In considering American common law doctrines shaped during the nineteenth century, commentators have advanced differing theories on the primary judicial criteria employed by judges. Recent studies have argued that these doctrines reflect a criterion of economic efficiency. This work has been criticized for its failure to explain why there seems to be a correlation between efficiency and these decision rules or why judges might have preferred efficiency over other decisional criteria. Other studies have proposed that many judicial doctrines announced before the Civil War were intended to facilitate or ratify major shifts in the distribution of social wealth. This article seeks to determine the extent to which antebellum American judges employed economic efficiency as a criterion in formulating decision rules applicable to disputes between the owners and good faith purchasers of goods. It necessarily also considers the possibility of other judicial criteria including the redistribution of wealth.
The decisions selected for study generally arose in the following situation. A's goods come into the possession of B. After one or more additional transfers, the goods come to rest in the hands of C, a good faith purchaser. A then seeks to recover the goods (or their value) from C who was previously unaware of A's claim. Confronted with this situation, antebellum courts focused on the circumstances under which A and A’s goods parted company. All permitted A to recover his goods when they had been stolen by B even if C would have been protected by the English doctrine of market overt. American courts developed the voidable title doctrine which permitted A to prevail over C when the goods had been taken from A by B through some, but not all, types of fraud. If A's transfer was to B as A's agent, recovery from C was dependent upon the application of principles of agency and estoppel.
In an earlier paper, this author employed economic analysis to explain this pattern of purchaser protection. Significant theoretical considerations in this study included each decision rule's impact on the demand for and supply of illegitimate goods in the marketplace and the comparative efficiency of owners and good faith purchasers with respect to their ability to prevent the risk that goods would move from the former class to the latter. However, the earlier paper analyzed the pattern under modern day conditions and did not consider whether it was the product of judges who sought to announce efficient decision rules. This paper explores the pattern's antebellum roots.
Harold R. Weinberg, Markets Overt, Voidable Titles, and Feckless Agents: Judges and Efficiency in the Antebellum Doctrine of Good Faith Purchase, 56 Tul. L. Rev. 1 (1981).