Bona Fide Purchase Under Constructive Delivery

As an usual method used in modern market, constructive delivery plays animportant role in promoting the commercial trade. Constructive is developed fromRoman law, which produced a concept that possession and title are separate,,for thepurpose of promotion of effectiveness, during the procedure of commercial trades. Adelivery of title to property in conception is formed. Upon the convenience ofconstructive delivery, it is still be used and confirmed by law in majority ofcountries,including continental law system and common law system. In common lawsystem, although it is based on cases, some of countries confirmed constructivedelivery by law.There are three types of constructive delivery, including simple delivery,indication delivery and constitutum possessorium. All types are transmits of title toproperty in concept, however, the forms of them are diverse. Simple delivery means adelivery taking place when a subject is in possession of an assignee and an assigneeand an assigner have agreed upon that the title to subject would be assigned at thetime of an assignable agreement being concluded. The term indication delivery meansa delivery taking place when subject is possessed by a third party, and where theparties have agreed to assign the title to subject when the assignable agreement isconcluded. The term constitutum possessorium means a delivery taking place wherethe assignment of title to the subject has been agreed by both parties, however, uponsome reasons, the parties agreed upon that the subject is continue to be controlled bythe assigner.Constructive delivery would produce a separation of direct possession and title,which is a principle requirement of effectiveness of modern trades. Meanwhile, uponsuch separation produced by constructive delivery, there is unavoidable risk that otherparties fail to determine the actual statues due to the discrepancy of the de factoownership and possession. Upon such risk, there are some objections againstconstructive delivery and when it applies with other structures.In event of applying constructive delivery with bona fide purchase, upon thediscrepancy of de facto ownership and possession, there are discussion about whetherbona fide purchase is effective if such purchase is subject to constructive delivery.In respect to the property accepted by a bona fide purchaser from anunauthorized dispositor, if such unauthorized dispositor directly possesses the subject by constructive delivery, the bona fide purchase is confirmed without any argumentwhere the bona fide purchaser has de facto possession of the subject.The argument is that in event of a constructive delivery is used between anunauthorized dispositor and a bona fide purchaser, which means that such bona fidepurchaser fails to have the de facto possession of the subject, wether a bona fidepurchase is confirmed or not. In another word, the argument is focus on the deliveryas to a bona fide purchase.The positive party claims that, the purpose of bona fide purchase is to protect abona fide purchaser who conduct his trade upon the direct possession. A bona fidepurchaser under constructive delivery has the same trust as them under de factodelivery due to the direct possession. Such purchaser conduct the sale by a diversedelivery which is affirmed by law. Therefore, it is unfair to obtain differentconsequence for the purchasers who perform the same due obligation.The negative party claims that, the direct possession by a bona fide purchaser isone of the elements of bona fide purchase, which is absent in constructive delivery.Furthermore, they claims that bona fide purchase under constructive delivery wouldcause uncertain risk in market.However, such argument shall be studied based on constructive and bona fidedelivery, to determine if there is fact that may produce problems in applying such twosystems. It is inevitable that there are some unresolved problems when bona fide isapplied under constructive delivery, to which the argument is carried to make somerules applying.In accordance with the discussion of the production and development, this articleis to prove that bona fide is effective under constructive delivery, and to provide morebeneficial direction for both systems.