is a g00d
example 0f the inc0mpatibility 0f different legal cultures in Eur0pe. While the law 0f c0ntract by its
nature is m0re sympathetic t0 the impressi0n 0f a str0ng resemblance 0f rules in different
jurisdicti0ns, because the underlying idea 0f a c0ntract is an agreement which invariably requires
s0me br0ad c0mm0n understanding as t0 its c0nceptual f0undati0ns f0r its effectiveness, the law
0f pr0perty dispels the illusi0n 0f similarity quite quickly. The c0mparis0n 0f German m0veable
pr0perty law and English pers0nal pr0perty law sh0uld make 0ne realise that b0th systems rest 0n
different and largely irrec0ncilable intellectual and epistemic framew0rks, with different definiti0ns
0f "pr0perty" (a term which can tellingly n0t be translated satisfact0rily int0 German), different
meth0ds and techniques f0r the transfer 0f pr0perty and creati0n 0f security rights, different levels
0f abstracti0n in legal rules and different appr0aches t0 the 0rganisati0n 0f a b0dy 0f law 4 (the
C0mm0n law appr0ach as 0pp0sed t0 a particularly highly abstract, c0mprehensive, c0herent and
l0gically well-devel0ped system f0r which German law is ren0wned), and s0 f0rth. The truism that
b0th systems may achieve a similar ec0n0mic 0utc0me - n0tably th0ugh thr0ugh their different
techniques as a dem0nstrati0n 0f their different mentalits - d0es n0t undermine their principal
irrec0ncilability;5 and this irrec0ncilability is c0rr0b0rated, albeit perhaps inadvertently, by
0ccasi0nal attempts at representing 0ne legal system in the structural framew0rk 0f
an0ther.6 Pers0nal/m0veable pr0perty law is at the heart 0f c0mmercial law which apparently
invites unificati0n 0f the laws in Eur0pe. But this c0mmercially highly relevant area is a case which
illustrates that the establishment 0f a new Eur0pean ius c0mmune 7 as a preliminary stage t0 a
harm0nisati0n 0r c0nvergence 0f the private laws 0f Eur0pe is m0st likely t0 fail 0r can 0nly be
gained thr0ugh f0rceful incisi0ns int0 existing systems. The quite frequent pr0clamati0n 0f a
redisc0very 0f a Eur0pean ius c0mmune traditi0n as a result 0f research int0 legal hist0ry and

R0man law8 d0es n0t change that pr0blem in the slightest. Hist0rical research may rather reveal
h0w fractured the 0ld ius c0mmune actually was.
What may strike the English lawyer immediately is the high level 0f the0retical abstracti0n in
German law. There is a l0ng traditi0n in German academic d0ctrine that reduces c0ncrete cases t0
a few general and abstract principles, 0ften successfully, s0metimes less c0nvincingly.9 Thus the
principles 0f the strictly separated c0ncepts 0f c0ntract and c0nveyance, which are far m0re
emphasised in German than in English law10, are n0t 0nly imp0rtant in relati0n t0 the derivative
acquisiti0n 0f 0wnership and 0riginal acquisiti0n in g00d faith 11, but als0 in the c0ntext 0f
p0ssess0ry and n0n-p0ssess0ry security rights. 12 Similarly, the f0ur main categ0ries 0f p0ssessi0n
pervade the entire German pr0perty law13, as well as the different versi0ns 0f transfer 0f
p0ssessi0n: physical delivery, traditi0 brevi manu, c0nstitutum p0ssess0rium etc. 14 German
Sachenrecht, as the wh0le 0f German private law, is a c0mprehensive and c0herent b0dy 0f
interlinked and mutually dependent rules. H0wever, 0ne sh0uld n0t c0nclude that this
c0mprehensive b0dy 0f law is als0 exhaustive. Especially in the law 0f securities, German law
devel0ped several f0rms 0f security rights 0utside the system 0f c0dified rules and these security
rights are still n0t at all 0r inc0mpletely regulated by statute. 15
In additi0n t0 the law, there is the language in which the law is expressed (0r even created) and
these tw0 c0nstituents are inextricably linked. Typical 0f German private law is the precise, but n0t
always appealing, technical language and legal termin0l0gy which is very c0nsistently applied
thr0ugh0ut in the German Civil C0de 0r BGB (Brgerliches Gesetzbuch) and in legal d0ctrine. I
have refrained fr0m translating German legal terms int0 the nearest equivalent in English law,
because 0ften there is n0 nearest equivalent, and such a step w0uld assist a s0mewhat casual
appr0ach t0 the c0mparis0n 0f laws in any case.16 Rather, I have supplied the German legal term in
the 0riginal language in brackets and given a translati0n 0r explanati0n which tries t0 c0nvey best
its meaning.
It has already been stressed that German private law is a c0dified system 0f a highly abstract
level, whereby the rem0val 0f 0ne element can lead t0 the dysfuncti0n 0f 0ther large areas 0f the
law. Thus it will 0ften be necessary t0 leaf back and f0rth when reading the f0ll0wing acc0unt.
After a definiti0n 0f pr0perty rights (secti0n B) and a sh0rt 0utline c0mparis0n between s0me
maj0r principles 0f German m0veable pr0perty and English pers0nal pr0perty law (secti0n C), the
general c0ncepts 0f b0th systems 0f pr0perty law, p0ssessi0n and 0wnership, with emphasis 0n
m0veable/pers0nal pr0perty, will be discussed (secti0n D), but the pr0visi0ns 0n the pr0tecti0n 0f
p0ssessi0n and 0wnership, which are 0f a str0ngly pr0cedural nature, will be 0utlined briefly 0nly.
Then the derivative and 0riginal acquisiti0ns 0f 0wnership will be dealt with under E, and finally,
the restricted real rights, especially security rights (pledges and retenti0n 0f title) will be discussed
under F.
1. The meaning 0f the term "pr0perty"
F0r the present discussi0n, a rather practical definiti0n 0f "pr0perty" with0ut t00 much emphasis
0n legal the0ry17 may suffice. Pr0perty law defines 0bjects 0f pr0perty f0r the purp0se 0f the law,
whether tangible 0r c0nceptual18, and c0nfers exclusive rights in these 0bjects 0r "things" that are
enf0rceable against the wh0le w0rld. These rights, pr0perty rights, are s0cially rec0gnised and
legally pr0tected 0r created exclusive p0wers 0ver these 0bjects, asserted against the w0rld at
large. Thus pr0perty law (Sachenrecht) creates "things" (Sachen) as n0rmative c0ncepts and
assigns these things t0 natural 0r legal pers0ns by way 0f c0nferring interests in them. 19 The type
0f pr0perty right (0wnership, pledge etc.) determines the extent 0f the granted exclusive p0wer 0r
The w0nderfully ambigu0us English legal term "pr0perty" is difficult t0 translate int0 German law
and language.20 It has at least three meanings:21 pr0perty 0bjects 0r things, pr0perty rights, and
assets 0r wherewithal.22Thus, where "pr0perty" w0uld be used in the sense 0f an 0bject, it will be
referred t0 in the f0ll0wing as "thing" 0r "res" (Sache), 0r, in the appr0priate c0ntext, "m0veable"
(bewegliche Sache), 0r als0 "chattel", when English law is discussed. When the w0rd "pr0perty" is
underst00d in the sense 0f a right in such a thing which is enf0rceable against the w0rld at large,
this right will be called "pr0perty right" 0r "pr0prietary right" 0r "real right" (Sachenrecht,

dingliches Recht). The w0rd "pr0perty" will 0nly be used when it is meant t0 den0te "assets in
general" (Vermgen) with0ut reference t0 a specific item within such assets.
In German law, the meaning 0f "thing" (res) is narr0wer than in 0ther legal systems. F0r the
purp0se 0f the law, a thing (Sache) is defined in 90 BGB as c0mprising physical 0bjects
0nly.23 Anything that has n0 c0rp0real existence as such can be a thing if it can be emb0died in
s0me kind 0f physical 0bject, such as a c0mputer pr0gram 0n a magnetic disk. 24 H0wever, all kinds
0f rights (0bligati0ns, debts) are n0t things, because they are n0t c0rp0real. This is in c0ntrast
with, f0r example, Sc0ts law,26 and Austrian law which states in 285 ABGB that "everything that
is distinguished fr0m the pers0n, and serves the use 0f men, is called a thing in the sense 0f the
law." B0th legal systems reflect the n0ti0n 0f pr0perty under the influence 0f Natural Law in 18th
century Enlightenment in its re-interpretati0n 0f the meaning 0f pr0perty in R0man law.28 Thus in
Austrian and Sc0ts law, rights (0bligati0ns) are things, in German law, they are n0t. In English law
a divisi0n between tangible things, intangibles and pure intangibles can be made, but this plays a
m0re sub0rdinate r0le than in Civil law jurisdicti0ns, and there is n0 real c0rrelati0n t0 the Civilian
c0ncept 0f m0veable and imm0veable pr0perty. The hist0rically gr0wn distincti0n f0ll0ws the
remedial treatment 0f 0bjects 0f pr0perty as t0 their rec0very and is still m0re imp0rtant t0day f0r
the classificati0n 0f things int0 (a) real pr0perty (land), which can be claimed in specie, and (b)
pers0nal pr0perty, where 0nly damages are principally available but n0 right t0 delivery in
specie.29 Pers0nal pr0perty has the tw0 subdivisi0ns 0f (i) chattels real (principally leaseh0ld
interests in land) and (ii) chattels pers0nal which c0mprise ch0ses in p0ssessi0n and ch0ses in
acti0n.30 Intellectual pr0perty rights are things in English and Sc0ts law,31 but a sui generis
categ0ry in German and Austrian law.32
As the aut0mated handling 0f the 0rder f0r payment pr0cedure has been intr0duced with the view
t0 replace the quite lab0ri0us system 0f manual pr0cessing by an effective, c0st-efficient and perhaps m0st pertinently - extremely fast pr0cedure, 689 I ZP0 stipulates that in aut0mated
handling cases, submissi0ns sh0uld have been dealt with n0 later than by the first business day
after the day 0f filing.
2. The available types 0f pr0perty rights
In line with 0ther c0ntinental Eur0pean legal systems, 33 German law rec0gnises 0nly certain types
0f pr0perty rights (numerus clausus 0f pr0perty rights, Typenzwang); 34 the list 0f available
pr0perty rights is c0nclusive and mandat0ry law. Thus the parties t0 a legal transacti0n can 0nly
ch00se the pr0perty rights in the way in which they are pr0vided by the law, but they cann0t
create new 0nes. This applies b0th t0 a given categ0ry 0f pr0perty right as such (Typenzwang) and
t0 its c0ntents, at least in its br0ad 0utline (Typenfixierung). 35 As pr0perty rights are abs0lute36 and
bind third parties with0ut their pri0r agreement, such parties must be able t0 ascertain the extent
and quality 0f the rights they are expected t0 respect ("visibility" 0f the real right,
Publizittsprinzip37), and, if they acquire such rights, they must be certain as t0 the type and
quality 0f the right they 0btain, 0therwise the safe transfer 0f pr0perty rights w0uld be seri0usly
impeded.38 That c0ntrasts with the law 0f c0ntract: a party t0 a c0ntract has insider kn0wledge as
t0 the true nature and extent 0f a (pers0nal) right, thus in the law 0f c0ntract there is n0 need f0r
c0mpuls0ry categ0ries 0f (pers0nal) rights. 39 English law effectively 0perates a numerus clausus 0f
real rights, 0bvi0usly with0ut a statut0ry basis, but with end0rsement in case law and d0ctrine
that has never seri0usly been challenged.40
The rec0gnised pr0perty rights in German law are, in particular: 41 (1) full real right (dingliches
V0llrecht): this is 0wnership (Eigentum, 903 BGB), the m0st c0mprehensive real right. It is
strictly distinguished fr0m p0ssessi0n (Besitz, 854 BGB), which is n0t a (real) right, but the
factual h0lding 0f a thing in 0ne's p0wer with the intenti0n t0 d0 s0. 42 (2) restricted real rights
(beschrnkte dingliche Rechte) are largely equivalent t0 pr0prietary rights less than
0wnership,43 0r special pr0perty,44 0r sub0rdinate real rights:45 These include servitudes, user rights
(ususfructus), real burdens (Reallast, 1105 BGB), unc0mpleted real rights, such as the right 0f
an 0wner in waiting in a retenti0n 0f title arrangement 46 (Anwartschaftsrecht), and rights in
security. These rights in security in relati0n t0 m0veables are pledges (Pfandrecht an beweglichen
Sachen). Ec0n0mically still very imp0rtant, but n0t discussed here, are the rights in security in
relati0n t0 imm0veables: the Grundpfandrecht, 47 a statut0ry security in land which can assume the
type 0f (a) a hyp0thec (Hyp0thek, 1113 BGB): security 0f a right (debt) with0ut the credit0r's
p0ssessi0n 0f the land that serves as the security ("m0rtgage/charge"), 0r 0f (b) a Grundschuld (
1191 BGB): security similar t0 a hyp0thec but with0ut the requirement 0f a right t0 be secured

(alth0ugh this will usually be the case), 0r 0f (c) a Rentenschuld ( 1199 BGB): a kind 0f
Grundschuld plus the 0bligati0n t0 make regular payments t0 a credit0r-beneficiary (n0w
0bs0lete).48 English law als0 devel0ped several 0f these f0rms 0f pr0perty rights in its 0wn way,
but with a less s0phisticated 0verarching d0ctrinal and c0nceptual framew0rk, which is 0ne effect
0f the generally m0re flexible English pr0perty c0ncept. M0re0ver, English law has certain types 0f
security rights 0ver chattels which are unkn0wn in German law, but even where they seem similar,
they still have certain remarkable distinguishing features (e.g. the pledge). The purely ec0n0mic
functi0ns and results 0f these different legal techniques are usually largely the same. 49
As the discussi0n 0n the definiti0n 0f pr0perty and pr0perty 0bjects (things) has already sh0wn,
German and English laws may 0btain similar ec0n0mic results, but 0perate 0n very different
the0retical premises. The term "pr0perty" in English law is rather vague, while the German
definiti0n 0f thing (Sache) is m0re precise and als0 narr0w, even narr0wer than in 0ther Civil law
jurisdicti0ns. A legacy 0f R0man law in German law is the strict separati0n between p0ssessi0n,
which is in principle a mere fact, and 0wnership, the m0st extensive pr0perty right. 50 English law
sees p0ssessi0n as a right, 51 and especially as regards pers0nal pr0perty, p0ssessi0n and
0wnership cann0t be clearly divided: an 0wner 0f a chattel c0uld be described as the pers0n with
the best p0ssess0ry interest in it. 52 Thus 0ne pr0prietary interest fl0ws int0 the 0ther and f0rms
part 0f it, and that is supp0rted by the fact that b0th p0ssessi0n and 0wnership are relative in
nature.53 This relativity is expressed in the n0ti0n 0f "title": the title measures the strength 0f a
pers0n's interest in relati0n t0 0thers. That interest in an 0bject 0f pr0perty den0tes the sum 0f
rights 0ver it which the pers0n enj0ys against 0thers, but n0t always against all 0thers: 54 thus
0wnership is, c0mpared t0 p0ssessi0n, a m0re c0mprehensive superi0r right 0ver a thing in a
given dispute, but n0t an abs0lute right. 55 In c0ntrast, the German idea 0f 0wnership is that it is
abs0lute as in R0man law,56 c0nferring d0minium 0ver the thing, which is n0t qualified by the
strength 0f entitlement vis--vis a c0ntestant in a dispute 0ver the thing. P0ssessi0n in German
law is h0wever relative, as in R0man law, and that is dem0nstrated by the p0ssessi0n pr0tecti0n
rules: the pers0n with the better entitlement t0 p0ssessi0n relative t0 his 0pp0nent wins, and that
is n0t necessarily the pers0n with a better pr0prietary right 0ver a thing; a right t0 p0ssess is n0
defence against a p0ssessi0n pr0tecti0n remedy.57
This difference between abs0lute 0wnership in German law and relative 0wnership in English law
als0 appears in the 0wnership pr0tecti0n rules. English law pr0tects pr0perty rights in chattels,
including 0wnership, thr0ugh remedies in t0rt, in particular trespass and c0nversi0n, 58 while
German law has a special pr0prietary remedy which gr0ws 0ut 0f the abs0lute 0wnership right and
is an essential part and expressi0n 0f it: the acti0n 0f delivery 0f the res 0r rei vindicati0. 59
An0ther m0st imp0rtant difference is that German law d0es n0t rec0gnise the divisi0n 0f
0wnership int0 legal and equitable (beneficial) 0wnership as the familiar feature 0f English law.
H0wever, even in English law the imp0rtance 0f equitable 0wnership in relati0n t0 pers0nalty is
limited. The 0nly excepti0n where equitable 0wnership is central, even as t0 chattels, is the
trust.60 Real rights less than 0wnership intr0duce beneficial interests int0 the realm 0f pers0nal
pr0perty t0 a greater extent, f0r example the charge 0n chattels, which can 0nly be
equitable.61 But an equitable pledge is n0t rec0gnised because English law d0es n0t permit the
c0ncept 0f equitable p0ssessi0n.62 As f0r pledges, German law struggles s0mewhat when devising
the legal technique f0r regulating the sale 0f a pledged res in satisfacti0n 0f a secured debt, where
the c0ncept 0f beneficial 0wnership c0uld be 0f s0me assistance in the divisi0n 0f the entitlement
t0 the pr0ceeds 0f sale between the 0wner 0f the pledged thing and the credit0r.63 Partly because
equitable real rights d0 n0t exist in German law, an instrument c0mparable t0 the fixed 0r fl0ating
charge in English law64 is n0t available.65
At first glance, p0ssessi0n in English law d0es n0t differ much fr0m German law. In b0th
jurisdicti0ns, p0ssessi0n is primarily a fact with legal c0nsequences. 66 This takes acc0unt 0f the
factual side in which legal rules manifest themselves in the material w0rld, but that is als0 as far

as the similarity g0es. As already n0ted, English law sees p0ssessi0n as a real right (the auth0rs
differ 0n that67 ), 0ften expressed in the ambigu0us f0rm 0f "p0ssess0ry title", 68 while German law
d0es n0t. Because 0wnership and p0ssessi0n are relative rights in English law, especially in the
law 0f pers0nal pr0perty, they are cl0sely c0nnected t0 0ne an0ther.69 Because 0f this cl0se
c0nnecti0n - p0ssessi0n typically den0tes 0wnership 70 and b0th enj0y the same t0rti0us
pr0tecti0n71 - they are s0metimes even dealt with in reverse 0rder in textb00ks which w0uld
surprise a German lawyer: p0ssessi0n after 0wnership.72 English auth0rs s0metimes res0rt t0 the
practical example 0f bail0r and bailee when emphasising the difference between 0wnership (with
the bail0r) and p0ssessi0n (with the bailee),73 which is characteristic 0f this legal culture, because
German lawyers w0uld see that example as an applicati0n 0f an abstract rule, n0t as a c0ncrete
state 0f affairs (separati0n 0f p0ssessi0n fr0m 0wnership) 0ut 0f which abstract c0ncepts c0uld be
devel0ped. It has been stressed that p0ssessi0n in English law is incapable 0f precise 0r
exhaustive definiti0n.74 This fluidity 0f the English c0ncept 0f p0ssessi0n c0ntrasts str0ngly with
German law, where 0wnership and p0ssessi0n are n0ti0nally separated with great care and where
the incidents 0f p0ssessi0n are clearly defined.
(a) Types 0f p0ssessi0n
In German law, and in legal systems f0ll0wing R0man law generally, p0ssessi0n is the exercise 0f
c0ntr0l 0r p0wer 0ver a thing with the intenti0n t0 d0 s0. Thus p0ssessi0n requires tw0 elements:
factual p0wer 0ver the res by way 0f exclusive physical c0ntr0l 0r detenti0n (c0rpus p0ssidendi),
and intenti0n t0 p0ssess f0r 0neself 0r an0ther (animus p0ssidendi). 75 German law largely t00k
0ver the R0man c0ncept 0f p0ssessi0n (see 854 BGB et seq.): 76 it is n0t a real 0r pers0nal right
but a fact with legal c0nsequences.77
German law distinguishes between several types 0f p0ssessi0n, in the main, but n0t entirely,
f0ll0wing R0man law. The m0st imp0rtant scenari0s will be discussed briefly. The principal
categ0ry 0f p0ssessi0n is that 0f (a) p0ssessi0n su0 n0mine: 78 the p0ssess0r has the intenti0n t0
p0ssess f0r himself (Eigenbesitz, "p0ssessi0n f0r 0ne's 0wn", animus rem sibi habendi, 872
BGB), irrespective 0f whether 0r n0t he has a legal right t0 p0ssessi0n. In c0ntrast, there is (b)
p0ssessi0n alien0 n0mine, where actual physical c0ntr0l is exercised f0r the p0ssess0r by
s0me0ne else (Fremdbesitz "p0ssessi0n f0r s0me0ne else", animus alien0 n0mine tenendi). Where
the p0ssess0r himself exercises the act 0f p0ssessi0n, this is (c) unmittelbarer Besitz ("direct
p0ssessi0n"). If the p0ssess0r has the intenti0n t0 p0ssess f0r himself, but physical p0ssessi0n is
with s0me0ne else respecting the p0ssess0r's intenti0n, then this is (d) "indirect p0ssessi0n"
(mittelbarer Besitz, 868 BGB). These f0ur categ0ries (a)-(d) can appear in several c0mbinati0ns.
F0r example, a tenant/hirer 0r pledgee exercises physical c0ntr0l directly (is theref0re "direct
p0ssess0r", unmittelbarer Besitzer), and has the intenti0n t0 p0ssess, n0t f0r himself (thus he is
Fremdbesitzer, "p0ssess0r f0r s0me0ne else"), but f0r the less0r 0r pledg0r, the latter being
indirect and su0 n0mine p0ssess0r (mittelbarer Eigenbesitzer). 79 The tenant 0r pledgee
(unmittelbarer Fremdbesitzer) wh0 "mediates" p0ssessi0n in relati0n t0 an indirect p0ssess0r by
exercising physical c0ntr0l 0ver a thing as a direct p0ssess0r 0n behalf 0f that indirect p0ssess0r is
als0 referred t0 as "Besitzmittler" ("mediat0r 0f p0ssessi0n") in German law. 80 He is n0t merely
h0lder 0f the res ("Inhaber") because he d0es n0t 0nly h0ld the thing physically, but als0 has the
intenti0n t0 p0ssess, albeit f0r s0me0ne else, and is theref0re p0ssess0r.81 C0ntrary t0 the direct
alien0 n0mine p0ssessi0n 0f pledgees, bailees and tenants wh0 p0ssess f0r their pledg0rs, bail0rs
0r less0rs, respectively,82 an 0wner 0r a thief is p0ssess0r su0 n0mine (Eigenbesitzer), and als0
direct p0ssess0r su0 n0mine (unmittelbarer Eigenbesitzer) if he actually exercises physical c0ntr0l.
The 0wner wh0 is his tenant's sub-tenant is b0th direct p0ssess0r alien0 n0mine (as sub-tenant)
and indirect p0ssess0r su0 n0mine (as 0wner). 83
Besides, there is the distincti0n between s0le p0ssessi0n (Alleinbesitz) and p0ssessi0n t0gether
with 0thers, being (a) c0-p0ssessi0n (Mitbesitz, 866 BGB), where the wh0le res has m0re than
0ne p0ssess0r, and (b) partial p0ssessi0n (Teilbesitz, 865 BGB), where p0ssess0rs p0ssess 0nly
parts 0f the res if that is physically p0ssible.
English law tends t0 define p0ssessi0n in a similar way as (a) the exercise 0f factual c0ntr0l and
(b) the simultane0us "intenti0n t0 c0ntr0l"84 0r "intenti0n t0 exclude 0thers fr0m the exercise 0f
c0ntr0l".85 The latter f0rmulati0n ch0sen by 0ne auth0r p0ints t0wards n0ti0ns 0f 0wnership
("exclusi0n") and is an0ther example that sh0ws the pr0ximity 0f these tw0 c0ncepts. English law
is aware 0f different incidents 0f p0ssessi0n, s0metimes referred t0 as "degrees 0f
p0ssessi0n",86 but sees them much m0re in c0nnecti0n with practical applicati0ns which illustrate

them (e.g. bailment, pledge). Actual p0ssessi0n means that the p0ssess0r has physical c0ntr0l
and the intenti0n t0 c0ntr0l.87 This is c0ntrasted with c0nstructive p0ssessi0n, where the p0ssess0r
has intenti0n t0 c0ntr0l but the factual c0ntr0l is carried 0ut by s0me0ne else. The c0nstructive
p0ssess0r has the right t0 take actual p0ssessi0n. 88 This recalls the German n0ti0n 0f direct and
indirect p0ssessi0n (unmittelbarer/mittelbarer Besitz). But is it direct/indirect p0ssessi0n su0
n0mine (Eigenbesitz) 0r alien0 n0mine (Fremdbesitz)? Bail0r and bailee, 89 f0r example, exercise
p0ssessi0n in s0me way, the bail0r having c0nstructive p0ssessi0n, and the bailee factual c0ntr0l
which g0es bey0nd mere cust0dy.90 This has been expressed as the bailee exercising c0ntr0l in a
dual capacity, f0r himself and as agent f0r the bail0r, which den0tes "dual p0ssessi0n", 0r "j0int
actual p0ssessi0n",91 0r "relativity 0f p0ssessi0n".92 The term "c0nstructive p0ssessi0n" is n0t
entirely clear 0n that p0int, and that may have c0ntributed t0 the fact that the usefulness 0f this
term has been questi0ned.93 Acc0rding t0 s0me English auth0rs, "c0nstructive p0ssessi0n" 0nly
c0vers cases where the bailee h0lds p0ssessi0n t0 the bail0r's 0rder, s0 that p0ssessi0n is shared
between the tw0, while where the bailee is h0lding f0r an interest 0f his 0wn (e.g. as a hirer under
a rental agreement), he has exclusive p0ssessi0n and the bail0r merely a right t0 p0ssess but n0
actual p0ssessi0n.94 The idea 0f regarding c0nstructive p0ssessi0n as a j0int interest like a j0int
tenancy in case 0f 0wnership,95 because 0f the nature 0f p0ssessi0n as being indivisible, is
arguably even m0re c0nfusing than the traditi0nal view 0n c0nstructive p0ssessi0n. There is dual
p0ssessi0n, but the quality 0f p0ssessi0n is different with the bail0r and the bailee (0r pledg0r,
pledgee and the like).
Actual c0ntr0l sh0rt 0f p0ssessi0n is cust0dy; f0r example the empl0yee is regarded as having
cust0dy 0f his empl0yer's chattels. The empl0yer is p0ssess0r.96
(b) Acquisiti0n/transfer 0f p0ssessi0n
F0ll0wing the neat differentiati0n 0f the types 0f p0ssessi0n, German law distinguishes between
acquisiti0n 0f direct p0ssessi0n and 0f indirect p0ssessi0n. Direct p0ssessi0n is acquired by
0btaining factual p0wer 0ver a thing ( 854 BGB), either in a derivative 0r 0riginal way, that is,
either with 0r with0ut the previ0us p0ssess0r's intenti0n t0 transfer.97 Indirect p0ssessi0n can arise
in tw0 ways ( 868 - 870 BGB): either a direct p0ssess0r bec0mes indirect p0ssess0r (an 0wner
lets his res t0 an0ther: 0wner - indirect p0ssess0r, lessee - direct p0ssess0r), 0r a direct
p0ssess0r, wh0 remains direct p0ssess0r, pr0vides an0ther with the indirect p0ssessi0n 0ver a
thing (a typical example is the transfer 0f 0wnership in a m0veable f0r security purp0ses, whereby
the pri0r 0wner retains p0ssessi0n 98).99
0btaining p0ssessi0n is als0 a prerequisite f0r 0btaining 0wnership. 100 H0wever, while the basic
type 0f derivative acquisiti0n 0f p0ssessi0n (and 0wnership) is by way 0f physical delivery, German
law als0 rec0gnises meth0ds 0f surr0gate delivery as a replacement 0f physical delivery: the
traditi0 brevi manu (bergabe kurzer Hand, sh0rt-handed delivery, 929 BGB, sentence 2), and
the c0nstitutum p0ssess0rium (Besitzk0nstitut, 930 BGB). German law regulates these types 0f
delivery in the c0ntext 0f 0wnership. Where the acquirer 0f the thing has already g0t the res in
his/her p0ssessi0n, 0wnership can be transferred by the mere agreement between the parties that
the new 0wner (acquirer) wh0 has hithert0 held the thing with the intenti0n t0 p0ssess f0r the
transfer0r, shall n0w exercise p0ssessi0n f0r himself: traditi0 brevi manu. Thus the p0ssess0r f0r
an0ther (alien0 n0mine) bec0mes a p0ssess0r f0r himself (su0 n0mine). 101 In c0ntrast, transfer 0f
0wnership by way 0f the c0nstitutum p0ssess0rium is effected by the previ0us 0wner retaining
direct p0ssessi0n 0f the thing but giving s0me0ne else indirect p0ssessi0n, f0r example thr0ugh a
sale and lease back agreement.102 Thus the previ0us 0wner wh0 was p0ssessing f0r himself n0w
p0ssesses f0r an0ther, the acquirer.103 In b0th cases 0f surr0gate transfer, a physical transfer and
retransfer 0f the res can be av0ided by changing the p0ssess0r's intenti0n t0 p0ssess. 104
A p0ssess0r l0ses p0ssessi0n when he l0ses his factual c0ntr0l permanently, either unintenti0nally
0r deliberately ( 856 BGB), irrespective 0f a p0ssible c0ntinuing right t0 p0ssess, e.g. as 0wner.105
The principal rules 0f the acquisiti0n 0f p0ssessi0n are similar in English law. There is actual
delivery, where actual p0ssessi0n is c0nferred t0 the deliveree. 106 Besides that, English law
rec0gnises c0nstructive delivery, which enc0mpasses situati0ns that resemble cl0sely the meth0ds
0f surr0gate delivery in German law in all but name. Thus it is c0nstructive delivery if the deliver0r
in actual p0ssessi0n 0f the res agrees with the deliveree t0 h0ld the res as his bailee, whereby the
deliveree bec0mes c0nstructive p0ssess0r;107 0r if the deliveree already in actual p0ssessi0n as
bailee f0r the deliver0r agrees with the deliver0r t0 h0ld the res fr0m n0w 0n in his 0wn right. 108 If

a third party is in actual p0ssessi0n, the third party can att0rn t0 the deliveree with the deliver0r's
c0nsent, that is, ackn0wledge that he n0w h0lds as a bailee f0r the deliveree instead 0f the
deliver0r, and thr0ugh this c0nstructive delivery the deliveree acquires c0nstructive p0ssessi0n. 109
There is als0 the categ0ry 0f symb0lic delivery, where a symb0l is delivered 0r an act symb0lising
delivery is perf0rmed,110 alth0ugh English auth0rs tend t0 h0ld that where the symb0l (e.g. a key)
is capable 0f giving actual p0ssessi0n, it is actual delivery, and where it is n0t, it tends n0t t0 be
seen as delivery at all, 0r is c0nstructive delivery, which suggests that the categ0ry 0f "symb0lic
delivery" is superflu0us.111
P0ssessi0n is l0st by way 0f transfer t0 a third pers0n 0r if p0ssessi0n is deliberately surrendered
by aband0nment 0f intenti0n and c0ntr0l in fact.112 Aband0nment 0f p0ssessi0n is generally
c0nsidered t0 be acc0mpanied by a l0ss 0f 0wnership.113 It is interesting t0 n0te that the English
c0urts, usually in the c0ntext 0f theft cases, tend n0t t0 assume aband0nment with0ut very str0ng
evidence, but d0 n0t c0nsider the p0tentially different legal situati0n as regards actual p0ssessi0n
(which has been l0st 114) and 0wnership (which may c0ntinue),115 which sh0ws again h0w much
p0ssessi0n and 0wnership are intertwined in English law.
(c) Pr0tecti0n 0f p0ssessi0n
As already menti0ned, English law regards b0th p0ssessi0n and 0wnership as relative rights,
whereby the best title prevails against c0mpeting titles, and it pr0tects b0th interests by the same
set 0f t0rts ("pr0perty t0rts").116 Acc0rdingly, the pr0tecti0n 0f p0ssess0ry interests in English law
will be discussed in the c0ntext 0f the pr0tecti0n 0f 0wnership. 117 English lawyers distinguish, b0th
in relati0n t0 p0ssessi0n and t0 0wnership, between interest in pr0perty, which measures the
quality 0f the rights which can be exercised 0ver the thing, and title t0 pr0perty, which indicates
the strength 0f an interest in the thing as against 0ther parties asserting c0nflicting
interests.118 The distincti0n in German law between "petit0ry remedies" (based 0n 0wnership and
being abs0lute) and "p0ssess0ry remedies" (based 0n p0ssessi0n and being relative) 119 has n0
equivalent in English law. The p0ssess0ry remedies in German law with be discussed bel0w.
The general rule in German law is that unauth0rised trespass 0r interference with p0ssessi0n is
pr0hibited ( 858 BGB, "Verb0tene Eigenmacht"). When this happens, the p0ssess0r (whether as
direct p0ssess0r su0 n0mine 0r alien0 n0mine) has the right t0 self-defence t0 c0unteract the
impending l0ss 0f p0ssessi0n ("Besitzwehr"). If the p0ssess0r has been disp0ssessed, he can take
the res fr0m the trespasser ("Besitzkehr"), pr0vided that happens with0ut delay as a result 0f the
trespasser being caught red-handed ( 859 BGB). 120 Bey0nd these cases, self-help is n0t available
and the p0ssess0r has t0 enf0rce his claim f0r rest0rati0n 0f p0ssessi0n (Anspruch auf
Wiedereinrumung des Besitzes, 861 BGB) thr0ugh the c0urts. A similar claim exists t0 fend 0ff
unauth0rised interference with p0ssessi0n, and the p0ssess0r can als0 seek an injuncti0n that the
defendant cease and desist further interferences ( 862 BGB). 121 B0th claims are statute-barred
0ne year after the unauth0rised interference 0r disp0ssessi0n ( 864 BGB). Damages can 0nly be
claimed under the general rules 0f t0rt ( 823 BGB, especially fault requirement) and are n0t part
0f the p0ssessi0n pr0tecti0n remedies.122 The defendant has the defences 0f permissi0n 0f
interference ( 863 BGB), and 0f the defective p0ssessi0n 0f the claimant vis--vis himself, the
defendant, because the claimant has unlawfully disp0ssessed him bef0re ( 861 (2) BGB).
H0wever, a right t0 p0ssess is n0t a valid defence against a p0ssessi0n pr0tecti0n remedy; the
defendant must bring a separate acti0n based 0n his c0ntractual right (e.g. sale) 0r real right (e.g.
0wnership). 123
If the direct p0ssess0r suffers the trespass, his indirect p0ssess0r su0 n0mine, if there is 0ne, als0
enj0ys the p0ssessi0n pr0tecti0n rules 0utlined ab0ve against the trespassing third party, but n0t
against his 0wn direct p0ssess0r alien0 n0mine. Thus the less0r has n0 p0ssessi0n rest0rati0n
remedy against his lessee; he has t0 sue 0n the basis 0f the lease 0r hiring agreement between
the parties. The lessee/hirer, h0wever, as direct p0ssess0r, can fend 0ff the unauth0rised
interference by his less0r under 859 0r sue under 862 BGB. 124
2. 0wnership
(a) Nature, extent, c0ntent 0f 0wnership (use, expl0itati0n)

The c0ntemp0rary idea 0f 0wnership is the liberal c0ncept 0f full individual 0wnership. English and
German law c0ncur 0n this p0int.125 The legal systems generally d0 n0t differ much in pr0fessing
the extensive nature 0f 0wnership and in being fairly unspecific as t0 its c0ncrete quality and
c0ntent.126 The substance 0f a real 0r pr0prietary right can be split int0 a number 0f attributes that
turn the real right int0 c0ncrete individual real rights, c0mm0nly referred t0 as a "bundle 0f
rights".127 These c0ncrete real rights are determined and delineated as t0 their existence and
quality/c0ntent by an external and internal aspect, which b0th meet as c0inciding sides 0f the
same c0in. The external aspect bec0mes manifest in the remedies f0r the pr0tecti0n 0f 0wnership.
The internal side 0f real rights materialises in the p0wers 0ver a thing which these real rights
entail; and the widest p0ssible legal p0wer in relati0n t0 a thing is 0wnership (d0minium). In the
R0manist traditi0n, 0wnership is typically defined as (the0retically) the right (as in principle an
unfettered p0wer) t0 the substance and the use 0f a thing in whichever manner, and the right t0
disp0se 0f the thing, all within the limits 0f the law. Fr0m a C0mm0n Law angle, 0ne may say that
"0wnership is the greatest p0ssible interest in a thing which a mature legal system
rec0gnises".128 0wnership ("d0minium" in a R0man law-based system) is theref0re the m0st
c0mprehensive pr0perty right the law pr0vides. 0wnership is c0nsidered as the standard, and
residuary,129 real right c0nferring (ideally) the m0st abs0lute p0wer 0ver a thing. In c0mparis0n
with the 0wnership right, any 0ther real rights (restricted real rights) have a m0re defined and
limited ambit.
German private law reflects these principles. 903 BGB defines 0wnership (Eigentum) as the
0wner's right t0 deal with the res at his will and t0 exclude every0ne else fr0m any influence 0ver
the res, subject t0 legal restricti0ns 0r rights 0f third parties. In particular, this m0st
c0mprehensive real right entitles the 0wner t0 p0ssessi0n, t0 disp0se 0f the thing, 0r t0 grant
sub0rdinate rights in relati0n t0 it, t0 use and expl0it it, and t0 reap the fruits 0r 0ther benefit 0f
its use (jus utendi, fruendi, et abutendi).130 The 0wner als0 has the m0st c0mprehensive remedies,
especially the right t0 rec0ver the res in s0me0ne else's p0ssessi0n with0ut entitlement in an
acti0n 0f delivery131 (Eigentumsklage, Eigentumsherausgabeanspruch, rei vindicati0, 985
BGB).132 In German law, 0wnership 0nly refers t0 specific things, n0t t0 assets in general, such as
a wareh0use 0r a business.133
The main differences between the 0wnership c0ncept in English law and in German law have
already been stated.134 The c0ncept 0f 0wnership in English law benefits fr0m the elusiveness 0f
the n0ti0n 0f "pr0perty", which can, at the same time, refer t0 assets in general as well as t0
individual things and real rights in them. Thus 0wnership and als0 real rights less than 0wnership
d0 n0t necessarily have t0 refer t0 specific 0bjects. 135 English 0wnership rights can be split int0
legal and equitable rights; the term equitable 0wnership can refer t0 rights which 0nly equity
rec0gnises as pr0perty, 0r, m0re c0mm0nly, equitable 0wnership den0tes the situati0n where
equitable 0wnership rights are held by (a) legal 0wner(s) under a trust. 136 English 0wnership rights
are relative,137 rather than abs0lute, c0nferring title rather than d0minium, and are much m0re
b0und up with p0ssessi0n, which is reflected in the way in which 0wnership rights are
pr0tected.138 This will be sh0wn in the f0ll0wing.
(b) C0-0wnership
The c0ncept 0f c0-0wnership highlights the different ideas 0f "split 0wnership" 139 in English and in
German law. The principal p0siti0n 0f c0-0wnership in German private law is that 0f 0wnership in
c0mm0n ( 1008 BGB) whereby the c0-0wners h0ld n0ti0nal - n0t factual - shares 0r fracti0ns in
the res (Miteigentum nach ideellen Bruchteilen). Each 0wner can disp0se 0f his share, but 0nly the
c0mmunity 0f 0wners can disp0se 0f the wh0le res ( 747 BGB). The regulati0ns c0ncerning the
c0mmunity 0f 0wners determine the rights 0f management and the rules regarding expenses and
return in relati0n t0 the res ( 741 BGB et seq.). Each 0wner can require the terminati0n 0f the
c0mmunity 0f 0wners, subject t0 special agreement ( 749 BGB). This c0mmunity 0f 0wners has
t0 be distinguished fr0m the (n0n-c0mmercial) partnership acc0rding t0 private law under the BGB
(Gesellschaft brgerlichen Rechts, BGB-Gesellschaft, 705 BGB et seq.): in the latter case
0wnership is held j0intly (Gesamthandseigentum) between the partners ( 718-719 BGB). 140
This acc0unt already sh0ws the great c0nceptual differences t0 English law. Quite 0ften a trust
arises in case 0f a c0-0wnership situati0n, where 0ne then has t0 c0nsider a "vertical" split 0f
0wnership between the c0-0wners and, simultane0usly, a "h0riz0ntal" split between the different
qualities 0f 0wnership at law and in equity. C0-0wnership is especially the d0main 0f land
law,141 but als0 exists in pers0nal pr0perty law (then 0ften als0 with a trust behind it). 142 C0-

0wnership at c0mm0n law can have the f0rm 0f the j0int tenancy (where surviv0rship 0r the ius
accrescendi applies), and the tenancy in c0mm0n, where there is a n0ti0nal divisi0n in shares 0f
the same 0r different sizes.143 J0int tenancy is similar t0 the German h0lding 0f 0wnership in the
BGB Gesellschaft as Gesamthandseigentum ( 719 BGB), while tenancy in c0mm0n resembles the
c0ncept 0f Miteigentum nach ideellen Bruchteilen ( 1008 BGB) in German general private law.
This similarity d0es n0t g0 further because c0-0wnership at c0mm0n law is 0ften c0mbined with a
trust in equity, which is alien t0 German law. In the present c0ntext, such a trust typically c0mes
int0 existence (apart fr0m its express creati0n) where 0ne party c0ntributes m0ney t0 the
purchase 0f a res which is in the 0wnership 0f (0nly 0r als0) an0ther 0r 0thers. In such a case, a
resulting trust144 in fav0ur 0f the c0ntributing party n0rmally145 arises, whereby the legal 0wner(s)
h0ld(s) as trustee(s) a beneficial share in equity, which is c0mmensurate with the beneficiary's
c0ntributi0n,146 unless an agreement t0 the c0ntrary can be inferred. 147 The beneficiary can als0 be
legal 0wner and trustee partly h0lding the beneficial interest f0r himself al0ngside the 0ther
trustee(s) wh0 may als0 be beneficiaries, as the case may be. 148 Thus there may be trustee A and
B, wh0 h0ld j0intly the legal title (because c0mm0n law presumes j0int tenancy 149) wh0 h0ld the
beneficial interest f0r themselves, A and B, in equity in the f0rm 0f a tenancy in c0mm0n (since
equity presumes tenancy in c0mm0n) because b0th c0ntributed t0 the purchase 0f the res. The
size 0f the equitable shares is supp0sed t0 equate the size 0f A's and B's c0ntributi0n, subject t0
agreement, and in the absence 0f any indicati0n, will be presumed as equal. 150 This c0mplicated
netw0rk 0f real rights in equity behind c0-0wnership at c0mm0n law cann0t n0t be emulated in
German law; in fact, it w0uld be quite difficult t0 explain its w0rkings t0 a German lawyer.
(c) Relati0nship between p0ssessi0n and 0wnership
In German law, p0ssessi0n is n0t a real right, but essentially a fact with legal c0nsequences. These
c0nsequences depend entirely 0n the existence 0f a factual c0ntr0l 0f the res. 151 In c0ntrast,
0wnership is the fullest and m0st c0mprehensive real right. 152 H0wever, this strict c0nceptual
separati0n, which is r00ted in R0man law,153 is s0mewhat 0verstated, and p0ssessi0n can assume
a r0le which really am0unts t0 a right 0r at least a legal relati0nship. 0ne 0f the maj0r effects 0f
p0ssessi0n is the presumpti0n 0f 0wnership ( 1006 BGB), pr0vided the presumed acquisiti0n 0f
0wnership 0ccurred t0gether with the acquisiti0n 0f p0ssessi0n, n0t earlier 0r later.154 Furtherm0re,
a disp0ssessed p0ssess0r has a claim f0r delivery 0f the res against the p0ssess0r ( 1007 BGB,
petit0rischer Besitzschutzanspruch), 155 but 0nly against a p0ssess0r wh0 0btained p0ssessi0n in
bad faith, 0r if the claimant has l0st the res bef0re. In these tw0 situati0ns the presumpti0n 0f
0wnership ( 1006 BGB) applies in fav0ur 0f the pri0r p0ssess0r. This effectively am0unts t0 a real
right based 0n earlier p0ssessi0n 0r a better right t0 p0ssessi0n. 156 The claim c0mes cl0se t0 the
real acti0n 0f delivery (rei vindicati0) under 985 as the central claim f0r the pr0tecti0n 0f
0wnership, and an 0wner may ch00se t0 res0rt t0 the acti0n under 1007 if pr00f 0f 0wnership
f0r an acti0n 0f delivery is t00 difficult. 157
It has already been emphasised that in English law the relati0nship between p0ssessi0n and
0wnership is cl0ser than in German law, which is particularly well sh0wn by the way in which
English law pr0tects 0wnership.
(d)Pr0tecti0n 0f 0wnership
In English law, there is the rebuttable presumpti0n that the p0ssess0r will als0 be the
0wner.158 This presumpti0n is similar t0 the German rule in 1006 BGB, but it has m0re extensive
c0nsequences. Unlike in German law, 0wnership as such d0es n0t c0nfer a title t0 sue. 159 It is
p0ssessi0n, 0r the immediate right t0 p0ssess, which d0es that, and in an acti0n against a
wr0ngd0er, p0ssessi0n c0unts as title.160 0nly in s0 far as the 0wnership right c0nfers, 0r is
c0mbined with, p0ssessi0n161 0r an immediate right 0f p0ssessi0n,162 can acti0n be taken
(indirectly) 0n the basis 0f 0wnership. As a l0gical c0nsequence, English law d0es n0t pr0tect
0wnership thr0ugh a vindicati0n right (acti0n 0f delivery, rei vindicati0), 163 a remedy which
emanates fr0m the very nature 0f the right as being a real right. The vindicati0n, a feature 0f
R0man law-based jurisdicti0ns, is regarded as an indispensable element 0f the real right, which is
als0 sh0wn by the fact that, f0r example, in German law, an independent assignment 0f the
vindicati0n right separately fr0m a transfer 0f 0wnership itself is imp0ssible. 164 English law pr0tects
0wnership thr0ugh the law 0f t0rts,165 and these pr0perty t0rts require p0ssessi0n (0r an
immediate right t0 p0ssess) f0r their applicability.166 M0re0ver, f0r the pr0tecti0n 0f interests in
pers0nal pr0perty, there is the c0mm0n alternative r0ute 0f an acti0n in negligence alleging
damage t0 the claimant's pr0perty which caused l0ss suffered by the claimant. 167

The details 0f the English pr0perty t0rts need n0t be discussed here. 168 The relevant t0rts are
trespass t0 chattels and c0nversi0n. The t0rt 0f trespass t0 chattels pr0tects p0ssess0rs (0wners)
against direct interference with their p0ssessi0n 0f the chattel. 169 This p0ssessi0n must be physical
p0ssessi0n 0r a right t0 immediate p0ssessi0n. 170 The interference has t0 be a direct, n0t merely
indirect, act, like taking away the chattel, and the act has t0 be wilful, n0t merely
inv0luntary.171 The t0rt 0f c0nversi0n is an ancient and c0mplex remedy which has arguably three
functi0ns: (a) it can act as a kind 0f substitute f0r a rei vindicati0, (b) it c0mpensates 0wners f0r
l0sses, (c) it may reverse unjust enrichment arising fr0m the chattel 0r its pr0ceeds. 172 C0nversi0n
requires that the defendant deals with g00ds in a manner inc0nsistent with the right 0f the true
0wner, and by d0ing s0 als0 intends t0 deny the 0wner's right 0r t0 assert a right which is
inc0nsistent with the 0wner's right.173 Many different acts can am0unt t0 c0nversi0n, such as the
wr0ngful taking 0f the claimant's pr0perty, its bailment, sale, l0ss 0r destructi0n. The claimant
needs t0 be in p0ssessi0n 0f the chattel 0r must have right t0 immediate p0ssessi0n. An 0wner
0ut 0f p0ssessi0n and with0ut the right t0 immediate p0ssessi0n cann0t sue in c0nversi0n, but he
can seek t0 be j0ined in an acti0n with s0me0ne wh0 has entitlement t0 sue. 174
It is c0mm0n t0 b0th t0rts that the 0wner can 0nly sue if he is in p0ssessi0n (which is interfered
with) 0r has a right t0 immediate p0ssessi0n (if he is 0ut 0f p0ssessi0n). The relative right 0f
0wnership is pr0tected thr0ugh the pr0tecti0n 0f the relative p0ssess0ry title. This mirr0rs in L0rd
Campbell's statement that "the pers0n wh0 has p0ssessi0n has the pr0perty". 175 Furtherm0re, the
primary relief is damages, n0t re-delivery 0f the chattel t0 the 0wner. H0wever, the claimant has
the ch0ice between tw0 types 0f relief: either he can claim damages, 176 0r the delivery 0f the
chattel, but in the latter case, the defendant has the alternative whether he wants t0 pay damages
t0 the value 0f the g00ds instead.177 Apart fr0m these tw0 f0rms 0f relief, there is a third,
discreti0nary, remedy: the c0urt has a discreti0n t0 0rder the delivery 0f the c0nverted pr0perty
instead 0f damages.178 H0wever, the 0wner can never rec0ver his chattel in specie as 0f right.
In stark c0ntrast t0 English law, 0wnership in German law is pr0tected by a pr0prietary, n0t
t0rti0us, remedy which is directed at the rec0very 0f the res in specie. The 0wner has especially
tw0 claims which result fr0m his real right 0f 0wnership: (i) the acti0n 0f delivery 0f the res
against the p0ssess0r, whereby the p0ssess0r has n0t 0r n0 l0nger a right t0 p0ssessi0n vis--vis
the 0wner (Eigentumsherausgabeanspruch, rei vindicati0, 985 BGB); and (ii) a claim against
interference with the enj0yment 0f the 0wnership right, whereby the interference d0es n0t am0unt
t0 a disp0ssessi0n 0f the 0wner. This latter claim against interference with 0wnership
(Eigentumsstrungsanspruch, acti0 negat0ria, 1004 BGB), thus s0mething which English lawyers
w0uld ass0ciate with a kind 0f 0wner's remedy against nuisance 0r trespass, is particularly
imp0rtant in respect 0f land, but als0 applies t0 m0veables.
The rei vindicati0 under 985 BGB is the disp0ssessed 0wner's acti0n 0f delivery 0f the res
against a p0ssess0r t0 rest0re the 0wner's p0ssessi0n. The p0ssess0r has a successful defence if
he has a right t0 p0ssess the res, based either 0n a c0ntract with the 0wner (e.g. hiring
agreement, l0an) 0r 0n a real right (e.g. pledge) ( 986 BGB). 179 0therwise, the p0ssess0r has t0
return the res t0 the 0wner, s0 that the latter can 0btain direct p0ssessi0n again. There are several
additi0nal rights the 0wner and the p0ssess0r may have against each 0ther.180 F0r example, the
p0ssess0r in g00d faith (redlicher Besitzer) can claim reimbursement fr0m the 0wner f0r his
expenses made in the meantime, pr0vided these expenses were necessary (n0twendig) 0r useful
(ntzlich) f0r the res ( 994 (1), 996 BGB), and he can keep the benefits (gez0gene Nutzungen)
he has 0btained fr0m the res. The p0ssess0r in bad faith (unredlicher Besitzer, that is s0me0ne
wh0 kn0ws 0r due t0 gr0ss negligence d0es n0t kn0w that he has n0 right t0 p0ssessi0n 181 ), can
0nly claim the necessary expenses made in the meantime, and he must hand 0ver the benefits
fr0m the res.182 The p0ssess0r in g00d faith is n0t liable t0 the 0wner f0r destructi0n 0r damage 0f
the res ( 993 BGB), whereas the p0ssess0r in bad faith is ( 989, 990 BGB). 183 Besides the rei
vindicati0, the 0wner may have claims resulting fr0m c0ntract 0r unjust enrichment 0r t0rt against
the p0ssess0r. The real acti0n 0f delivery is n0t sub0rdinate t0 these claims, but c0ncurrent with
The acti0 negat0ria under 1004 BGB is directed at the cessati0n 0f an existing interference
(Beeintrchtigung) with the 0wner's right t0 enj0y the res and at the preventi0n 0f future
interferences.185 The interference (0f whichever kind sh0rt 0f disp0ssessi0n) must be unlawful, but
the interferer need n0t be at fault. The interferer (Strer) must have br0ught ab0ut the
interference thr0ugh p0sitive acts 0r by way 0f keeping a state 0f affairs which can be attributed

t0 him.186 As this acti0n is principally relevant t0 imm0veable pr0perty, it is n0t discussed further
1. Derivative acquisiti0n 0f 0wnership
Far m0re than C0mm0n Law systems, Civilian jurisdicti0ns emphasise the difference between the
c0ntract (a c0ntract 0f sale 0r any 0ther c0ntract directed at the transfer 0f real rights), which
creates the 0bligati0n t0 transfer, and the c0nveyance, the actual transfer 0f a pr0prietary right
(especially 0wnership) in a res which effects the alienati0n 0f that res, that is, the passing 0f the
real right fr0m transfer0r t0 transferee. In German law, the divisi0n 0f the transfer 0f real rights
int0 the tw0 separate acts 0f "c0ntract" (Verpflichtungsgeschft, "bargain 0f 0bligati0n") and
"c0nveyance" (Verfgungsgeschft, "bargain 0f disp0siti0n") is particularly str0ngly devel0ped, as
this principle 0f separati0n (Trennungsprinzip) is c0mplemented by a sec0nd principle 0f abstract
real c0nveyance (Abstrakti0nsprinzip).188 The central questi0n determining the existence 0f an
abstract real c0nveyance is, whether a c0nveyance is 0nly valid if there is an underlying legally
rec0gnised reas0n 0r iusta causa traditi0nis t0 pass the real right. This iusta causa (Rechtsgrund)
is typically a c0ntract which is by its nature able, 0r designed, t0 transfer real rights: a sale, a l0an
(if a mutuum 0r l0an f0r c0nsumpti0n, n0t a c0mm0datum 0r l0an f0r use 189 ), and s0 0n. If real
rights can be transferred independently 0f such an underlying iusta causa traditi0nis, then the
system 0f transfer 0f real rights is abstract, as is the case in Germany; if a valid iusta causa is
required, then the system 0f transfer is causal, as happens in Austria 190 0r Switzerland.191
The principles 0f the transfer 0f the real right 0f 0wnership in German law apply t0 m0veable and
imm0veable pr0perty alike. German d0ctrine divides the principle 0f abstract real c0nveyance int0
tw0 sub-categ0ries: the abstracti0n as t0 c0ntent (inhaltliche Abstrakti0n): the validity 0f the
c0nveyance d0es n0t depend 0n a purp0se 0r cause; and the "external" abstracti0n (uerliche
Abstrakti0n): the validity 0f the c0nveyance d0es n0t depend 0n the validity 0f the c0ntract 0r
0bligati0n t0 transfer 0wnership.192 This is expressed in 929 BGB: f0r the transfer 0f 0wnership in
a m0veable, the 0wner must deliver the thing t0 the acquirer and b0th must be in agreement that
0wnership shall pass. That accentuates three essential elements 0f the German transfer 0f
0wnership: the factual requirement 0f a physical delivery 0f the res, the legal requirement 0f a
c0nsent between transfer0r and transferee as t0 the passing 0f 0wnership (dinglicher Vertrag,
"real/pr0prietary c0ntract"), and the independence 0f the effect 0f such a pr0prietary transfer fr0m
the existence 0r validity 0f a c0ntract as a gr0und f0r that pr0prietary transfer.193 The idea 0f a
c0nveyance being an independent "Real C0ntract", free fr0m a c0ntractual purp0se, was largely
the result 0f the influence 0f Savigny194 and the Pandectists,195 wh0 attempted t0 justify the
c0ncept 0f the abstract real c0nveyance 0n the basis 0f R0man Law by reinterpreting certain
passages in the Digests,196 f0r example, the fam0us c0ntr0versy between Ulpian 197 and Julian.198
There are s0me limitati0ns t0 this principle 0f abstract real c0nveyance. The parties t0 a c0ntract
are always free t0 stipulate that the validity 0f the c0nveyance depends 0n the validity 0f the
underlying c0ntract, which turns the c0nveyance effectively int0 a causal 0ne. In additi0n, certain
grave flaws 0f the c0ntract may als0 destr0y the c0nveyance (identity 0f defects in c0ntract and
c0nveyance, "Fehleridentitt"), such as the incapacity t0 c0ntract, 0r illegality 0f a c0ntract
acc0rding t0 134 BGB. If the c0ntract is v0idable because 0f mistake ( 119 BGB), 0r fraud (
123 BGB), a successful rescissi0n 0f the c0ntract can render the c0nveyance v0id, t00, th0ugh n0t
n0rmally in relati0n t0 third parties. Bef0re the rescissi0n, a third party can acquire 0wnership. 199
The transfer 0f 0wnership in a m0veable res in German law requires an (inf0rmal) agreement 0f
the parties200 that 0wnership shall pass in respect 0f a specific res (real c0ntract, dinglicher
Vertrag),201 and the handing 0ver 0f the res (delivery) as a factual act: h0wever, the physical
handing 0ver may be replaced by 0ne 0f the substitutes f0r physical delivery (bergabesurr0gate)
- traditi0 brevi manu ( 929 BGB, last sentence), c0nstitutum p0ssess0rium ( 930 BGB) - which
have been discussed ab0ve in the c0ntext 0f the acquisiti0n 0f p0ssessi0n. 202 A special case 0f
transfer 0f 0wnership is 931 BGB, whereby physical delivery is als0 substituted: this is the
assignment 0f the real acti0n 0f delivery (rei vindicati0 - Eigentumsherausgabeanspruch, 985
BGB) fr0m the 0ld t0 the new 0wner if the res is in the p0ssessi0n 0f a third pers0n. 203 Because 0f
this pr0visi0n, it is n0t necessary that the third party returns the res first, which the previ0us
0wner then hands 0ver t0 the new 0wner, wh0 passes the res back t0 the third pers0n. 204 A typical
example is the transfer 0f 0wnership in a res let t0 a third pers0n.

Whether there is physical 0r surr0gate 0r symb0lic delivery, in all cases the previ0us 0wner and
p0ssess0r must give up p0ssessi0n, and the acquirer must 0btain p0ssessi0n, being either direct
0r indirect,205 as a result 0f the previ0us 0wner's intenti0n t0 transfer p0ssessi0n
(Besitzbertragungswille des Veruerers).206 The transfer 0f 0wnership necessarily entails the
transfer 0f p0ssessi0n 0f a specific res. As a principal rule, the acquisiti0n 0f 0wnership entails the
extincti0n 0f pri0r restricted real rights (security rights etc.) which w0uld restrict the d0minium in
the transferred res, pr0vided the acquirer was in g00d faith in relati0n t0 the n0n-existence 0f
these rights ( 936).207
In principle, English law is aware 0f the distincti0n between c0ntract and c0nveyance. 208 That is
s0metimes expressed as the c0ntract c0nferring a ius ad rem, which is a pers0nal right, and the
c0nveyance c0nferring a ius in rem, which is the actual pr0perty right. 209 H0wever, the distincti0n
between c0ntract and c0nveyance is 0f little practical imp0rtance in English law because 0f the
general rule 0f c0nsensual c0nveyance in the Sale 0f G00ds Act 1979 which appears as the default
rule in ss. 17 and s. 18 (especially rule 1) in relati0n t0 specific g00ds. 210 The Sale 0f G00ds Act
which c0vers by far m0st transacti0ns inv0lving chattels c0ns0lidates the law in this respect, thus
earlier p0tentially different c0nveyance rules under the c0mm0n law 211 are n0 l0nger
applicable.212 Under s. 17, the real right (0wnership)213 passes when the parties intend it t0 be
transferred. In the absence 0f an intenti0n t0 the c0ntrary, the real right passes "when the
c0ntract is made, and it is immaterial whether the time 0f payment 0r time 0f delivery, 0r b0th, be
p0stp0ned", acc0rding t0 the presumptive rule 1 in s. 18. This at first sight relatively simple rule
indicates a far less s0phisticated the0retical superstructure 0f the c0nveyance than in German law.
The English system 0f transfer 0f 0wnership in chattels appears t0 be that 0f the c0nsensual
c0nveyance, in s0me way similar t0 French law,214 and is als0 m0re akin t0 the causal system, as
in Austria,215 than t0 the abstract system, as in Germany.216 But that w0uld be t00 simplistic: the
rule which g0verns the transfer 0f 0wnership is primarily left t0 the agreement 0f the parties,
c0mplemented by presumptive rules which c0ntinental Eur0pean lawyers w0uld call ius
disp0sitivum. 0ne may expect that in English law a v0id c0ntract, which is typically c0nflated with
the c0nveyance, w0uld als0 render the c0nveyance v0id. F0r the c0ntract c0uld be regarded as
acting as a iusta causa, which w0uld make the situati0n similar t0 a causal system. That is in fact
n0t necessarily s0: a v0id c0ntract d0es n0t aut0matically vitiate the c0nveyance. 217 This, in turn,
w0uld rather indicate features 0f an abstract c0nveyance, similar t0 Germany. But in English law,
unless a statute expressly 0r impliedly pr0vides 0therwise, even illegality d0es n0t render a
c0ntract v0id (0nly unenf0rceable), and under such an illegal c0ntract 0wnership rights can pass,
thus the c0nveyance remains valid.218 H0wever, illegality is the maj0r case where even in German
law there is a distinct p0ssibility that the illegal c0ntract may als0 destr0y the 0therwise detached
c0nveyance.219 The c0nceptual t00ls 0f the c0ntinental Eur0pean lawyer d0 n0t fit well f0r English
2. 0riginal acquisiti0n 0f 0wnership
a) Acquisiti0n in g00d faith fr0m a transfer0r with0ut 0wnership
The pr0blem is perceived in principle in the same way in English and in German law: the law has
t0 pr0vide a s0luti0n t0 the c0nflict 0f 0wnership claims between 0wner and transferee which arise
when a transfer0r, wh0 is n0t 0wner and n0t auth0rised by the 0wner t0 disp0se, transfers a
chattel t0 a b0na fide third pers0n.220 In s0me cases, the law c0nfers a better title 0n the b0na fide
third pers0n than the transfer0r actually has, as an excepti0n t0 the fundamental rule that n0b0dy
can give a better title than he himself p0ssesses, in English law 0ften als0 expressed as "nem0 dat
qu0d n0n habet".221 The end results are 0ften similar in b0th jurisdicti0ns, but the meth0ds which
bring ab0ut these results are n0t.
As already stated, in German law p0ssessi0n 0f a res entails the presumpti0n 0f 0wnership in it.
This general rule ( 1006 BGB) is 0ne 0f the f0undati0ns 0f the pr0visi0ns 0f acquisiti0n 0f
0wnership in g00d faith fr0m a n0n-0wning 0r 0therwise unauth0rised transfer0r under 932 GB,
in c0ntradicti0n with the principle 0f "nem0 plus iuris ad alium transferre p0test quam ipse
habet"222 0r, as an English lawyer w0uld say, "nem0 dat qu0d n0n habet". In case 0f a m0veable
res, p0ssessi0n and 0wnership 0ften d0 n0t c0incide, but it is virtually imp0ssible f0r a third
pers0n t0 ascertain the accurate legal situati0n with0ut insider kn0wledge 0f previ0us 0r current
legal transacti0ns in relati0n t0 the res, such as a reservati0n 0f 0wnership (retenti0n 0f title), 0r
the grant 0f direct p0ssessi0n 0f the res 0n the basis 0f a l0an f0r use (c0mm0datum, Leihe). Thus
the interest 0f the inn0cent acquirer prevails 0ver the rights 0f the 0wner in that the acquirer

0btains 0wnership fr0m a transfer0r with0ut actual entitlement but with apparent 0wnership, at
the expense 0f the 0wner, wh0 effectively bec0mes expr0priated. The m0st c0nvincing justificati0n
f0r this rather severe rule is that 0therwise trade and c0mmerce w0uld be stifled. German lawyers
s0metimes als0 state hist0ric reas0ns (especially the principle 0f 0ld Germanic law as expressed in
the legal pr0verb "Where y0u have left y0ur g00d faith, there y0u have t0 l00k f0r it" 223 - i.e. the
pers0n wh0m the 0wner has given the res), but d0ubts have been raised as t0 the true extent 0f
their influence.224
The principal rule 0f 932 BGB pr0vides that if a transfer0r delivers (in acc0rdance with 929
BGB) a res bel0nging t0 an0ther t0 a transferee, wh0 is in g00d faith, then the transferee acquires
0wnership in the res. The transfer0r (wh0 is n0t 0wner) 0f the res must be direct 0r, in s0me
cases, indirect p0ssess0r,225 0therwise there is n0 appearance 0f 0wnership represented by
p0ssessi0n, which justifies the acquisiti0n in g00d faith. The transfer0r must relinquish p0ssessi0n
entirely thr0ugh delivery, which can be by way 0f physical delivery 0r traditi0 brevi manu. The
transfer0r must hand 0ver the res t0 the acquirer wh0 must still be in g00d faith at the time 0f the
physical delivery ( 933 BGB). If the transfer is effected by a c0nstitutum p0ssess0rium, the
transferee cann0t acquire 0wnership in g00d faith. Arguably, the reas0n f0r this exclusi0n is that
the c0nstitutum p0ssess0rium al0ne d0es n0t change the apparent p0ssess0ry p0siti0n 0f the
transfer0r 0ver the res; it 0nly changes his legal status fr0m su0 n0mine t0 alien0 n0mine
p0ssessi0n in that he bec0mes direct p0ssess0r f0r the transferee as the new indirect p0ssess0r
su0 n0mine. Thus the transfer0r d0es n0t entirely relinquish p0ssessi0n, as h0wever required by
932 BGB.226 The fact that the c0nstitutum p0ssess0rium turns the acquirer int0 an indirect
p0ssess0r 0nly, whereby the transfer0r remains direct p0ssess0r, d0es n0t suffice f0r the
acquisiti0n 0f 0wnership.227 S0mewhat in c0ntrast t0 this rule,228 if the acquisiti0n 0ccurs by way 0f
an assignment 0f the real acti0n 0f delivery (acc0rding t0 931 BGB) fr0m the apparent previ0us
0wner t0 the acquirer, merely indirect p0ssessi0n is sufficient f0r the appearance 0f 0wnership as a
basis 0f acquisiti0n in g00d faith: if the transfer0r/assign0r is indirect p0ssess0r, then the b0na
fide acquirer bec0mes 0wner,229 if the transfer0r is n0t indirect p0ssess0r, then the acquirer 0btains
0wnership 0nly after he has als0 bec0me p0ssess0r,230 pr0vided he is still in g00d faith at the time
0f 0btaining p0ssessi0n ( 934 BGB).231
Acquisiti0n 0f 0wnership fr0m the transfer0r with0ut entitlement under 932 BGB requires a
c0ntract between transfer0r and transferee, and g00d faith 0n the part 0f the transferee at the
time 0f the transacti0n and until the last act 0f acquisiti0n. Thus acquisiti0n 0f 0wnership by
0perati0n 0f law (e.g. accessi0n), 0r with0ut g00d faith, is n0t pr0tected under 932 BGB.
H0wever, g00d faith is defined in relatively wide terms: 0nly where the acquirer kn0ws that the
transfer0r is n0t the 0wner, 0r is gr0ssly negligent232 in n0t kn0wing this fact, g00d faith is
precluded ( 932 (2) BGB).233 G00d faith is presumed; the true 0wner, wh0 disputes the validity 0f
the acquisiti0n, must pr0ve the c0ntrary ( 932 (1), first sentence). 234 The b0na fide acquirer must
believe in the transfer0r's 0wnership, g00d faith merely in the transfer0r's auth0rity t0 transfer
0wnership at the behest 0f the true 0wner (e.g. in case 0f an 0rder t0 sell within an agency) is n0t
sufficient f0r an acquisiti0n in private law under the BGB.235
If the res in questi0n has been st0len 0r l0st, then b0na fide acquisiti0n acc0rding t0 932 BGB et
seq. is n0t available ( 935 BGB). The idea behind this limitati0n is that the 0wner has n0t parted
with his direct p0ssessi0n deliberately, s0 that a third pers0n shall n0t have the benefit 0f the
appearance 0f entitlement thr0ugh p0ssessi0n under such circumstances. 236 H0wever, when direct
p0ssessi0n has been given up intenti0nally, b0na fide acquisiti0n is p0ssible even with0ut payment
in German law. If the acquisiti0n was gratuit0us, the 0riginal 0wner has a claim 0f unjust
enrichment against the acquirer under 816 (1) BGB, which is directed at the delivery and retransfer 0f 0wnership 0f the res t0 the 0riginal 0wner.237
English law sees the acquisiti0n 0f 0wnership in g00d faith fr0m the n0n-0wner as being within the
t0pic 0f the excepti0n t0 the nem0 dat rule, but the actual pr0visi0ns are split int0 three maj0r
areas: c0mm0n law, statute (Sale 0f G00ds Act 1979, Fact0rs Act 1889), and the law 0f trusts
because 0f the 0wner's p0tentially existing equitable right 0f tracing. 238 The rules are detailed and
casuistic, and they are 0nly 0utlined as far as necessary f0r c0mparative purp0ses. The c0mm0n
law excepti0ns t0 the nem0 dat rule are 0nly relevant where neither the relati0nship between
0wner and seller n0r between seller and buyer are transacti0ns which are c0ntracts 0f sale,
0therwise the Sale 0f G00ds Act w0uld apply.239 Such a situati0n is rare;240 thus the Sale 0f G00ds
Act will c0ver m0st transacti0ns. The Sale 0f G00ds Act 1979 (1893) and the Fact0rs Act 1889

have c0dified the 0ld c0mm0n law 0n the nem0 dat excepti0ns 241 and added further statut0ry
excepti0ns, and the f0ll0wing discussi0n will theref0re c0ncentrate 0n these tw0 statutes.
The (0riginally c0mm0n law) nem0 dat excepti0ns in the Sale 0f G00ds Act and the Fact0rs Act can
be gr0uped int0 three different themes: (1) acquisiti0n 0f g00d title based 0n agency (Sale 0f
G00ds Act, s. 21 (1)): a n0n-0wner can pass g00d title if he has actual 0r apparent (0stensible)
auth0rity fr0m the 0wner t0 disp0se; (2) acquisiti0n 0f g00d title based 0n the seller's apparent
0wnership because 0f the 0wner's c0nduct (Fact0rs Act, s. 2 (1)); (3) sale in market 0vert:
acquisiti0n 0f g00d title 0f g00ds s0ld in market 0vert, acc0rding t0 the usage 0f the market, by a
buyer in g00d faith with0ut any n0tice 0f a title defect 0n part 0f the seller (f0rmerly Sale 0f G00ds
Act, s. 22).242 This particular English243 rule, which permitted the acquisiti0n 0f g00d title in st0len
g00ds, dated back t0 the Middle Ages but was ab0lished fairly recently.244 The specific statut0ry
excepti0ns, which c0mplement the (restated) c0mm0n law excepti0ns t0 the nem0 dat rule, centre
especially ar0und the f0ll0wing t0pics: (1) sale by seller with v0idable title (Sale 0f G00ds Act, s.
23); (2) disp0siti0n by seller remaining in p0ssessi0n (Sale 0f G00ds Act, s. 24, Fact0rs Act, s. 8);
(3) disp0siti0n by buyer 0btaining p0ssessi0n (Sale 0f G00ds Act, s. 25, Fact0rs Act, s. 9). 245
An0ther characteristic aspect 0f acquisiti0n 0f g00d title in g00d faith is in the c0ntext 0f the law 0f
equity. The (equitable) 0wner-beneficiary can assert 0wnership 0ver his pr0perty transferred in
breach 0f trust246 in that he has the pr0prietary remedy t0 f0ll0w his equitable interest in the
pr0perty 0r t0 trace int0 the substitutes 0f the pr0perty, but 0nly until the legal title in the
pr0perty has passed t0 a b0na fide purchaser f0r value (i.e. n0t by way 0f a gift) and with0ut
n0tice 0f the earlier equitable interest. This b0na fide purchaser 0btains a better title than his
transfer0r had, and the 0riginal 0wner's right t0 f0ll0w 0r trace st0ps in fr0nt 0f him: the title
c0nflict has been s0lved against the 0riginal 0wner and in fav0ur 0f the b0na fide purchaser, wh0
takes free 0f the 0riginal 0wner's equitable interests and is s0metimes referred t0 as "equity's
darling" because 0f his privileged p0siti0n.247
0ne can see that n0t all the regulated incidents c0ver what German lawyers w0uld c0nsider as
issues 0f acquisiti0n in g00d faith fr0m the n0n-0wner. The areas 0f regulati0n 0verlap, but d0 n0t
c0incide when 0ne c0mpares the tw0 jurisdicti0ns. In fact, a meaningful c0mparis0n in this area is
particularly difficult, if n0t imp0ssible, but the pr0blem illustrates markedly well the very different
epistemic framew0rks 0n which b0th jurisdicti0ns rest. German law pr0vides a highly abstracted
rule in a c0dificati0n under which a variety 0f sets 0f facts can be dealt with, 248 while English law,
thr0ugh m0re casuistic lawmaking at a less high level 0f abstracti0n, regulates in the f0rm 0f
t0pics, which are narr0wer in sc0pe, c0mmercial scenari0s in several s0urces 0f law that 0ften
apply simultane0usly. The rules in equity, which are central t0 the nature and 0perati0n 0f English
law and which exist al0ngside the b0na fide purchaser rules in the statutes and 0riginally at
c0mm0n law, have n0 equivalent at all in German law, but a c0mparative study which ign0res
them t0 create tw0 matching sets 0f rules f0r the ease 0f c0mparis0n, dist0rts the image 0f
English law and its legal mentalit substantially. Furtherm0re, alth0ugh certain c0rresp0nding
elements can be f0und in the vari0us scenari0s 0f the Sale 0f G00ds Act and the Fact0rs Act and
the general rule 0f 932 BGB, the idea 0f reducing these characteristics t0 an abstracted c0mm0n
c0re 0f acquisiti0n in g00d faith rules in English and German law is arguably a scientifically
meaningless game f0r its 0wn sake. Neither legal culture 0perates and perceives itself in this way
and there is n0 need t0 describe such a n0n-existing artefact, unless it is d0ne as preparat0ry
w0rk f0r the purp0se 0f enacting harm0nising rules: but this example sh0ws that such
harm0nising rules in the quest f0r 0versimplifying sameness and unif0rmity w0uld necessarily
effect the partial destructi0n 0f either legal system. What a c0mparative lawyer can prepare is a
descripti0n 0f, and c0mmentary 0n, the similarities and, especially in the present case, differences,
with respect and understanding f0r b0th systems. 249
A general excepti0n t0 the nem0 dat rule c0mparable t0 German law d0es n0t seem t0 exist,
which reinf0rces the param0unt p0siti0n 0f the nem0 dat qu0d n0n habet principle in
England.250 English lawyers regard the German excepti0n t0 the nem0 dat rule in 932 BGB as
wider than in English law.251 A fairly general rule is s. 21 (1) 0f the Sale 0f G00ds Act: a n0n-0wner
can pass g00d title if he has actual 0r apparent (0stensible) auth0rity fr0m the 0wner t0 disp0se.
The 0wner by his 0wn c0nduct has held 0ut that the agent has 0wnership 0r auth0rity t0 sell and
is theref0re precluded fr0m denying that 0wnership 0r auth0rity.252 Ss. 24 and 25 0f the Sale 0f
G00ds Act253 perhaps c0me cl0se t0 the ambit 0f the German rule 0f 932 BGB, alth0ugh they
deal with special cases. In b0th jurisdicti0ns the excepti0ns rest primarily 0n the seller's apparent
0wnership f0r their 0perati0n, but the English rules als0 all0w apparent auth0rity 0f the n0n-0wner

(agent) t0 transfer 0wnership, unlike the German BGB. Apparent auth0rity is, h0wever, sufficient
under the German C0mmercial C0de, 366 HGB, under certain circumstances; 254 this separati0n
between the general private law (especially in the BGB) and c0mmercial law, the special private
law f0r merchants (especially in the HGB), is unkn0wn t0 English law. Unlike the German law, the
English rules d0 n0t dwell 0n the vari0us types 0f p0ssessi0n (in English law they w0uld be actual
and c0nstructive p0ssessi0n) that are available f0r acquisiti0n 0f 0wnership in g00d faith, but they
d0 take acc0unt 0f them indirectly. S. 24 0f the Sale 0f G00ds Act effectively deals with the special
case 0f a d0uble sale whereby the seller has transferred 0wnership derivatively t0 the first
buyer,255 but n0t actual p0ssessi0n, which c0uld p0ssibly be interpreted as c0nstructive delivery 0f
p0ssessi0n in the f0rm 0f what German lawyers w0uld call c0nstitutum p0ssess0rium, and then,
after having divested himself 0f the title, n0w transfers 256 actual p0ssessi0n257 and purp0rts t0
transfer 0wnership t0 the sec0nd buyer wh0 acquires 0riginally in g00d faith. Thus the sec0nd
buyer taking delivery acquires full title at the expense 0f the first buyer (referred t0 as the "0wner"
in s. 24) because this rule pr0tects the inn0cent purchaser wh0, misled by the seller's p0ssessi0n,
is unaware 0f the restricti0n 0n the seller's apparent p0wer t0 disp0se. 258 S. 25 als0 has a special
situati0n in mind: this pr0visi0n enables the buyer, wh0 has (under a sale 0r an agreement t0 buy)
0btained actual 0r c0nstructive p0ssessi0n 0f the g00ds with the seller's c0nsent, t0 c0nfer full
title t0 the subsequent buyer in g00d faith and with0ut n0tice 0f the previ0us sale, despite the fact
that the first buyer has 0btained a defective title fr0m the seller. This rule treats the seller's
c0nsent t0 the buyer taking p0ssessi0n as the seller's auth0risati0n t0 sell 0n, irrespective 0f the
seller's actual title 0r p0wer t0 disp0se.259 An imp0rtant c0nsequence is that if the seller sells under
a v0idable title and the buyer resells after the title has been av0ided, then the subsequent buyer
0btains full title and is pr0tected.260 A similar rati0nale f0rms the basis 0f s. 23 0f the Sale 0f
G00ds Act: After rescissi0n 0f a c0ntract the title will n0rmally revest in the 0riginal 0wner.
H0wever, if the b0na fide purchaser with0ut n0tice 0f the seller's v0idable title buys fr0m the seller
bef0re the c0ntract is av0ided, the purchaser 0btains g00d title. 261 In German law, the system 0f
unjust enrichment, in c0nnecti0n with the 0perati0n 0f the principle 0f abstract real c0nveyance,
w0uld pr0vide f0r a s0luti0n in c0mparable situati0ns.
Ss. 21, 24 and 25 0f the Sale 0f G00ds Act already sh0w that the English rules stress far m0re the
general subject 0f agency in this c0ntext and see the passing 0f title fr0m the unauth0rised
transfer0r as an instance 0f the agency relati0nship, rather than as a primarily free-standing
pr0visi0n 0f pr0perty law. This is m0re s0 the case with s. 2 (1) 0f the Fact0rs Act 1889: 262 A
mercantile agent, wh0 has g00ds in p0ssessi0n with the 0wner's c0nsent but n0 auth0rity t0
transfer, can c0nfer g00d title 0n a b0na fide purchaser with0ut n0tice 0f the agent's lack 0f
auth0rity. The pr0prietary aspect, the disp0siti0n, is merely a sub0rdinate event within the issue 0f
apparent auth0rity under the law 0f agency. H0wever, in b0th jurisdicti0ns the element 0f apparent
auth0rity 0r "appearance 0f having the right" (Rechtsschein) is the central reas0n f0r the
justificati0n 0f the excepti0n t0 the nem0 dat rule. 263 A detailed c0mparative analysis w0uld bring
t0 light m0re differences with regard t0 issues such as the quality 0f p0ssessi0n required 0r the
prerequisite 0f g00d faith. In German law, f0r example, gr0ss negligence is regarded as bad faith
f0r the purp0se 0f 932 BGB,264 while in English law negligence d0es n0t destr0y g00d faith, 265 as
l0ng as the purchaser is subjectively h0nest, albeit perhaps f00lish. This mirr0rs the fact that g00d
faith is a hist0rically fairly y0ung and by n0 means all-embracing c0ncept in English c0mm0n
law.266 The cl0se c0nnecti0n 0f g00d faith with taking "with0ut n0tice" is als0 characteristic 0f
English law.
b) Acquisiti0n by way 0f 0ccupancy, prescripti0n and accessi0n
Acquisiti0n in g00d faith, as discussed bef0re, results fr0m a c0ntract, but is a case 0f 0riginal
acquisiti0n 0f 0wnership 0f m0veable pr0perty, because the real right d0es n0t derive fr0m the
previ0us 0wner but arises by 0perati0n 0f law.267 The f0ll0wing acquisiti0n meth0ds 0f m0veables
in German law d0 n0t inv0lve a c0ntract: 0ccupancy; prescripti0n; specificati0n (accessi0n),
c0mmixti0n and c0nfusi0n. They are, unlike the s0mewhat excepti0nal b0na fide acquisiti0n, the
principal instances 0f 0riginal acquisiti0n 0f 0wnership 0f m0veable pr0perty, but (apart fr0m
accessi0n) in reality less imp0rtant, and they will be dealt with very briefly 0nly. Their legal
principles are als0 well d0cumented as fr0m the times 0f R0man law, and even writers 0n English
law tend t0 have a s0und and th0r0ugh gr0unding in R0man law when they embark 0n a
systematic study in this area.268
In German law, 0ccupancy (Aneignung) is regulated in 958-964 BGB, and the find 0f l0st
pr0perty (Fund) in 965-984 BGB. Any0ne can acquire 0wnership 0f a m0veable res, which is in

n0-0ne's 0wnership (res nullius), by way 0f 0ccupancy 0r 0ccupati0, that is, by appr0priating 0r
taking direct p0ssessi0n 0f it. The classical examples are wild animals 269 and aband0ned things.
The law relating t0 finds ( 965 et seq. BGB) deals with l0st pr0perty, where the 0wner has n0t
given up p0ssessi0n deliberately and is still c0nsidered as 0wner, s0 the thing is n0t res
nullius.270 The finder is under a duty t0 rep0rt the find t0 the auth0rities. The principal rules in
English law 0n 0ccupancy 0r taking p0ssessi0n 0f existing things with0ut an 0wner are generally
the same.271 As regards things l0st 0n land, the basic rule is that 0ccupati0n 0f land d0es n0t
aut0matically entail p0ssessi0n 0f things f0und 0n it: the 0ccupier must take active steps t0
exercise c0ntr0l 0ver them t0 0btain p0ssessi0n. 272 0nce he d0es that, he gets a p0ssess0ry title
and theref0re a better claim t0 the res than the finder.273
Acquisiti0n 0f 0wnership by prescripti0n presupp0ses that, in c0ntrast t0 a finder, the p0ssess0r 0f
the m0veable res must c0nsider himself reas0nably as the 0wner. The imp0rtance 0f prescripti0n
is mainly hist0rical. In Germany, the p0ssibility t0 acquire 0wnership 0f a m0veable res in g00d
faith ( 932 BGB) has restricted the relevance 0f prescripti0n even further. Acc0rding t0 937
BGB, the p0ssess0r wh0 has a m0veable b0na fide in p0ssessi0n f0r himself f0r ten years acquires
0wnership by way 0f prescripti0n (Ersitzung), pr0vided the p0ssess0r (inc0rrectly) believes that he
is the 0wner: that excludes bad faith 0r gr0ss negligence. 274 Prescripti0n in English law is mainly
imp0rtant in relati0n t0 land (especially easements).275 Prescripti0n in relati0n t0 chattels is dealt
with by way 0f the limitati0n 0f acti0ns rules, which give six years t0 claim the chattel 0r its
value.276As regards l0st things, the limitati0n peri0d 0nly starts running when the finder d0es
s0mething inc0nsistent with the 0wner's title, 277 but after the expiry 0f the limitati0n peri0d the
0wner is n0t 0nly denied the pr0cedural right t0 bring an acti0n, but als0 the substantive right 0f
Accessi0n br0adly deals with the pr0blem 0f 0riginal acquisiti0n 0f 0wnership in a thing, which has
been separated fr0m a principal thing, 0r which has been created 0ut 0f different pre-existing
materials (in a wide sense) bel0nging t0 different 0wners. In the f0ll0wing, accessi0n is used in a
wide meaning:279 it c0mprises the specificati0n (making a new thing 0ut 0f material bel0nging t0
an0ther), c0mmixiti0n (mixing 0f s0lids), c0nfusi0n (mixing 0f liquids), and accessi0n in the
narr0w sense (attachment 0f a m0veable thing t0 an imm0veable 0r m0veable, 280 accessi0n by
land t0 land (alluvi0n), and accessi0n by severance 0f fruits. Accessi0n is in reality especially
imp0rtant in the c0ntext 0f retenti0n 0f title clauses. 281 The accessi0n rules are intricate in the
details, but the present discussi0n can be c0nfined t0 a sh0rt 0utline, because a detailed
c0mparative study 0n parts 0f this subject has fairly recently been published, t0 which reference
may be made.282
In Germany, the meth0ds 0f acquisiti0n thr0ugh accessi0n (Zuwachs) are: Accessi0n/attachment
(Verbindung) 0f a m0veable with an0ther m0veable ( 947 BGB) 0r an imm0veable ( 946 BGB),
c0mmixti0n/c0nfusi0n (Vermengung/ Vermischung, 948), 283 specificati0n (Verarbeitung, 950
BGB), accessi0n by fruits (Fruchterwerb, 953-957 BGB). The rules 0n specificati0n ( 950 BGB)
are pr0bably the m0st relevant b0dy 0f law in the present c0ntext. They pr0vide that if a new
m0veable res is made 0ut 0f material bel0nging t0 an0ther, the maker 0r creat0r (Hersteller) 0f
the new thing acquires 0wnership in the materials. But if the value 0f the manufacturing 0r
transf0rmati0n is substantially l0wer than that 0f the material, then the maker d0es n0t acquire
0wnership ( 950 (1) BGB, 1st sentence).284 Interestingly, in the past attempts have been made t0
interpret this pr0visi0n as indicating the right 0f w0rkers t0 participate in the pr0fits 0f their
pr0ducts by virtue 0f their w0rk that has g0ne int0 the making 0f the pr0ducts, but it is
undisputed that 950 BGB did n0t envisage a decisi0n 0f s0cial p0licy and d0es n0t apply t0
empl0yer-empl0yee relati0nships.285 Creat0r is n0t the pers0n d0ing the (manual) w0rk, but the
0wner 0f the business in which the thing is pr0duced. 286 It is c0ntr0versial whether 0r n0t the rule
0f 0riginal acquisiti0n 0f 0wnership under 950 BGB can be altered by parties' agreement, as
s0me auth0rs maintain;287 a view which all0ws the validity 0f retenti0n 0f title clauses in fav0ur 0f
the 0wner 0f the material bey0nd the 0perati0n 0f 950. The d0minant view, h0wever, sees this
pr0visi0n as c0mpuls0ry,288 but permits several excepti0ns which effectively lead t0 an
appr0ximati0n 0f b0th views. C0urt decisi0ns d0 n0t fav0ur clearly 0ne 0r the 0ther 0pini0n. 289 The
0wner, wh0 l0ses 0wnership as a result 0f the 0perati0n 0f the accessi0n rules under 946-950
BGB, can claim c0mpensati0n acc0rding t0 the general rules 0f unjustified enrichment ( 812
BGB et seq. 290), h0wever, the 0wner cann0t claim the rest0rati0n t0 the previ0us p0siti0n ( 951
BGB).291 Thus the 0wner's real right is turned int0 an 0bligati0n directed at a pecuniary
indemnificati0n f0r the l0ss 0f his pr0prietary right. 292 This c0mpensati0n rule d0es n0t limit the
applicati0n 0f the law 0f t0rt.293

English law is unclear 0n the issue 0f specificati0n, but it seems t0 be settled that the 0wner 0f the
material l0ses 0wnership in fav0ur 0f the creat0r, which is essentially als0 the principal German
rule 0f 950 BGB.294 The main auth0rity f0r the rule that 0wnership 0f the new pr0duct vests
prima facie with the creat0r is B0rden (UK) Ltd v. Sc0ttish Timber Pr0ducts Ltd. 295 The creat0r can,
h0wever, attract a liability in c0nversi0n, 296 alth0ugh he may benefit fr0m a statut0ry all0wance if
he has acted in g00d faith.297 While f0r the German law it is s0mewhat unusual that the real right
is extinguished and turned int0 a pecuniary 0bligati0n, the t0rti0us, rather than pr0prietary,
pr0tecti0n against c0nversi0n is perfectly c0nsistent with the general pr0tecti0n mechanism 0f
pr0perty rights in English law.
Several types 0f security rights exist t0 secure debts. The pledge (pignus) is the 0ldest real right in
security in m0veables and theref0re discussed first.
1. Security rights
a) Pledge
Fr0m a functi0nal p0int 0f view, the pledge is pr0bably that type 0f pr0perty right where German
and English pr0perty laws cl0sely resemble 0ne an0ther. In b0th jurisdicti0ns, the essence 0f a
pledge is that the pledg0r transfers p0ssessi0n 0f the m0veable pr0perty/chattel which serves as
security, the pledge, t0 the pledgee credit0r wh0 0btains a restricted real right, 0r "special
pr0perty"298 in the pledge. This special pr0perty entitles the pledgee credit0r t0 sell the chattel 0n
the pledg0r's default and satisfy the debt.299 But even in this seemingly straightf0rward case the
presumpti0 similitudinis ign0res central distinguishing elements which build up the legal instituti0n
0f the pledge in either legal system.
In German law, the real right 0f a credit0r in a (n0rmally c0rp0real) m0veable res in security 0f a
debt is a pledge. The German law 0f pledges permits the creati0n 0f securities in c0rp0real
m0veables (Pfandrecht an beweglichen Sachen, 1204 et seq. BGB) and in rights 300 (debts,
ch0ses in acti0n: Pfandrecht an Rechten, 1273 et seq. BGB). It als0 distinguishes between
pledges created by agreement between the parties (rechtsgeschftlich bestelltes Pfandrecht,
1204-1256 BGB), and pledges by 0perati0n 0f law (either by statute: gesetzliches Pfandrecht,
1257 BGB, 0r by c0urt 0rder t0 enf0rce a judgment debt: Pfndungspfandrecht 301 ). The f0ll0wing
acc0unt 0nly discusses the pledge by agreement. These structural distincti0ns are inappr0priate in
English law, because debts 0r 0ther intangibles cann0t be pledged, 302 pledges are c0nsidered as
being created by c0ntract,303 and judgment debts are enf0rced thr0ugh mechanisms which are n0t
c0nsidered as instances 0f the pledge.304
The German law 0f pledges is based 0n f0ur principles:305 (1) the pledge is strictly sub0rdinate t0
the debt which it secures (Akzess0riettsprinzip, 1204, 1252 BGB). A pledge can 0nly arise in
relati0n t0 an existing, 0r at least future 0r c0nditi0nal, debt. The extincti0n 0f the debt (e.g.
discharge 0f a c0ntract by perf0rmance, set-0ff, waiver etc.) inevitably entails the
extincti0n/redempti0n 0f the pledge. The pledge can 0nly be transferred t0gether with the debt (
1250 BGB). (2) 0nly specific m0veables can be pledged. A creati0n 0f a pledge 0ver things in their
entirety, with0ut identifying a specific res t0 which the pledge shall attach, is imp0ssible (speciality
principle, Spezialittsgrundsatz), alth0ugh the law all0ws a security in c0llective entities 0f
m0veables, such as st0cks 0f g00ds, where the individual items are likely t0 change during the
lifetime 0f the pledge,306 pr0vided the requirements f0r the creati0n 0f pledges are satisfied in
relati0n t0 the new items.307 (3) the existence 0f a pledge must be made public, by transferring
p0ssessi0n t0 the credit0r which indicates the existence 0f the real right (publicity principle,
Publizitsgrundsatz). 0nly physical p0ssessi0n can indicate the security right, s0 the c0nstitutum
p0ssess0rium as a substitute f0r physical delivery is n0t available f0r the creati0n 0f pledges. A
pledge by way 0f an assignment 0f the real acti0n 0f delivery ( 931 BGB) 308 requires f0r its
validity the n0tificati0n 0f the third party wh0 p0ssesses the res f0r the creat0r 0f the pledge
(debt0r) ( 1205 (2) BGB). As s00n as the 0wner regains p0ssessi0n 0f the pledged res, the
pledge is extinguished, irrespective 0f whether this was with the security h0lder's c0nsent ( 1253
BGB). (4) the principle 0f pri0rity applies: if tw0 0r m0re pledges are created 0ver 0ne m0veable,
the first in time prevails and is satisfied first fr0m the pr0ceeds 0f sale 0f the m0veable. These f0ur
principles determine the rules 0n the creati0n and discharge 0f pledges.

In English law, as an0ther indicati0n 0f a dissimilar legal culture, there seem t0 be 0rganisati0nal
differences in the way in which the pledge is regarded within the wh0le b0dy 0f pers0nal pr0perty
law. The pledge (pawn309 ) is usually discussed in c0nnecti0n with the lien, whereby English
auth0rs stress that b0th the lien and the pledge are security rights f0unded 0n p0ssessi0n, and
b0th are types 0f bailment. The lien is c0ntrasted with the pledge in that the pledge gives a
pr0perty right with an inherent p0wer 0f sale, which the lien d0es n0t. The pledge can als0 slide
int0 the m0re p0werful n0n-p0ssess0ry security right 0f an equitable m0rtgage 0ver pers0nal
pr0perty (chattel m0rtgage) if a d0cumentary intangible is dep0sited with a credit0r as a security
f0r the repayment 0f a debt.310 This kind 0f c0nceptual c0ntext 0f lien-pledge-equitable m0rtgage,
whereby the pledge is regarded as the security 0f intermediate strength between the 0ther
tw0,311 d0es n0t exist as such in German d0ctrine; furtherm0re, there is n0 equivalent t0 an
equitable m0rtgage 0ver m0veables in German law.
The f0ur principles 0f the German pledge d0 n0t mirr0r exactly in English law. The first principle
c0rresp0nds m0st t0 the situati0n in English law: repayment 0r perf0rmance as t0 the secured
(underlying) debt leads t0 the pledg0r's right t0 redeem his pledged res which extinguishes the
pledge.312 This is als0 expressed as an implied undertaking 0f the pledgee t0 return the pledged res
t0 the pledg0r 0n repayment. The undertaking is n0t perceived as c0ntractual but arises fr0m the
pledg0r's 0wnership right ("general pr0perty").313 Nevertheless, this c0ncept d0es n0t exactly
reflect the n0ti0n 0f the invariably dependent sub0rdinate real right in German law, but rather
suggests an implied c0nditi0n subsequent that terminates the pledgee's pr0perty right in the res.
The pledge tends t0 be m0re disc0nnected fr0m the secured debt in English law. Thus, unlike in
German law ( 1250 BGB), the pledge can be transferred with0ut the secured debt: regardless 0f
whether such disp0siti0n 0f the pledge has 0ccurred with the pledg0r's auth0rity, it is valid, but the
pledg0r can then always rec0ver his pledged res 0n payment 0f the am0unt 0wed t0 the new
(sub)pledgee,314 alth0ugh that new pers0n may n0t be the pledg0r's new credit0r/assignee. As t0
the sec0nd principle, there d0es n0t seem t0 be a clear equivalent t0 the German requirement that
0nly specific m0veables can be pledged.315 The pr0blem is 0f little practical relevance in English law
because 0f the availability 0f the fl0ating charge, a right t0 have specified pr0perty 0f the debt0r
applied t0 the discharge 0f the debt. 316 The German speciality principle, a legacy fr0m R0man law,
stands against the device 0f the fl0ating charge, 317 alth0ugh there are functi0nal similarities
between the fl0ating charge and the German security in c0llective entities 0f m0veables. The
criteria f0r creating this kind 0f pledge (delivery t0 credit0r, 1205 BGB) in German law insist 0n
transfer 0f p0ssessi0n and are stricter than f0r the fl0ating charge in English law, because the
fl0ating charge is, when created, n0t an actual, but p0tential, "d0rmant", 318 and n0n-p0ssess0ry
security which d0es n0t c0nfer a real right at this stage. It crystallises in case 0f a default 0f the
debt0r and 0nly then bec0mes an actual security right. Thus the creati0n 0f the fl0ating charge
need n0t be dependent 0n the strict speciality principle; in fact, an identificati0n 0f a class 0f
assets usually suffices.319
Third, as in German law, transfer 0f p0ssessi0n is indeed required t0 create an English pledge, and
p0ssessi0n advertises the security right t0 third pers0ns. 320 But the requirement 0f p0ssessi0n is
much m0re flexible than in German law, in that als0 c0nstructive p0ssessi0n may be c0nferred,
and that categ0ry includes cases where the 0wner 0f g00ds in p0ssessi0n ackn0wledges his
credit0r's p0ssess0ry title and subsequently h0lds the g00ds as bailee 0f the credit0r, wh0
bec0mes p0ssess0r and pledgee in law. In this way the law c0nfers a secured interest 0n a credit0r
wh0 never receives physical p0ssessi0n 0f the pledged res. 321 That scenari0, which als0 resembles
the German c0nstitutum p0ssess0rium, w0uld n0t be permitted f0r the creati0n 0f a pledge in
German law. As the pr0tecti0n mechanism in English law f0r pr0perty rights differs widely fr0m
German law,322 there is n0 real acti0n 0f delivery and theref0re n0 equivalent t0 the German
creati0n 0f a pledge by transfer 0f the real acti0n and n0tificati0n under 1205 (2) BGB. The
principle 0f pri0rity generally applies in English law,323 but the real relevance 0f this rule in the
present c0ntext is in relati0n t0 c0nflicts between a pledge and a fl0ating charge. The pledgee
takes pri0rity 0ver the fl0ating charge h0lder if the charge was granted bef0re but crystallised
after the creati0n 0f the pledge (which requires delivery 0f p0ssessi0n in the wide sense described
ab0ve f0r perfecti0n).324
It f0ll0ws fr0m the systematised nature 0f German law that a clear n0ti0nal distincti0n between
the c0ntractual and the pr0prietary elements 0f the pledge is carefully made, and that the law 0f
pledges rests 0n general c0ncepts and rules 0f 0wnership transfer t0 which it makes br0ad
reference. This area 0f the law is an example 0f the way in which German law is l0gically
c0nstructed; the instituti0ns 0f p0ssessi0n, 0wnership, derivative acquisiti0n and 0riginal

acquisiti0n 0f 0wnership in g00d faith are interc0nnected with the law 0f pledges which cann0t be
underst00d with0ut a g00d c0mprehensi0n 0f these c0ncepts. A pledge is created
(Pfandbestellung) by an agreement (real c0ntract325 ) between the parties that the credit0r shall
0btain a pledge, and by the delivery 0f the pledged res fr0m the 0wner 0f the res t0 the credit0r
( 1205 BGB). This is much in the same way as the derivative transfer 0f 0wnership under 929,
931 BGB,326 because the creati0n 0f a pledge is c0nsidered as splitting 0ff and transferring this
limited real right fr0m the m0re extensive real right 0f 0wnership. 327While the pledgee must be the
credit0r 0f the secured debt, the pledg0r need n0t be the debt0r, n0r the 0wner 0f the pledged
thing, alth0ugh that will usually be the case. Quite c0mplicated scenari0s are, h0wever, p0ssible: a
debt between credit0r C and debt0r D is secured by the res which 0 0wns and gives as pledge (i.e.
t0 secure s0me0ne else's - D's - debt); 0r, the pledg0r P secures a debt between C and D (0r P) by
giving a m0veable 0wned by 0 as a pledge.328 In the last case, h0wever, the 0wner 0 must have
c0nsented t0 the creati0n 0f the pledge (e.g. in an agency relati0nship). If the pledg0r is n0t the
0wner and n0t auth0rised, the pledge can 0nly be created if the pledgee (credit0r) was in g00d
faith as t0 the 0wnership329 0f the pledg0r in the pledged res. The b0na fide acquisiti0n 0f a pledge
f0ll0ws the rules 0n the acquisiti0n 0f 0wnership in g00d faith fr0m a transfer0r with0ut title (
1207 referring t0 932, 934, 935 BGB).330 The pledge creates an 0bligati0n between the pledg0r
(even if that is an unauth0rised n0n-0wner! 331 ) and the credit0r ( 1214 et seq.). This statut0ry
0bligati0n determines the rights and resp0nsibilities 0f pledg0r, 0wner and credit0r 0f the pledge.
The creati0n 0f a pledge requires the existence (0r at least future 0r c0nditi0nal existence) 0f a
debt t0 be secured ( 1204 (2) BGB).332 If the debt is assigned, the pledge is aut0matically
transferred t0 the assignee with0ut the need 0f a physical delivery 0f the pledged res. If the
assign0r and assignee exclude the passing 0f the pledge with the assignment 0f the debt, the
pledge is extinguished ( 1250 (2) BGB): as a restricted and sub0rdinate real right, it cann0t exist
with0ut the right which it secures. 0nce the pledge is created by delivering the res t0 the credit0r,
the credit0r is entitled t0 p0ssessi0n and, if stipulated, t0 the fruits ensuing fr0m the use 0f the
res ( 1213 BGB),333 and he assumes the resp0nsibility 0f a bailee ( 1215 BGB). 0therwise the
credit0r/pledgee enj0ys the same pr0tecti0n as the 0wner ( 1227 BGB 334). 0nce the pledge is
extinguished, the pledg0r can claim that the pledged res be returned ( 1223 BGB). If the 0wner
0f the pledged thing and the debt0r are n0t the same pers0ns, the 0wner can claim his expenses,
typically the value 0f the pledge, fr0m the debt0r in case 0f a sale 0r aucti0n 0f the pledged thing
( 670 BGB). The 0wner can als0 prevent the aucti0n 0r sale, and effect the rec0very, 0f his res by
satisfying the 0utstanding debt himself; in that case the debt0r and the credit0r must accept the
0wner's payment as s00n as the debt0r w0uld be permitted t0 make payment ( 1223 (2) BGB,
Einlsungsrecht). The 0wner's payment effects a subr0gati0n: he 0btains the debt fr0m the
satisfied credit0r ( 1225 BGB).335
The discharge 0f the secured debt leads t0 an extincti0n 0f the pledge ( 1252 BGB). Even where
the secured debt c0ntinues t0 exist, the pledge c0mes t0 an end if the credit0r returns v0luntarily
the pledged res t0 the pledg0r 0r 0wner,336 because thr0ugh this act the pledgee has l0st
p0ssessi0n, 0ne 0f the pre-requisites f0r the subsistence 0f the pledge ( 1253 (1) BGB). 337
English law is aware 0f the difference between the pledge as a c0ntractual agreement and as a
pr0perty (right),338 but it d0es n0t apply the German level 0f abstracti0n. The c0nceptual emphasis
0n delivery 0f p0ssessi0n f0r the creati0n 0f the pledge als0 exists in English law, but the actual
requirement 0f p0ssessi0n is much m0re diluted. 339 Furtherm0re, the pledgee has a transferable
pr0prietary interest, referred t0 as "special pr0perty", as 0pp0sed t0 the "general pr0perty" 0f the
0wner/pledg0r, and this quality distinguishes it c0nsiderably fr0m German law. English lawyers
argue that this "special pr0perty" is a pr0perty right,340 which w0uld als0 be 0bvi0us t0 the Civilian
lawyer, but the reas0ns given w0uld be quite unfamiliar t0 him/her. English lawyers see special
pr0perty in the c0ntext 0f p0ssessi0n which has a very cl0se ass0ciati0n with 0wnership in English
law, as has been sh0wn.341 N0t 0nly p0ssessi0n, als0 0wnership is a relative c0ncept in that the
pers0n with the better right as between tw0 (p0tentially) adversarial parties is regarded as the
0wner. The p0ssess0ry p0siti0n 0f the pledgee as special pr0perty h0lder in relati0n t0 the pledg0r
is s0 str0ng, in that he enj0ys s0 many 0f the incidents 0f 0wnership, that he can be regarded as
having (qualified) pr0perty.342 The pr0prietary nature 0f the pledgee's interest is sh0wn by the fact
that the pledge survives a sale 0f g00ds by the pledg0r even th0ugh the buyer is unaware 0f the
pledgee's interest,343 and that the pledgee can sue a third pers0n f0r wr0ngs inflicted 0n the res in
his p0ssessi0n, much in the same way as the 0wner.344 The pledgee can als0 disp0se 0f his
pr0prietary interest, even in breach 0f the terms with the pledg0r, either by assigning it 0r by subpledging the pledged res t0 create a security 0f his 0wn. 345 Even if these c0ncepti0ns may partly

lead t0 similar 0utc0mes, they are alien t0 a German lawyer, because the German Civilian n0ti0n
0f 0wnership is c0nceptually much separated fr0m p0ssessi0n, and is abs0lute d0minium, n0t
relative title; and the pledge cann0t be disp0sed 0f separately, despite its pr0prietary quality,
because the existence 0f the sub0rdinate real right necessarily depends 0n the underlying debt
which the pledge secures.346 The transferability 0f the right that the pledge c0nfers in English law
changes significantly the nature 0f this security right and the c0nnected remedies.
English law d0es n0t seem t0 c0nsider in t00 much detail the rather academic case 0f a pledg0r
wh0 is n0t als0 debt0r. English auth0rs w0uld phrase this pr0blem as a questi0n whether the
credit0r's p0ssessi0n is lawful as against a third pers0n with a better title than the debt0r.347 If the
debt0r creates a pledge within his auth0rity 0r with the 0wner's c0nsent, then the situati0n is
unpr0blematic.348 If n0t, English law seems t0 s0lve the matter in the indeed practically m0st
relevant c0ntext 0f a mercantile agent's dealings with g00ds and the excepti0ns t0 the nem0 dat
rule under s. 2 (1) 0f the Fact0rs Act 1889,349 and n0t under a general principle 0f 0riginal
acquisiti0n 0f 0wnership in g00d faith, as is under German law.350 If the unauth0rised 0r even
fraudulent creati0n 0f the pledge c0uld be c0nsidered as having 0ccurred in the "n0rmal c0urse 0f
business 0f a mercantile agent" (meaning business-like behavi0ur c0mm0n t0 agents in general),
and the third party was acting in g00d faith with0ut n0tice, then the pledge is valid. 351 This
example is a g00d illustrati0n 0f the different legal cultures in English and German law: English
auth0rs d0 n0t discuss the present issue in the c0ntext 0f the law 0f pledges. 352 English law
c0nsiders legal pr0blems as t0pical and s0lves them in a limited c0ntext arising fr0m practical
c0mmercial circumstances. German law applies generally deduced legal principles as building
bl0cks t0 different practical scenari0s.
0nce the pledge is created, the pledgee has the duties 0f a bailee 353 and is n0t n0rmally entitled t0
use the pledged res, unless specifically agreed, 354 similar t0 German law. A difference t0 German
law is, h0wever, that, due t0 the m0re diluted requirement 0f p0ssessi0n f0r the creati0n 0f a
pledge, c0ntinuity 0f p0ssessi0n is n0t br0ken if the pledged res is released by the pledgee t0 the
debt0r f0r a defined purp0se n0t inc0nsistent with the pledge. 355 Thus the pledge interest d0es n0t
depend 0n c0ntinued p0ssessi0n by the pledgee, which als0 explains the pledgee's right t0 subpledge (up t0 the am0unt secured by the 0riginal pledge). 356
Under German law, if the secured debt remains unsatisfied, the credit0r can seek the sale 0f the
pledged res and 0btain payment fr0m the pr0ceeds 0f sale. An agreement made bef0re the debt
has bec0me due, t0 the effect that the credit0r shall bec0me the 0wner 0f the pledged res if the
debt0r d0es n0t discharge, is v0id ( 1229 BGB, pr0hibiti0n 0f the "lex c0mmiss0ria" 0r
Verfallspfand). The law enables the credit0r t0 sell the res, n0rmally 357 in an aucti0n in acc0rdance
with the requirements under 1236 et seq. BGB 358). The legal mechanism c0ncerning the
pr0ceeds fr0m the sale 0f the pledged res is rather difficult: The buyer bec0mes 0wner 0f the
pledged res as if he had acquired it fr0m the 0wner ( 1242 BGB), and the credit0r bec0mes the
0wner 0f the pr0ceeds 0f sale t0 the extent 0f his entitlement (acc0rding t0 the am0unt 0f debt
and pledge). The law presumes the debt as being discharged by the 0wner 0f the pledged res vis-vis the credit0r up t0 the 0utstanding sum: thus t0 that extent, the credit0r is 0wner 0f the
pr0ceeds which he can keep ( 1247 BGB). If, and t0 the extent that, the credit0r is n0t entitled t0
the pr0ceeds, such pr0ceeds bel0ng t0 the 0wner, as they are c0nsidered as representing the
0wner's pledged res (Surr0gati0n). This can happen if the sale is based 0n a v0id pledge (n0
entitlement 0f the credit0r t0 the pr0ceeds at all), 0r the pr0ceeds exceed the am0unt 0f the debt
(n0 entitlement t0 the excess). In this way, the 0wner 0f the pledged, and n0w s0ld, res 0btains a
pr0prietary pr0tecti0n against a credit0r with0ut entitlement, manifested in his real (n0t pers0nal)
right t0 the pr0ceeds 0f sale, because 0therwise the credit0r w0uld aut0matically bec0me the
0wner 0f the sums paid t0 him by virtue 0f 929 BGB (i.e. the general rule 0f derivative
acquisiti0n). Where the pr0ceeds 0f sale exceed the am0unt 0f the debt, then c0-0wnership 0f the
pr0ceeds arises between the credit0r and the f0rmer 0wner 0f the pledged res. 359 The 0wner can
claim the exceeding sum fr0m the credit0r, subject t0 the credit0r's pri0r (real) right t0 satisfy his
debt fully fr0m the pr0ceeds 0f sale.360
The c0mplicated legal technique regarding the pr0ceeds 0f sale in German law, which seeks t0 give
the 0wner-pledg0r a pr0prietary right t0 the pr0ceeds 0f sale t0 the extent t0 which they are n0t
c0vered by the debt that they are supp0sed t0 discharge, c0ntains elements 0f the idea 0f tracing
0f pr0perty int0 its representing substitutes f0ll0wing a breach 0f trust in English law. 361 It is als0
functi0nally n0t t00 dissimilar t0 the 0verreaching 0f an equitable interest behind a trust 0f land in
English land law, whereby the interest attaches t0 the pr0ceeds 0f sale instead 0f the s0ld

pr0perty,362 which enables the buyer t0 acquire unencumbered 0wnership. But 0ne sh0uld be
cauti0us with such an anal0gy. German pr0perty law d0es n0t rec0gnise a divisi0n int0 legal and
equitable 0wnership,363 and theref0re d0es n0t have the c0ncept 0f a trust which c0nfers
pr0prietary rights (in equity) and g0es bey0nd that 0f a mere fiducia 364 (based 0n pers0nal rights
0nly). When determining the entitlement 0f the 0wner-pledg0r t0 the pr0ceeds 0f sale, German
law res0rts t0 an excepti0nal technique which seeks t0 emulate in effect a mechanism that is a
very familiar part 0f English law: an imp0siti0n 0f a trust 0n the pledgee-credit0r with the 0wner
as beneficiary wh0se pledged res is substituted by the pr0ceeds 0f sale and subject t0 the 0wnerpledg0r-beneficiary's right t0 trace. Indeed, English law regards the relati0nship between pledg0r
and pledgee as a fiduciary 0ne,365 under which the pledgee has t0 pay the surplus fr0m the sale. If
he d0es n0t d0 s0, he must pay interest in equity t0 the pledg0r.366 This reference t0 equity is
remarkable because the pledge 0riginates in c0mm0n law 367 and the pledgee's duty 0f care is
c0nsidered as deriving fr0m c0mm0n law with0ut (much) interventi0n fr0m equity.368 This is
pr0bably the reas0n why the relati0nship between pledg0r and pledgee is seen as fiduciary, and
n0t 0penly termed as 0ne 0f trust, the m0st eminent creature 0f equity (alth0ugh a trustee is
invariably als0 a fiduciary 369). These subtleties that are characteristic 0f English law make n0 sense
t0 the German lawyer, but if they are blanked 0ut in a functi0nal appr0ach 0f c0mparis0n, 0ne
0btains a false picture. 0therwise, the pr0cess 0f the sale 0f a pledged res in English law is n0t
significantly different fr0m German law in its principles. The pledgee has an implied p0wer 0f sale
at c0mm0n law which bec0mes exercisable when the debt is due and the debt0r defaults. The sale
d0es n0t have t0 be at an aucti0n, but the pledgee must take care t0 ensure that the sale is
carried 0ut reas0nably t0 0btain a fair market price.370
b) Transfer 0f 0wnership in a m0veable f0r security purp0ses
The strict requirement f0r the validity 0f a pledge, t0 grant the credit0r p0ssessi0n, prevents the
debt0r fr0m using the pledged pr0perty and fr0m 0btaining a pr0fit 0ut 0f which he can pay his
debts, and it als0 publicises the fact 0f pledging, which all0ws adverse inferences as t0 the
debt0r's creditw0rthiness.371 Attempts t0 av0id these undesired effects have led t0 0ther meth0ds
f0r the creati0n 0f security rights 0ver m0veables. In Germany, the need f0r new f0rms 0f security
has been greater than in England, because the delivery 0f p0ssessi0n rule has t0 be adhered t0
m0re strictly.
In Germany, such f0rms 0f security were devel0ped fairly s00n after the enactment 0f the BGB,
and 0utside its legal framew0rk, but they were relatively quickly end0rsed by the c0urts, which
ensured their enf0rceability.372 0ne type 0f these security rights n0t based 0n the system 0f the
pledge is the transfer 0f 0wnership in a m0veable thing t0 the credit0r f0r the security 0f a debt
that is 0wed t0 him by the 0wner 0f the transferred res, 0r by an0ther debt0r
(Sicherungsbereignung).373 (F0r the sake 0f c0nvenience, in the f0ll0wing the identity 0f the
debt0r and 0wner 0f the transferred res will be assumed.) In business reality, it is this meth0d, n0t
the pledge, which is the usual way 0f granting security rights 0ver m0veables. 374 The 0wner-debt0r
c0nveys 0wnership in the res t0 the credit0r typically by way 0f c0nstitutum p0ssess0rium ( 930
BGB),375which enables the credit0r t0 acquire 0wnership while the debt0r retains p0ssessi0n and
use 0f the thing.376 The c0nveyance is c0nditi0nal 0n the full satisfacti0n 0f the debt; thus 0nce the
debt is extinguished, 0wnership 0f the res is either aut0matically re-transferred (c0nditi0n
subsequent), 0r the credit0r is under an 0bligati0n t0 re-transfer, depending 0n the stipulati0ns in
the security c0ntract 0f the parties. This security c0ntract (Sicherungsvertrag), which is
independent 0f any c0ntract 0ut 0f which the secured debt arises (e.g. a l0an), may 0blige the
debt0r (i.e. previ0us 0wner) t0 refrain fr0m wasteful treatment 0f the res and t0 insure it, and it
0bliges the credit0r (new 0wner) t0 re-c0nvey 0wnership 0n satisfacti0n 0f the debt, t0 sell it
acc0rding t0 certain stipulati0ns 0n default 0f payment etc. 377
As full 0wnership is transferred, this type 0f security is n0t a restricted real right, depending 0n the
existence 0f the secured debt. If the debt d0es n0t arise, 0r is extinguished, prima facie the
security right remains in existence, and is subject t0 the c0ntractual stipulati0ns 0f the security
c0ntract (e.g. re-transfer 0f 0wnership based 0n an express 0bligati0n t0 that effect, 0r 0n a
c0nditi0n subsequent, which will n0t be implied if it has n0t been stipulated 378).
Since the credit0r bec0mes 0wner 0f the res, subject t0 merely c0ntractual 0bligati0ns which
restrict his p0wer t0 disp0se 0f the res t0 the event 0f default, the credit0r assumes the p0siti0n
0f a fiduciary. Thus, even if in breach 0f the security agreement with the debt0r-beneficiary
(because the debt has n0t matured 0r has been paid in full), he can validly transfer 0wnership in

the res t0 a third party. Unlike an English trust, where the debt0r-beneficiary 0btains an equitable,
that is pr0prietary, interest, which is enf0rceable against third parties and traceable (with
restricti0ns 379), the German trust relati0nship is a merely fiduciary 0ne (Treuhand), 380 and a
pers0nal right is given t0 the debt0r enf0rceable in c0ntract381 (damages f0r breach 0f c0ntract
etc.). This trust relati0nship is rec0gnised in the event 0f the credit0r's ins0lvency. Pr0vided the
debt0r has satisfied the secured debt (by paying the liquidat0r 0f the ins0lvent estate if
necessary), the debt0r can assert 0wnership 0ver the res c0nveyed f0r security purp0ses against
the third-party credit0rs 0f the ins0lvent estate and claim it back. 382
The purp0se 0f a security by 0utright transfer 0f 0wnership is that, unlike in the case 0f a pledge,
the credit0r 0btains a "secret" security, which d0es n0t bec0me apparent, when the security is
granted (n0 change 0f p0ssessi0n), but which shall c0me int0 effect when the debt0r is in default,
and which shall give the credit0r an advantage 0ver 0ther credit0rs 0f the debt0r, particularly
when the debt0r bec0mes ins0lvent. The credit0r and recipient 0f the security cann0t seize the res
given as a security, as 0ne w0uld n0rmally expect, given that he is technically its 0wner, because
the ins0lvency laws take acc0unt 0f the fiduciary nature 0f this c0nveyance. H0wever, after the
realisati0n 0f the res by the liquidat0r, the secured credit0r has a right t0 0btain payment fr0m the
pr0ceeds 0f the sale ahead 0f 0ther (unsecured) credit0rs 0f the ins0lvent estate, 383 similar t0 a
pledgee. The secured credit0r can n0 l0nger effect the sale 0f the res himself,384 this must be d0ne
by the liquidat0r.385
The device 0f the transfer 0f 0wnership f0r security purp0ses is an example 0f the fact that
c0mparative lawyers will s0metimes fail in finding an equivalent 0f a certain legal instituti0n in
an0ther jurisdicti0n. There is n0 need f0r such a security mechanism in English law. First, the
English pledge, despite its requirement t0 deliver p0ssessi0n, permits changes 0f p0ssessi0n in
f0rms c0mparable t0 the c0nstitutum p0ssess0rium in German law, thus all0wing n0 change 0f
factual p0ssessi0n, and the pledge interest d0es n0t depend 0n c0ntinued p0ssessi0n by the
pledgee.386 English law als0 rec0gnises the n0n-p0ssess0ry (legal 0r equitable) chattel m0rtgage
which all0ws the debt0r t0 c0ntinue using the res, but actually transfers 0wnership t0 the credit0r
by way 0f security.387 (The 0utright transfer 0f 0wnership is n0t available f0r m0rtgages 0ver
land.388 ) Alth0ugh l00king similar in respect 0f their n0n-p0ssess0ry nature, it is n0t the same as
the German security right. The English chattel m0rtgage d0es n0t have the specific fiduciary
relati0nship that the German Treuhand at the centre 0f the Sicherungsbereignung has.
C0nversely, the German m0rtgage 0r Hyp0thek is a n0n-p0ssess0ry sub0rdinate real right which
d0es n0t c0nfer 0utright 0wnership and is 0nly available f0r land. 389 A trust relati0nship f0r security
purp0ses can be established in English law: this creates a beneficial interest which survives the
trustee's-credit0r's ins0lvency. 0ne c0mm0n example is the Quistcl0se trust, 390 a device whereby
(usually) l0an m0ney advanced t0 a c0mpany in financial difficulties is ring-fenced against the
c0mpany's p0ssible ins0lvency by giving the l0an 0n the c0nditi0n that it be used f0r a specified
purp0se 0nly. The m0ney is held 0n trust f0r the lender until the purp0se has been carried 0ut. If
the purp0se cann0t be achieved, the recipient 0f the l0an (0r his liquidat0r) must return the funds
in specie.391 In such an arrangement, there is n0 need that additi0nally a chattel (as a quasipledge) is transferred t0 the credit0r as a security f0r the debt. 392 Furtherm0re, English law als0
has the n0n-p0ssess0ry instituti0n 0f the equitable charge as a security interest. The equitable
charge,393 which can be a fixed 0r fl0ating charge, d0es n0t c0nfer p0ssessi0n 0r 0wnership, but
entitles the chargee t0 have specified pr0perty 0f the debt0r applied t0 the discharge 0f the
debt.394 All these security interests are familiar t0 the English reader and need n0t be discussed
further. H0wever, this case sh0ws that it can be highly misleading if elements 0f c0nceptually and
c0ntextually very different and unrelated legal devices in 0ne jurisdicti0n are arranged in
acc0rdance with the c0mprehensive legal instituti0n 0f an0ther jurisdicti0n in 0rder t0 seek a kind
0f "c0mm0n c0re" which yields similar ec0n0mic 0utc0mes.
c) Assignment 0f a debt f0r security purp0ses
The assignment 0f a debt f0r security purp0ses als0 sh0ws that German law was pr0mpted t0 find
meth0ds t0 secure 0bligati0ns which permitted a greater elasticity than pledges. In the discussi0n
0f the German law 0f pledges,395 it was menti0ned that rights arising fr0m a c0ntract can be
pledged, but that matter was n0t dealt with further because in practice, the pledge 0f rights has
alm0st t0tally been replaced by the assignment 0f debts f0r security purp0ses
(Sicherungsabtretung, Sicherungszessi0n). 396 Alth0ugh rights are n0t things in the system 0f the
BGB ( 90 BGB), German academic d0ctrine discusses this legal instituti0n within the law 0f

pr0perty f0r practical reas0ns, especially as it usually f0rms part 0f the transfer 0f m0veables f0r
security purp0ses and 0f retenti0n 0f title stipulati0ns.
The assignment 0f a debt as a security resembles cl0sely the transfer 0f a m0veable res as a
security; the difference is 0nly that in the present case the security given is a debt, 0f which the
debt0r is credit0r vis--vis a third party. The parties inv0lved are, the credit0r C in relati0n t0 a
secured debt (x) (recipient 0f an0ther debt (y) given as a security), the debt0r D (debt0r 0f (x)
assigning the debt (y), 0f which he is the credit0r), and the third-party debt0r DD (debt0r 0f D in
relati0n t0 the debt (y)). The principal debt0r D assigns his right (y) against DD t0 C t0 secure his
debt (x). As with the transfer 0f 0wnership in m0veable things, the credit0r C can validly claim
payment397 fr0m DD, alth0ugh that may be in breach 0f the security agreement with D, which
g0verns the c0ntractual relati0nship between C and D and sets 0ut C's p0wers and their limits. In
case 0f default, C is n0rmally entitled t0 ch00se which debt he wants 0btain payment fr0m, either
the secured debt (x), 0r the securing debt (y): there is n0 0bligati0n t0 try t0 get paid thr0ugh the
secured debt first, unless the security agreement stipulates this. 398 In case 0f satisfacti0n 0f the
secured debt (x), the debt (y) is re-assigned aut0matically due t0 a c0nditi0n subsequent, 0r there
is an 0bligati0n t0 re-assign (either based 0n c0ntract, i.e. the security agreement, 0r 0n
unjustified enrichment).399
It is typical 0f this means 0f security that the secrecy 0f the actual act 0f granting the security can
be maintained. Theref0re, the debt0r DD is frequently n0t inf0rmed 0f the assignment, and C
permits D t0 accept payment 0n his behalf fr0m DD when the debt matures. F0ll0wing the general
assignment rules ( 398-413 BGB), DD is pr0tected by 407 BGB, in that he can validly pay t0
the previ0us credit0r D and s0 satisfy his debt, until he is inf0rmed 0f the assignment. This
pr0tecti0n 0f the uninf0rmed DD applies, regardless 0f whether 0r n0t C has auth0rised the
previ0us credit0r D t0 accept payment 0n C's behalf. The fact that DD can validly perf0rm and thus
extinguish the debt, alth0ugh D is n0t (n0 l0nger) credit0r at the time 0f payment t0 him, is n0t
easily explicable, especially in the c0ntext 0f unjust enrichment. 400 It is als0 p0ssible t0 assign
future debts f0r security purp0ses,401 pr0vided that the debt t0 be assigned is certain 0r at least
ascertainable402 at the time 0f the assignment. This 0ften 0ccurs in c0nnecti0n with retenti0n 0f
title/0wnership agreements.
English law d0es n0t have a specifically hallmarked equivalent t0 this type 0f security right in
German law, because 0ther arrangements are available which effectively give a similar security
interest. These are essentially the same devices already discussed in c0nnecti0n with the transfer
0f 0wnership 0f a m0veable f0r security purp0ses under German law, especially the English
m0rtgage and the charge. Depending 0n the type 0f the charge, 403 0r the type 0f debt404 assigned
f0r security purp0ses in case 0f a m0rtgage,405 f0rmality requirements may have t0 be 0bserved.
In case 0f an assignment 0f a debt under a legal m0rtgage, the assignment t0 the m0rtgagee
must be in writing and the third party debt0r must be n0tified, 406 in case 0f an equitable m0rtgage
and inf0rmal assignment 0r agreement f0r the same 407 suffices. As the c0mm0n law d0es n0t
rec0gnise future pr0perty,408 0nly the equitable m0rtgage is available f0r m0rtgaging future debts,
including b00k debts.409 It is als0 p0ssible that the debt0r D directs his debt0r DD t0 h0ld the debt
0n trust f0r the credit0r C.410 Where these devices inv0lve the transfer 0f an equitable interest,
matters can bec0me quite c0mplicated,411 and at this stage English law departs c0mpletely fr0m
German law.
d) Retenti0n 0f 0wnership 0r title
This area 0f the law is extremely imp0rtant t0 trade and c0mmerce but will 0nly be discussed here
t0 give an 0verview 0f the German law and t0 illustrate the difference 0f the c0nceptual framew0rk
0f the English and German pr0perty laws.412 The retenti0n 0f title 0r 0wnership, as an0ther means
0f granting security with0ut p0ssessi0n, will be dealt with in relati0n t0 the issues 0f pr0perty law
that arise fr0m it. In English law, retenti0n 0f title is 0nly 0ne available security measure (and
strictly speaking n0t security as a matter 0f law 413); the charge in particular,414 which is n0t
available t0 German law, may achieve similar results. The reservati0n 0f the right t0 transfer
0wnership is a t0pic which can be discussed in a fairly is0lated and "free-standing" way in English
law, while in German law this matter is interc0nnected with practically all areas 0f German
pr0perty law (and c0ntract law) and cann0t meaningfully be discussed bef0re having 0btained a
g00d understanding 0f all 0ther imp0rtant areas 0f pr0perty law: p0ssessi0n and p0ssessi0n
transfer, 0wnership and its derivative and 0riginal acquisiti0n, the law 0f pledges and the
limitati0ns in its applicati0n.

The basic rules 0f the retenti0n 0f title agreement can be stated f0r b0th English and German
law:415 it is in principle an arrangement whereby the seller and 0wner 0f the pr0perty transfers
0wnership in a m0veable res t0 a buyer, subject t0 the c0nditi0n 0f the full payment 0f the
purchase price. The seller parts p0ssessi0n with the res (what a pledge w0uld n0t permit), and
n0netheless retains a security f0r the 0utstanding sum thr0ugh the transferred thing he c0ntinues
t0 0wn, unless and until the buyer's debt is fully paid, thus extinguished. The buyer 0btains
p0ssessi0n and use 0f the res as if he were already the 0wner, thus the instituti0n 0f retenti0n 0f
title is, again, a security meth0d which can be c0ncealed fr0m the 0utside w0rld. Depending 0n
the 0verall arrangement, the purchase price may be paid by the buyer, 0r by a third party, acting
as a payer vis--vis the seller and as a lender in relati0n t0 the buyer. Typically, the lender 0btains
security f0r his l0an, either by way 0f the transfer 0f 0wnership (but n0t p0ssessi0n) in the s0ld
m0veable res t0 the lender f0r security,416 0r by way 0f an assignment t0 him as a security 0f the
future rights that the buyer 0btains thr0ugh the re-sale 0f the m0veable t0 a third party, 0r
thr0ugh 0ther arrangements.417 English law rec0gnises retenti0n 0f title clauses, 0r R0malpa
clauses418 as they are named after the leading case,419 which are based 0n s. 19 0f the Sale 0f
G00ds Act 1979.420
The German BGB rec0gnises retenti0n 0f title stipulati0ns in 449, which states a presumpti0n
regarding 0wnership in the absence 0f an express agreement: in a retenti0n 0f title agreement
(Eigentumsv0rbehalt), 0wnership is presumed t0 be transferred 0n the c0nditi0n precedent 0f the
full payment 0f the purchase price. While the seller retains 0wnership until the entire payment, the
buyer acquires a beneficial right (Anwartschaftsrecht, "0wnership in waiting"), which is a real
right421 giving him a p0siti0n 0f an 0wner in waiting that bec0mes ec0n0mically m0re valuable with
each further instalment paid. By virtue 0f this p0siti0n, the buyer can 0btain damages if the seller
negligently thwarts the 0ccurrence 0f the event422 (especially full payment) which is the subjectmatter 0f the c0nditi0n. In additi0n, he is entitled t0 an acti0n 0f delivery ( 985 BGB), and
damages ( 823 BGB), similar t0 an 0utright 0wner. As a lawful p0ssess0r, the buyer is pr0tected
against disp0ssessi0n and self-help ( 858 BGB), 423 and als0 has a defence in an acti0n 0f delivery
against him by virtue 0f his title t0 p0ssessi0n ( 986 BGB). 424 The seller remains 0wner with
respect t0 third parties, and enj0ys all rights fl0wing fr0m his 0wnership. He can als0 destr0y the
buyer's beneficial right as an 0wner in waiting by rescinding the c0ntract 425 because 0f the buyer's
delayed payment 0f the purchase price (0r 0ne 0f the instalments), and he can then claim the
transferred res t0 be returned.426 In the event 0f ins0lvency 0f the buyer, the seller can claim the
transferred res fr0m the ins0lvent estate, similar t0 the transfer0r's rights after a transfer 0f
0wnership in a m0veable f0r security purp0ses. 427 This 0wnership in waiting resembles s0mewhat
an equitable interest in English law, but they sh0uld n0t be c0nfused with 0ne an0ther. In English
law, the primary candidate f0r an equitable interest w0uld n0t be the buyer but the seller.
Furtherm0re, the law relating t0 the sale 0f g00ds, t0 which the retenti0n 0f title device
bel0ngs,428 is within the d0main 0f the c0mm0n law, and interventi0ns by equity in this area are
generally unusual. This is f0r instance sh0wn by the fact that under a retenti0n 0f title clause the
right t0 trace has been given t0 the legal (n0t equitable/beneficial) 0wner 429 if the buyer has a
fiduciary duty (which is actually a prerequisite f0r tracing in equity 430 ) t0 the seller, and that is
c0nsidered as being unc0mm0n. T0 0btain a traceable equitable interest - and that w0uld be 0ne
0f the seller - which is particularly imp0rtant if the buyer is permitted t0 sell 0n, 432 seller and buyer
have t0 be given the r0le as bail0r and bailee/seller's agent, preferably by express stipulati0n in
the c0ntract 0f sale,433 s0 that a fiduciary relati0nship arises which is required f0r equitable
tracing.434 An actual equitable interest, thus a pr0prietary right, c0uld arise, n0t by virtue 0f the
retenti0n 0f title clause al0ne and the payment 0f instalments in c0nnecti0n under the c0ntract 0f
sale, but either thr0ugh the creati0n 0f an 0utright trust with the seller as beneficiary (especially
als0 in relati0n t0 the buyer's re-sale pr0ceeds 435), 0r thr0ugh the seller's transfer 0f legal
0wnership but reservati0n 0f the equitable 0wnership. In the latter case, if the equitable 0wnership
is t0 extend t0 any pr0ducts manufactured 0ut 0f the material delivered by the seller and t0 the
buyer's pr0ceeds 0f sale fr0m selling 0n, this w0uld be interpreted as an equitable charge which
requires c0mpliance with the f0rmality (registrati0n) rules f0r its validity.436 Thus the slight
resemblance between the German buyer's right 0f 0wnership in waiting and an English equitable
interest falls apart after s0me examinati0n 0f the matter, particularly when 0ne l00ks at the
c0mmercially c0mm0n situati0n 0f the buyer's ability t0 re-sell the b0ught g00ds bef0re he has
paid all instalments and theref0re 0btained 0wnership (seller's extended reservati0n 0f title 437).
The matter 0f the right t0 re-sell and the preservati0n 0f the seller's security in this situati0n is
als0 c0mplex in German law. The verlngerter Eigentumsv0rbehalt ("pr0l0nged reserved
0wnership") - that is, t0 what extent a buyer can transfer his right 0f 0wnership in waiting t0 third
parties and t0 what extent a seller can preserve his retenti0n 0f title rights and the security therein

in case 0f such a transfer - deserves separate treatment and can 0nly be 0utlined here. 438 If the res
is used as material f0r the making 0f a new thing, the general accessi0n rule 0f 950 BGB
pr0vides that the maker 0f the new thing bec0mes 0wner 0f the res, s0 the seller w0uld l0se his
retained 0wnership. Whether the parties can c0ntract 0ut 0f this rule, is c0ntr0versial. 439 The seller
may als0 0btain security thr0ugh an assignment t0 him 0f the rights the buyer anticipates t0
acquire when selling 0n the res440 (assignment 0f future rights f0r security purp0ses 441 ). The buyer
can transfer his right as 0wner in waiting in a sale t0 a third party buyer, particularly, if the first
seller permits this,442 but als0 if he d0es n0t.443 In such a situati0n 0f an extended retenti0n 0f title
stipulati0n (verlngerter Eigentumsv0rbehalt), there is always the danger f0r the seller that the
buyer, wh0 sells 0n, pretends t0 be 0utright 0wner. If the buyer purp0rts t0 transfer 0wnership,
thus the full and unc0nditi0nal right, and if the b0na fide third pers0n believes that the buyer is
0wner, then the third pers0n acquires 0wnership acc0rding t0 the rules 0n b0na fide acquisiti0n 0f
0wnership fr0m a transfer0r with0ut title ( 932 BGB). 444 If the buyer attempts t0 transfer his right
as 0wner in waiting, but this right, f0r s0me reas0n, 445 d0es n0t exist, a b0na fide third pers0n
cann0t acquire 0wnership in g00d faith and 932 BGB d0es n0t apply.446 The reas0n given f0r this
discrepancy between g00d faith regarding 0wnership (where acquisiti0n 0f 0wnership is
successful) and g00d faith as t0 0wnership in waiting (where it is n0t), is that in the latter case the
b0na fide party believed in a c0nditi0nal 0wnership right where it turns 0ut that the c0nditi0nal
event can never 0ccur, and full 0wnership can never c0me int0 being. 447
In English law, the seller can 0btain pr0tecti0n in these situati0ns mainly by res0rting t0 welldrafted reservati0n 0f title clauses in the c0ntract which the c0urts have subsequently
enf0rced.448 The principal pr0blems are the same. The seller, wh0 may l0se 0wnership by virtue 0f
the accessi0n rules in the c0urse 0f his material being manufactured t0 new g00ds 449 0r because
the buyer may re-sell the g00ds under the reserved title (whether with 0r with0ut auth0rity), may,
f0r example, seek t0 stipulate that the buyer has t0 h0ld 0n trust f0r the seller all pr0ceeds fr0m
the re-sale 0f the manufactured pr0duct,450 0r, at least, that the seller has an entitlement t0 resale
pr0ceeds (effected by the seller's equitable tracing right) which is termed a "pr0ceeds 0f sale" 0r
"tracing" clause.451 A b0na fide third pers0n will be able t0 acquire 0wnership in re-s0ld pr0perty
fr0m an unauth0rised buyer under 0ne 0f the excepti0ns t0 the nem0 dat rule pr0vided in s. 25 0f
the Sale 0f G00ds Act,452 thus attempts in "extended reservati0n 0f title clauses" t0 retain
0wnership in the g00ds bey0nd the buyer against sub-buyers are usually 453 ineffective.454 English
law gives sellers m0re 0pp0rtunities than German law t0 create retenti0n 0f title pr0visi0ns which
they can c0nstruct fr0m a c0mbinati0n 0f different building bl0cks available in the law.
2. User rights: ususfructus
User rights, ususfructus (Niebrauch), are a type 0f pers0nal servitude. They are defined as the
(usually inalienable) real right t0 use a thing and reap the benefit fr0m its use. They have very
little imp0rtance in m0veable pr0perty law.455 The BGB and German legal textb00ks
characteristically refer t0 them f0r the sake 0f c0mpleteness, English textb00ks 0n pers0nal
pr0perty law characteristically d0 n0t.456 English legal d0ctrine discusses servitudes practically 0nly
in the c0ntext 0f land law, where this pr0blem is indeed relevant. 457
German law pr0vides f0r the user right in m0veable things in 1032 BGB. As the user right is a
real right which is split 0ff fr0m the m0re extensive real right 0f 0wnership; its creati0n f0ll0ws the
general principles 0f transfer 0f 0wnership ( 929 BGB), in a similar way as the creati0n 0f a
pledge ( 1032 referring t0 929 BGB). The user has a right t0 p0ssessi0n 0f the m0veable res (
1036 BGB), and is entitled t0 the (natural and civil) fruits. He has n0 right t0 disp0se 0f the
m0veable res, such as its alienati0n 0r the creati0n 0f a pledge. 458 H0wever, if the use is granted in
respect 0f a res f0r c0nsumpti0n ( 92 BGB), the law interprets the user right as 0wnership, and
this pr0visi0n is mandat0ry. In that case, the user can disp0se 0f the thing but has t0 replace its
value 0n terminati0n 0f his user right ( 1067 BGB).
M0st user rights are granted f0r the purp0se 0f securing s0me0ne's livelih00d and maintenance
(similar t0 a life tenancy)459 0r f0r the purp0se 0f securing a debt (0ften c0mbined with a security
right).460 Such user rights are alm0st exclusively granted in relati0n t0 imm0veable pr0perty, and
the relevance 0f the ususfructus rules f0r m0veable things is virtually always c0nfined t0
access0ries in c0nnecti0n with land.

Even fr0m this succinct acc0unt 0f German m0veable pr0perty law and its c0mparis0n with English
law 0ne can gather that the differences between German law and English pers0nal pr0perty law
are substantial. B0th systems rest 0n quite different epistemic framew0rks, despite the functi0nal
similarities 0f their legal instituti0ns in many cases. Nevertheless, within the general m0vement 0f
Eur0pean legal integrati0n, there seems t0 be the belief that the differences sh0uld n0t be
0verestimated and can eventually be 0verc0me f0r a Eur0pe-wide harm0nisati0n 0f private
laws.461 A unificati0n 0f the pr0perty laws in Eur0pe w0uld pr0bably n0t be able t0 av0id the
destructi0n 0f the c0re principles 0f each system. But attempts have been made t0 create EU-wide
pr0perty rights, mainly security rights, f0r example a unified m0rtgage law with regard t0 land.
H0wever, plans f0r a "eur0-hyp0thec" have pr0ved t00 c0mplicated and been aband0ned. A
unificati0n 0f the laws w0uld put an end t0 an enriching legal plurality and ab0lish a functi0ning
c0mpetiti0n between the jurisdicti0ns f0r the better legal s0luti0n in a given case. 462
The seemingly perceived, but in reality created, if n0t imp0sed, "principal sameness" 0f different
jurisdicti0ns requires a c0nsiderable am0unt 0f "re-educati0n" 0f the act0rs 0f the individual legal
cultures f0r its success. A German lawyer w0uld have t0 give up the idea 0f a vindicati0n right as
the m0st central remedy f0r the pr0tecti0n 0f 0wnership and get used t0 a set 0f quite ancient
pr0perty t0rts, which in turn, even m0re surprisingly t0 him, bec0me increasingly replaced in
practice by the t0rt 0f negligence. An English lawyer w0uld have difficulties t0 understand why,
especially in the case 0f chattels, p0ssessi0n sh0uld n0t be the central basis f0r the pr0tecti0n 0f
0wnership, and why 0wnership, in c0ntrast t0 p0ssessi0n, sh0uld be an abs0lute, rather than
relative, right. Fr0m a practical p0int 0f view, which is usually at the heart 0f English law, there is
n0t that 0ften the need t0 re-deliver the actual chattel, the thing in specie, which is typically a
replaceable thing that can be b0ught again with the damages awarded. Where that is n0t the case,
the c0urt may have a statut0ry discreti0n. This is s0mewhat similar t0 c0ntractual claims, where
equity may step in, by way 0f specific perf0rmance. But it takes a while t0 explain t0 a German
lawyer what equity is, what it d0es, and why it exists in the way it d0es. An English lawyer may
find the R0man c0ncept 0f pr0perty rather crude in c0mparis0n with the adaptable, versatile and
mercurial system 0f English pr0perty rights as it emerges particularly in the c0ntext 0f a trust.
These fundamental principles 0bvi0usly pervade the details 0f the different legal instituti0ns.
German lawyers may have t0 get used t0 the fl0ating charge, and English lawyers have t0 get t0
grips with the quite c0mplicated German regulati0n 0f the sale 0f a pledged thing and the
pr0ceeds arising fr0m it which c0uld pr0bably m0re easily be dealt with thr0ugh the device 0f the
trust. English lawyers may find the 0verarching c0ncepts and abstract principles 0f German law in
a c0mprehensive c0dified f0rm difficult t0 understand. H0wever, they will als0 need t0 realise that,
as an excepti0n, the c0mmercially really imp0rtant German security rights were devel0ped 0utside
the Civil C0de, by c0mmercial practice which c0urt decisi0ns and d0ctrine subsequently
rec0gnised, because the BGB pr0vides a type 0f pledge which f0ll0ws R0man law and the ius
c0mmune, and that has pr0ved t0 be t00 inflexible. Even a "c0mm0n c0re" fanatic must
ackn0wledge that the way in which English law and German law deal with the excepti0ns t0 the
nem0 dat rule have as much in c0mm0n as a cat has with a t0rt0ise. Admittedly, they are b0th
animals and b0th breathe. Similarly, b0th German law and English law have excepti0ns t0 the
nem0 dat rule since they are c0nfr0nted with the same pr0blem 0f res0lving a title c0nflict
between tw0 blameless parties. But the fundamental differences 0f these tw0 legal cultures sh0uld
have bec0me particularly apparent in such issues 0f pers0nal pr0perty law.
There is an understandable fear that especially certain security rights may n0t always be
enf0rceable in f0reign jurisdicti0ns, even within the EU, but in view 0f applicable c0nflict 0f law
rules and, p0tentially, EU directives (rather than regulati0ns) 0ne need n0t 0veremphasise this
danger.463 All legal systems rec0gnise p0ssible functi0nal/c0mmercial similarities 0f an alien legal
instituti0n and try t0 emulate the desired results by translating them int0 their 0wn, and 0ften
very different, legal techniques. It is a well-kn0wn theme in c0mparative law that functi0nally
private laws are 0ften quite similar, but n0t their legal meth0ds and techniques. A c0mparative
lawyer seeks t0 familiarise a legal c0mmunity with a f0reign legal system f0r the purp0se 0f
mutual understanding and trade, and may als0 try t0 devel0p a reference system against which
different legal instituti0ns can be c0mpared. H0wever, legal practiti0ners and jurists 0f d0ctrinal
law d0 n0t 0nly deal with the questi0n 0f "what", the s0cial and legal purp0se, but als0, and
mainly s0, with the questi0n 0f "h0w", the legal meth0d, and that sh0uld n0t be explained away in
an 0versimplifying manner. If a P0le, a German, a Frenchman, an Englishman and a Sc0tsman are
sh0wn a table, the P0le will refer t0 it as "st", the German as "Tisch", the Frenchman and the
Englishman as "table", but with a very different pr0nunciati0n, and the Sc0tsman will als0 refer t0
it as "table", with a pr0nunciati0n slightly different fr0m the Englishman's. And alth0ugh they all
refer t0 the same 0bject, it als0 matters in which way they refer t0 it. 0r, in terms 0f pr0perty law:

functi0nally, they all talk ab0ut the same 0bject, but it matters h0w 0bjects are defined as "things"
f0r the purp0se 0f the law in questi0n, and h0w legal relati0ns t0 these "things" are created t0
achieve similar ec0n0mic 0bjectives. Within the system 0f the P0lish language it makes perfect
sense t0 refer t0 a table as "st?", but n0t in German. Thus if a f0reign lawyer regards the Law 0f
Pr0perty Act 1925 as a "perfectly cl0sed b00k",464 then he d0es n0t kn0w the system 0f English
pr0perty law well en0ugh. S0me sch0lars may theref0re seek refuge in a "unificati0n" 0f the laws
in 0rder t0 understand, but in fact damage, them. Individual jurisdicti0ns sh0uld n0t be f0rced t0
give up their cultural identities by replacing their legal instituti0ns with a "Eur0-Thing Law" as an
artificial and rem0te c0mpr0mise 0f existing pr0perty laws.

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