m i \ UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY ^. -t . ^' A. THE LAW OF SALES BY JOHN BARKER WAITE PROFESSOR OF LAW. UNIVERSITY OF MICHIGAN CHICAGO GALLAGHAN & COMPANY 1921 X T Copyright 1921 by CALLAGHAN & COMPANY ^li\s^ PREFACE To derive the best frorti any book, one must read it with knowledge of the ideas which underlie it and of the purpose with which it was produced. Every sincere book relating to law is inevitably and distinctly colored by its author's idea of what law is. Therefore it seems proper for me to present my own views. I conceive law to be the aggregation of rules which courts of justice feel themselves more or less obligated to follow in deciding controversies. To some extent these rules are formulated and declared by legislative author- ity. Most of them, however, have been evolved by judges themselves. These latter rules are not always easy to formulate; if they were, there would be no need for real text-books. Even the precise utterances of various judges can not always be accepted as rules. I believe that no judge has power, either practically or theoretically, to bind other judges by any declaration of rule or command, but that the only obligation felt by courts is the obligation to con- form to prior judicial action. It is therefore prior judi- cial conduct under given circumstances which determines the action of later judges, rather than prior declarations as to what such conduct ought to be. In the great majority of cases, actual decision does accord with the mere verbal declarations of what ought iii iv PREFACE to be done. But not infrequently a judge in deciding the case before him will state what he would have done had the facts been otherwise. He states what he believes to be a rule, without being called to act upon it. In many other cases judges have rendered decisions that actually conform to prior related decisions, but have given as rea- son for the decision some assumed rule which is really inconsistent with the earlier ones. These dicta, there- fore, can not blindly be accepted as rules of law. Rules of law, like the laws of any other science, must be deduced from a critical analysis and study of legal phenomena. And these phenomena, to my mind, are the decisions actually rendered by courts of justice. I do not mean that the comments and stated reasons of the judges may be disregarded. On the contrary, they are an intrinsic part of the phenomena of decision. They must be considered and given the fullest effect of guid- ance. But if one admits that, while judges may act on each case as it comes before them, they may not com- mand other judges how to act, one must of necessity deduce the rule of action primarily from the acts them- selves. Hence I have sought always for some judicial custom of decision, as indicating the rule of law more truly than does judicial speech alone. In another respect, also, I have looked beyond the mere words of decisions. Judicial opinions often merely state the facts of a case as though they were in themselves a self-evident reason for the decision. No rule at all is stated. A text writer can follow this example and merely state the rule to be that when facts are thus and so the decision will be thus and so. But if law is truly the per- fection of reason, there should be a rational basis for all PREFACE V decisions — some reason founded on utility, or on consist- ency with other and correlated rules of law. Only through knowledge of these reasons — whether they rest in the utility of consistency only, or of something else — can a lawyer possibly predict what will be the decision — or advise the court what should be the decision — in cases of somewhat novel facts. It is only through deduction of the reason, the rule for decision, from study of many deci- sions that the essential facts can possibly be separated from the immaterial. It is just this analysis, it seems to me, which distin- guishes a text-book from a digest. The latter presents the phenomena. That is, it gives the facts and decisions of cases. The former takes enough of these phenomena for reasonable certainty and attempts, through inductive analysis, to present the underlying causes of the deci- sions for use in future cases. If it does not do this, it is only a compilation itself. A text-book and a digest are, therefore, not substitutes for each other, but one supple- ments the other. The law of Sales has already been so well analyzed and presented by men like Williston and Meechem that a new book is hardly justified so far as substance of the rules alone is concerned. But, inasmuch as students of any science disagree more or less as to the causes of its phe- nomena, it is always possible that a new writer may bring something of value by way of explanation and of reason for the rules. There is also possible value in a new manner of pre- senting an old subject-matter. Some books, for instance, group rules of law according to their relation to certain vi PREFACE concrete things, such as the "law of electricity" and the "law of automobiles." Likewise, they group the rules of a particular subject around certain things, or certain acts, as, in Sales, bills of lading, or delivery of posses- sion. On the other hand, the rules may be grouped according to persons affected, which is the plan I have chosen. Each rule may itself be discussed as relating to a legal right of one person, a lack of right in another, or a legal power of a third. For example, the transfer of a bill of lading by an insolvent buyer may, in some circumstances, terminate the seller's right to retake possession of the goods while still in transit. This one legal result can be discussed as a right of the buyer of the bill of lading to receive the goods themselves, as a lack of right in the original seller to retake possession, or as a power of the original buyer to cut off his seller's right of stopping the goods. Or the one rule can be discussed by repetition under all three forms. This last method has the advan- tage of the clarity which comes from demonstrating a matter in all its aspects. Nevertheless, it is not at all essential to completeness of presentation and does re- quire a great amount of space. For the sake of brevity, I have discussed each rule only once, and, so far as prac- ticable, I have treated each rule in the aspect of a right of some person. In some instances, however, notably as to the rights of original owners against persons other than the buyer, it seemed advisable, for the sake of order- liness, to put the discussion under lack of right of the other person. Although discussing any particular rule once only saves considerable space, it does force upon the reader PREFACE vii the task of making his own comparisons between differ- ent rights, and requires him to remember that any right of one person connotes a complementary lack of right in other persons. In presenting my own idea of what law is I have said that it is the rules which courts feel more or less obliged to follow. I do not believe that even in theory courts are absolutely bound to follow the rules of precedent. Actu- ally, it is indisputable that they do modify and depart from established rules when they believe that economic utility so warrants. "Witness, for instance, the develop- ment of rules as to implied warranty in sales of food. If courts do thus consider the economic effect of a deci- sion, and consciously or subconsciously depart from the letter of established rules at the dictate of pragmatic con- siderations, one who would predict the decision in any case must do more than familiarise himself with the rules of precedent "alone. He must observe and understand the trend of change which is taking place in those rules. He must be a student of socio-economic rules and theories as well as of the rules of legal precedent. It is not improbable that, eventually, complete text- books will include an analysis of economic and social factors hkely to affect judicial decision, which they will correlate with their discussion of precedent. The idea is most intriguing. I have, myself, however, made no attempt to do this, but have conventionally left to the reader the contentious question whether courts may properly depart from precedent and, when they do so depart, by just what considerations they are influenced. It has been said that technical text-books are neces- viii PREFACE sarily too elementary and incomplete to be of much value to readers already trained in the subject, or are too diffi- cult reading for untrained students. I do not think this is true of books on law. The subject is full of terms, to be sure, which have a technical connotation unrecognized by laymen, and many rules are really complexes of other more elemental rules which la^vyers rather take for granted. But a book which uses words and phrases in their usual sense and which proceeds sequentially from elemental principles to the more complex ones can be clear and comprehensible to la}^ readers and yet be so detailed in its subject-matter as to serve also the needs of trained practitioners. It is in this belief that I have written what follows, hoping that the small size of the book and its arrange- ment, without necessarily derogating its real technical value, will make it more available to some readers than a more voluminous work would be. John Barker Waite. Aim Arbor, Michigan. TABLE OF CONTENTS CHAPTER I GENERAL PRINCIPLES PAGE Meaning of "Sale" 1 Sale Distinguished from Other Transactions 3 Subject Matter of Sales 12 Contractual Features 14 CHAPTER II TRANSFER OF TITLE RULES FOR DETERMINING THE PASSING OF TITLE Passing of Title 16 Intent Governs 17 Change of Possession Not Essential 17 Payment Not Essential 19 Presumptions of Intent 19 Conditions Precedent to Passing of Title 32 "C. 0. D." 35 Rebuttal of Presumptions 38 Expressed Intent 39 IDENTIFICATION OF PROPERTY SOLD Specification 40 Assent to Specification 44 "Passing of Title by Specification 49 Unspecified Part of Specified Mass 63 Specified Part of Larger Mass 70 Goods Not in Existence 70 Potential Interests 80 ix X TABLE OF CONTENTS CHAPTER III SELLER'S REMEDIES AND RIGHTS BOTH TITLE AND POSSESSION RETAINED PAGE Breach of Contract 86 Recovery of Purchase Price 92 TITLE RETAINED, BUT POSSESSION PASSED Breach of Contract 99 Recovery of Purchase Price 99 Titular Actions 102 Recovery of Possession 102 Suit for Price After Retaking Possession 106 Underlying Theory 107 POSSESSION RETAINED, BUT TITLE PASSED Recovery of Price 109 Breach of Contract 110 Seller's Lien Ill Enforcement of Lien — Resale 122 Stoppage in transitu 130 Effect of Stoppage 146 NEITHER TITLE NOR POSSESSION RETAINED Recovery of Price 147 Recovery of Possession 147 Recovery of Value of Goods 148 Rescission Because of Fraud 148 CHAPTER IV BUYER'S REMEDIES AND RIGHTS NEITHER TITLE NOR POSSESSION ACQUIRED Breach of Contract 152 Recovery of Money Paid 157 Inspection Before Accepting Title 157 Inspection Before Payment 166 Performance of Conditions by Seller 168 POSSESSION, BUT NOT TITLE, ACQUIRED Right to Keep Possession 176 TABLE OF CONTENTS xi PAGE Right to Acquire Title 176 Right to Return the Goods 177 Right to a Return of Money Paid 177 TITLE, BUT NOT POSSESSION, ACQUIRED Titular Action '179 Breach of Warranty 179 CHAPTER V REMEDIES AND RIGHTS OF THIRD PERSONS PURCHASERS FROM A PERSON IN POSSESSION, BUT WITHOUT TITLE In General 201 Pledgees 206 When Seller has a Right to Acquire Title 206 Estoppel 208 Particular Types of Property 209 Bills of Lading 210 PURCHASERS FROM SELLER REMAINING IN POSSESSION AFTER PASSING TITLE Fraud as a Reason 212 Policy as a Reason 214 What Constitutes Possession 218 PURCHASERS FROM ONE WHO HAS TITLE, BUT NOT POSSESSION Subject to Original Owner's Rights 219 Purchasers of Bill of Lading 221 Pledgees 223 PURCHASERS FROM ONE WHO HAS POSSESSION AND A VOIDABLE TITLE Purchasers Not in Good Faith 226 What Constitutes a Voidable Title 227 CHAPTER VI THE STATUTE OF FRAUDS CONTRACTS AFFECTED BY THE STATUTE Executory Contracts 232 xii . TABLE OF CONTENTS PAGE Contracts to Manufacture and Sell 233 Exchanges 241 Other Contracts 242 Subject Matter 243 Price 249 MEMORANDUM REQUIRED BY THE STATUTE Character of the Memorandum 250 Purpose of the Memorandum 251 Signature 252 Separate Papers 255 Contents of Memorandum 258 Self-Explanation of Memorandum 261 SATISFACTION OF THE STATUTE BY ACCEPTANCE AND RECEIPT "Receive" and "Accept" do not Relate to Title 262 Change of Position 264 Mutuality of Intent : 265 Receipt and Acceptance Both Essential 266 Acceptance 266 Receipt and Acceptance of Part of the Goods 270 SATISFACTION OF THE STATUTE BY PAYMENT OR GIVING EARNEST Time of Payment 275 Medium of Payment 276 Mutuality Required 277 Through Agents 278 EFFECT OF FAILURE TO SATISFY THE STATUTE Does Not Destroy the Contract 278 Contract as a Defense 282 APPENDIX AN ACT TO MAKE UNIFORM THE LAW OF SALES OF GOODS 285 THE LAW OF SALES CHAPTER I General Principles The law of Sales is concerned essentially with the transfer of ownership to personal property. It does not include the origin of ownership in the first instance, nor does it involve the character of the rights and liabilities which accrue to ownership. It comprises only the trans- fer thereof with the attendant rights and liabilities, whatsoever they may be, from one person to another. Meaning of Sale. — ^A sale may be defined as the transfer from one person to another of the absolute own- ership of some specific chattel, for a reciprocal compensa- tion which is in money or something valued by the par- ties in terms of money. The word ''sale" has also a secondary meaning, in which sense it implies not an accomplished transfer of the ownership, but an agreement to transfer it. It may thus apply to an agreement which has been performed, or to an agreement to be performed, and its use in either significance is indiscriminate. Thus in some cases the court uses ''sale" and "contract of sale" as quite different from "agreement to sell" and as mean- ing actual transfer of ownership.^ On the other hand "sale" is often used in reference to the "contract" regardless of whether the contract has been carried to execution or not. Thus one court uses it in saying,** "In many cases of sales of personal property it is a very nice 1 — Low V. Pew, 108 Mass. 347; wood v. Cutting Packing Co., 76 Oklahoma Moline Plow Co. v. Cal. 212, 9 Am. St. 199. Smith, Okla., 137 Pac. 285; Black- 2 — Oliphant v. Baker, 5 Denio 379. 2 THE LAW OF SALES and difficult question to determine • • • whether the title has passed." If one bears in mind this duplex use, as indicating either an agreement to transfer the title, or an ac- complished transfer, he will find no real confusion aris- ing from it, despite the rather remarkable literal confu- sion, because the context practically always shows the sense in which it is employed.* No definition is wholly clear unless all the terms by which it is expressed are themselves definite and precise. In defining **sale" as the transfer of ownership, one is met at the outset by an uncertainty as to just what con- stitutes ** ownership. " In the abstract it may be defined as the fundamental right to enjoyment of the particular thing to which it is said to attach. (It is obvious that the terms '* right," ''privilege," ''power," and similar expressions are not used here in any precise sense, such as that of the so-called Hohfeltian terminol- ogy.) In the case of corporeal property, as distinct from mere ' ' rights, ' ' enjoyment has always been so completely predicated on physical possession, that ownership is often defined in terms of possession, and is the fundamental right to possession of a particular piece of property.* But in addition to the right of possession, there are other powers, privileges and duties in respect to things, which are recognized by the courts. Certain of these privileges, etc., commonly follow as a matter of course from ownership or, conversely, an o^vner is said to have certain definite privileges and liabilities.* 3 — "S(3 feeble and precarious sary in modern times, the clumsy was property without possession, term 'special property' was em- or rather without possessory rem- ployed to denote the rights of a edies, in the eyes of medieval possessor not being owner." Pol- lawyers, that Possession largely lock & Wright, "Possession," p. 5. usurped not only the substance but the name of Property, and 4 — "The term 'property' al- when distinction became neces- though in common parlance fre- •See Uniform Sales Act, Section 1, (1), (2), (3), (4), and 76, "Sale". GENERAL PRINCIPLES 3 The composite whole of these powers, privileges and duties is ordinarily thought of as constituting ownership. Occasionally, however, it transpires that certain of these component powers, privileges, or duties, are attributed by courts to one individual while the others are, at least by imphcation, attributed to another. The query is at once presented, whether ''ownership" can be di\'ided, whether two persons, one having the right to ultimate possession and the other having different rights in respect to the same chattel, can both be called ' ' owners ' ' of it. If own- ership is not divisible, so that they can not both be owners, how many of the component rights usually constituting "ownership," or which of them, are absolutely essential for the law to call their possessor owner f No attempt need be made to answer this question here, but specific reference to it is necessary because knowledge of the question is itself the solution of much confusion, to be pointed out later, as to whether or not ' ' title ' ' has passed when certain legal powers and privileges have passed and others have not.^ Sale Distinguished From Other Transactions. — A transfer of anything less than enough of these component rights and duties, to constitute the ownership — or, more concretely, a transfer of anything less than the fundamental right to control possession — is not a "sale" but is called by some other name such as "bailment," "pledge," etc. The name which a contract gives to a particular transaction does not determine the number quently applied to a tract of land 504. And see the excellent exposl- or a chattel, in its legal signifi- tion in Some Fundamental Legal cance means only the rights of Conceptions. 23 Yale L. Jr. 16. the owner in relation to it. It 5_cf., "The action * * * must denotes a right over a determin- be brought by the owner, although ate thing. Property is the right the ownership need not be abso- of any person to possess, use, en- lute but may be that of a bailee." joy and dispose of a thing." Eaton Garvan v. N. Y. C. Rr., 210 Mass. V. B. C. & M. R. R. Co., 51 N. H. 275. 4 THE LAW OF SALES and character of the powers and privileges trans- ferred, but the name is itself determined by the num- ber and character of the powers intended by the parties to be transferred. Therefore, in any given case the inquiry is not directly whether the transaction was intended to be by name a sale, or a bailment, or a pledge, but rather, what powers, etc., were intended to be trans- ferred. The answer to this question can not be deter- mined by any rule of thumb. Each case must be decided upon its own particular circumstances. All that can be said is that the real or apparent intent of the parties will control and is the thing to be determined. // the parties intended the transaction to pass the ownership of the property the courts will call the transaction a sale and give it effect as such. 7/ they intended to con- vey powers less than complete ownership the courts will call it something less than a sale and give it only such effect as was intended. -By Whom Distinction Is Made. — The real intention of the parties being the determinative issue, it would seem properly a fact to be determined by the jury.^ It is the province of the court, however, to decide, and to instruct the jury accordingly, just what rights and powers the parties must have intended to transfer to have intended a transfer of ownership and, con- versely, what reservation of powers in the transferor constitutes a withholding of ownership from the trans- feree. Courts sometimes speak as though such reserva- tion or transfer of particular powers showed intent. This transfer or reservation of particular powers con- stitutes as a matter of law a transfer or retention of ownership because it is incompatible with the legal idea 6 — Rauber v. Sundback, 1 S. D. Cook v. Lion Fire Ins. Co., 67 Cal. 268; Crosby v. Del. & Hud. Canal 368; Webster Bros. Milling Co. v. Co., 119 N. Y. 334; Id. 128 N. Y. Bingham, 14 Ariz. 50. 641; Id. 141 N. Y. 589; Brown Bros. V. Gilliam, 53 Mo. App. 376; GENERAL PRINCIPLES 5 of ownership in the other person. The lack of pre- cision in speaking of the matter leads some courts to say that because the parties intended certain powers or duties to be in one party the title is in him, while other courts instruct the jury that if they find ^hose particular powers or duties were intended to be in one person they must find that the parties intended title to be in him. The one thus appears to make title a matter of determination by the court from admitted facts, the other appears to leave it to the jury as a matter of intent. But it may be observed that the result is the same whether the court deduces it for itself from pre- liminary facts already ascertained, or orders the jury so to find upon the same preliminary facts. It is essen- tially these preliminary facts, that is to say, the par- ticular powers and privileges which the parties intended to pass or not to pass, which must be ascertained by the jury. If the intent to pass certain rights and powers is admitted by the parties, or the court thinks it could not be disputed, the court can decide "what name shall be given the transaction, as a matter of law; but if there is dispute as to what rights and powers the parties in- tended to pass, the case should be submitted to the jury with instructions as to what name they shall give the transaction accordingly as they find that the parties intended to pass or not to pass certain rights and powers. When, however, the entire transaction is in the form of a written contract, the court will ''construe" the contract and decide for itself the question of what particular rights, powers and liabilities the parties intended to pass, and thus practically take the case from the jury entirely.' Rules for Distinction. — The courts have laid down a number of propositions as to what particular legal 7— Fleet V. Hertz, 201 111. 594, Oxley, 80 Ind. 580; D. M. Ferry 94 Am. St. 192, See the peculiar & Co. v. Hall, 188 Ala. 178, L. R. combination in Ginsburg v. Lum- a. 1917 B 620 containing a ber Co., 85 Mich. 439; Reissner v. lengthy annotation. 6 THE LAW OF SALES powers the parties must have intended to transfer to constitute change of "ownership". These all, however, have the common characteristic that they show which person was intended fundamentally to control possession and enjoyment of the thing. The law is simple enough, but it is obvious that in many cases there is no way of determining absolutely what the parties did intend in this regard. The issue becomes, therefore, merely a conclusion of mind from the particular facts and the facts are apt to be so incon- clusive that two wholly fair and able minds may differ absolutely. It is this possibility of difference of opinion by two courts on essentially similar cases that makes much apparent conflict. It is not, however, a conflict of law, in the sense of a rule of determination, but only a difference of conclusion as to real intent. In such cases it is highly probable that the parties had no real intent as to title at all ; did not think of anything beyond the immediate and obvious facts of the transaction. A finding of "intent," therefore, is only presumptive, a legal construction from the facts. Such constructive in- tent is properly a matter for the court rather than for the jury, which latter is supposed to ascertain only actual facts. But while, as noted above, very many courts do, themselves, make the finding as a matter of law, there are no established rules of presumption to guide them. "What rules there are, simply declare what intent shall, or shall not, constitute a transfer of ownership, leaving court or jury to ascertain as matter of conclusion in each case what was the particular intent.® Bailment. — Thus, if the parties intend that the particular thing transferred shall, sooner or later, be returned to the transferor the transaction is not a change 8 — The process of forming a Ex parte White, L. R. 6 Ch. Ap. judicial opinion from the facts, Cas. 397, 19 Wkly. R. 488. without guiding rule. Is shown in GENERAL PRINCIPLES 7 of ownership and not, therefore, a sale.® And this is true even though the transferee of the thing is to do something to it, even to the extent of completely altering its form.^° On the other hand, an intention that the transferee need not return it constitutes a transfer of title despite, the fact that he is to return something of like kind, or any equivalent.''^ It must be remembered, however, that the real intention of the parties in this respect is often very difficult to decide and is the true cause of dispute in the case.^* Sale on Approval. — If the parties intend that the transferee of the thing shall have the option to return it or to keep it, the question of ownership depends upon a further fact of intention, namely whether the parties intend the thing to be returned unless the transferee shall choose to keep it, or to be kept by the transferee unless he shall choose to return it. The first intention does not pass title until the option is exercised and is usually called a "sale upon approval" or some synonymous phrase.^' The second intention passes title until the option is exercised, and is usually called some- thing to the effect of a " sale -with privilege of return. ' '^** As one court said,^^ "An option to purchase if he liked is 9— Bretz v. Diehl, 117 Pa. St. 13— Fleet v. Heitz, 201 111. 594, 589, 2 Am. St. Rep. 706. 94 Am. St. 192, (court thought in- 10 — Wheat delivered to trans- tent very clear) ; In re Miller & feree to be manufactured into Brown, 135 Fed. 871; Hallidie v. flour and returned held to have Sutter St. Ry. Co., 63 Cal. 575, remained the property of the (^ourt itself appears to have de- transferor, Mallory v. Willis, 4 termined the question of intent). N. Y. 76. 11— Bretz V. Diehl, 117 Pa. St. 14— Gottleib v. Rinaldo, 78 Ark. 589, 2 Am. St. 706; Norton v. 123, 6 n. s. 273. In re Miller & Woodruff, 2 N. Y. 153. Brown, 135 F. 868; Hallidie v. 12 — As an illustration compare Sutter St. Ry. Co., 63 Cal. 575. the cases of Morton v. Woodruff, 2 N. Y. 153, and Mallory v. Willis, 15— Hunt v. Wyman, 100 Mass. 4 N. Y. 76. 198. *See Uniform Sales Act, Section 19. 8 THE LAW OF SALES essentially different from an option to return a purchase if he should not like. In one case the title will not pass until the option is determined ; in the other the property passes at once subject to the right to rescind and return." So also when the parties have transferred possession with the intention merely that the transferee shall either sell the goods to another and return the money, or shall return the goods, the law is that title has not passed and there is no sale. The person in possession is not owner, but only an agent with authority to pass the title. Only when he does pass it is there a sale. Conversely, when the transferee of the goods is not to return them unless some contingency happens, even though he is to pay for them only as he sells them to some one else, the law is that title has passed. The former is usually called ** consignment for sale" and the latter *'sale with privi- lege of return". Pledge. — If the transferee is expected and intended by the parties to return the thing transferred unless the transferor shall fail to do something, (such as repay a sum of money received from the transferee, within a stated time,) the transaction is a ''mortgage" or ''pledge" rather than "sale" and does not pass title. The fact that the parties have themselves called the transaction a ' ' sale ' ' has comparatively little effect upon judicial determination of their intent at any time, but it seems to be of especially slight effect when the issue is between a sale or mortgage possibility. Gift. Exchange. — To constitute a sale there must be not only a transfer of title, but also a reciprocal trans- fer of money, or of something else on which the parties have placed a money value. This money recompense is not necessary to a transfer of title, but it is necessary to constitute the transfer of title a "sale". If the mone- tary recompense is absent the transaction is called by some otlicr name. If there is nothing given in exchange for the title at all, the transfer is usually denominated GENERAL PRINCIPLES 9 a "gift". If there is something exchanged for it, but no monetary value is fixed upon the exchange, the trans- action is called a ''barter and exchange". So far as the privileges, powers and duties which con- stitute ownership are concerned it makes no difference whether the transfer was by way of gift, barter and exchange or sale. But whether the transaction is a sale or a gift does make a difference when the question is whether the transfer has taken place or not. And even in this respect there is no difference between a sale and an exchange. In the case of a gift it is held that no title passes until possession has been transferred, while in the case of either sale or exchange title may pass be- fore transfer of possession — a point that is more fully discussed later. The practical importance of the distinction between sale, gift and exchange arises whenever one of those transactions is attended, as a transaction, with certain consequences which do not follow from the others. Prac- tically all cases involving a real difference and making the name important arise under statutes imposing a pen- alty upon certain "sales" which is not imposed expressly upon gifts and exchanges. Thus, a statute of Arkansas prohibited the ''sale" of hquor to minors. A minor having become possessed of a quantity of whiskey which was not to his taste, induced a saloon-keeper to give him whiskey of a different quality in exchange for that which he already possessed. This saloon-keeper was then indicted for selling liquor to the minor contrary to the statute. The court discharged the defendant, on the mere statement of facts as admitted, because the trans- action was not a ' ' sale ' ' but an ' ' exchange ' ', which latter was not forbidden by the statute.^® Under another statute 16 — Gillan V. State, 47 Ark. "sell, exchange, give, barter or 555. The court was undoubtedly dispose of" liquor, while that re- influenced in this decision by the lating to minors used the word fact that a statute relating to "sell" only. Inaians expressly forbade one to 10 THE LAW OF SALES which forbade any one either to "sell" or to "give'* liquor to a minor it was held that one was not guilty who furnished a minor whiskey in exchange for his promise to return a like quantity at a later date. The court said that the accused had neither "sold", since there was no price in money, nor did he "give", since he got some- thing in exchange.^''' The fact that some money is given in exchange together with other things, does not make the transac- tion a sale if the exchange as a whole has no monetary value placed upon it. Thus, a slave dealer exchanged two slaves which he owned plus $100 in money for two other slaves. After the transaction had been carried out, one of the parties desired to evade its effect and alleged that it was void because the dealer had no license and a statute of the state declared that all sales, made under the circumstances, without a license should be void. The transaction was held valid, however, on the ground that it was not a "sale" even though part of the exchange was in actual money. The court laid down the proposition that actual money need not pass in order to constitute a sale, that in business life real money seldom does pass, but that Avhatever is given in exchange "must be treated as so much money" and its value must be estimated in relation to money, not merely in rela- tion to the thing for which it is exchanged." As this court said, the consideration need not be in money, for the transaction to constitute a "sale", if its value is estimated in terms of money. Neither need 17 — Coker v. State, 91 Ala. 92. a statute prohibiting sales, Com. This court expressly overrules the v. Packard, 71 Mass. (5 Gray) 101; case of Com. v. Abrams, 150 Mass. even though money be given back 393,which had held precisely simi- ^^ter as a bona fide return gift lar circumstances to constitute a ^^^ "^^ ^ "^^^^ colorable evasion, «galg.. Finley v. State, Tex., 47 S. W. A "gift", even though by a 1015; Ace. Wood v. Territory of hotel-keeper through the agency of Oregon, 1 Ore. 223. a waiter and to one who expected 18 — Gunter v. Lecky, 30 Ala. to pay Is not a "sale" within 591. GENERAL PRINCIPLES 11 the estimate be in accordance with what others might value it. All that is necessary is that the parties treat it as though it were the equivalent of a speci- fied amount of money. Thus in Brunsoold v. Medgor- den^® the plaintiff had sold land to defendant for a stated price of $9600. It was agreed that the plaintiff would accept in lieu of money a certain stock of groceries valued at their wholesale cost. As a matter of fact the groceries were actually worth only about 70% of their wholesale price. Although the agreement was thus an exchange of groceries for land, mth a fictitious value set upon the groceries, the court nevertheless, by way of dictum, declared the transaction to be a *'sale" rather than a ^'barter and exchange".^" For a transaction to constitute a sale it is not essential that the thought of transferring title have been in the minds of the parties, nor that the transfer of title have been the primary motive. It is enough to give the trans- action the legal effects of a ' ' sale " if it does in fact result in a transfer of ownership of the goods.*^ 19— Iowa, 153 N. W. 163. v. Warren, 160 Mass. 533; People 20— Picard v. McCormick, 11 v. Clair, 221 N. Y. 108; Com. v. Mich. 68. As a matter of recovery Miller, 131 Pa. 118; State v. Lotti, of "purchase price" or "damages"; 72 Vt. 115. Studebaker Corp. v. Gollmar, 150 Contracts to manufacture ar- N. W. 442, 159 Wis. 226. tides are held, in many jurisdic- 21 — The furnishing of food in a tions, to be "sales" within the restaurant is a "sale", so that an meaning of the Statute of Frauds, action for breach of warranty can Under the Statute, which re- be maintained. Friend v. Childs quires certain contracts of "sale" Co., Mass., 120 N. E. 407; Barring- to be in writing, the interpretation ton V. Hotel Astor, 171 N. Y. S. of the word is somewhat more 840; Leahy v. Essex Co., 148 N. liberal than is its interpretation Y. S. 1063; Race v. Krum, 146 N. under penal statutes. Purcell v. Y. S. 197, affd. 222 N. Y. 410. Miner, 4 Wall. (U. S.) 513; Sursa Contra, Merrill v. Hodson, 88 v. Cash, 171 Mo. Ap. 396; Moss v. Conn. 314; Valeri v. Pullman Co., Culver, 64 Pa. 414, 3 Am. Rep. 601; 218 Fed. 519. Welch v. Bigger, 24 Idaho 169. And so that statutes prohibiting See the discussion under that "sales" of game, liquor, adulter- heading. ated milk, etc. apply. Com. v. Under the English "Profiteering Phoenix Co., 157 Ky. 180; Com. Act", the furnishing of food by a 12 THE LAW OF SALES Subject Matter of Sales. — Anything can be sold which is capable of being owned in a legal sense.^'^ The law permits the transfer of ownership of anything which it recognizes as being the objectof property rights. It makes no difference therefore whether the subject of the sale is corporeal property, so tangible as a cow, for instance, or a mere incorporeal legal right, such as an invention whose exclusive use is secured by patent, or the good will of a business. A mere ''privilege" of doing some particular thing may be transferred to another and the transaction will be called a ''sale".^^ restaurant keeper has been held to be a "sale". Rex v. Birming- ham Profiteering Com., (1920) K. B. 57, 89 L. J. R. 57; so also the compounding of a prescription and transfer of the resultant product, Rex V. Wood Green Profiteering Com., (1920) K. B. 55, 89 L. J. R. 55. 22 — There are some rights which can be enforced against any per- son, and hence come within some definitions of a right in rem, but which so completely appertain to the individual in whose favor they run that they can not conceivably be transferred. Such, for instance, is the right of privacy and the right to a reputation — as distinct from business good will. While it may be said that these, although rights in rem, are incapable of transfer of ownership and there- fore can not be the subject of a sale, it may also be said that they are not the subjects of ownership in a legal sense. The issue is, however, purely one of terminol- ogy; if such rights may be said to be "owned" they must be ex- cepted from the statement of the text, which is in that case too broad in its unqualified form. 23 — In Hathaway v. Bennett, 10 N. Y. 108, plaintiff had "bought" from X the privilege which X had by agreement with Bennett of selling the latters newspapers through a certain district. The suit was occasioned by Bennett's refusal to supply papers to plaintiff. The contract held that Bennett might revoke the priv- ilege at any time but that so long as it did exist it was capable of "sale" and its ownership had been transferred to plaintiff so as to make him owner of it. In Hoyt V. Holly, 39 Conn. 326, 12 Am. Rep. 390, plaintiff, a phy- sician had agreed with defendant that in return for payment by defendant he would introduce de- fendant to his patients and trans- fer to him the good will of so many as he could and would him- self remove from practice. The issue was only whether such a contract was valid and enforcible and the court upheld it, calling it a "sale" of the good will. The transfer of an interest in a partnership was called a "sale" in Van Brocklin v. Smeallie, 140 N. y. 70, and declared to be effec- tive. Ace. Slidell v. McCoy's Exs. GENERAL PRINCIPLES 13 Choses in Action. — Some effort has been made, from time to time, to distinguish between the transfer of property which exists because of a right of legal action against all persons generally and that property which consists only of a right of legal action against some particular person or persons. The former are techni- cally called property rights, or rights in rem, and the latter are called rights in personam. At one time the latter, that is, the right of action against a particular person, could not be transferred. It could be exercised only by the person in whom it had been originally created. That is to say, the possessor of the right could go through all the motions and follow the forms of transferring it to another but the courts would refuse to allow that other to exercise it. In legal effect, therefore, it was not transferred. By a progress of development which need not here be discussed, it has come to pass that at the present day such rights of action can be transferred 80 that they may be enforced by the transferee in the name of his transferor at least, and usually in his own name. But because of the fact that at one point in the development of the legal privilege of transferring them they could be enforced by the transferee only in the name of the transferor, and the transferee could not be said therefore to be ''owner" of the right of action, one finds frequent intimation that such rights can not be ''sold". "Assignment" of the right was the proper term for the transfer. But since the priv- ilege of transferring the right of action has come to the point where the transferee can exercise it in his own name he has acquired at least one of the rights of owner- ship and is generally called "owner". Likemse, the transfer is indiscriminately called "assignment" or "sale". It is immaterial whether the transaction be 15 La. 340. The right to receive sale to satisfy a judgment against a part of rents collected by a re- the owner of the right, Verplanck ceiver may be "sold" at judicial v. Verplanck, 29 N. Y. Sup. Ct. 104. 14 THE LAW OF SALES called a **sale" or not; the fact is that the legal power to exercise certain rights of suit can now be transferred from one person to another.'^** Contractual Features. — The law does not recognize a transfer of absolute ownership in a thing except as the result of mutual intention. The original owner must intend, actually or apparently, to give up his ownership in favor of the new party, and the new one must have a like intention to receive it.^^ (One possible exception is that of judicial sale wherein the ownership is trans- ferred by order of the court regardless of the desires of the present owner.) Since agreement is essential to change of legal title, it may be said that every sale, in the sense of an accompHshed transfer of title, is the result of an agreement to sell. This agreement may be coincident with the transfer itself, or it may precede the actual transfer by a greater or less moment of time. When the agreement and trans- fer are coincident, the same acts of the parties serve to effectuate the transfer and to demonstrate the intent itself. If, for instance, B should walk into a store, pick up an article of merchandise, hand the proper price to the proprietor with the latter 's acceptance of it, and leave the store with the article in his possession, all without a spoken word, there would coincidently both be demonstrated a mutual intent that title should be 24 — It does not seem necessary he does get the fundamental to the particular subject matter of right of enjoyment, see the con- this book to discuss in detail the troversial articles by Messrs. Cook levelopment of the power to trans- and Williston in 29 Harvard L. R. fer rights in action nor the partic- 816, 30 Harvard L. R. 99, 30 Har- ular limitations still existing, all vard L. R. 449. of which can be found in any good 25 — A finder of property does work on contracts. As to the not acquire an absolute ownership various correlated rights, other since his rights are subordinate than the mere right of suit, which to those of the original owner even the transferee of a right to sue though he has all the rights of acquires, and particularly whether owner in respect to other persons. *See Uniform Sales Act, Section 76, "Goods". GENERAL PRINCIPLES 15 transferred and the transfer itself would be legally accomplished.^^ On the other hand, the parties may enter into a present agreement that ownership of a thing shall be trans- ferred at some time in the future. This agreement, whether carried into execution coincidently with' its formation, or subsequently to be fulfilled, has all the characteristics of an ordinary contract. If it has been executed and the transfer of title effectuated in accord- ance with it, the rules in respect to executed contracts apply. If the transfer has not been made, the rights of the parties are determined in accordance with the general rules of contracts to be performed. There must be the usual capacity of parties, consideration, absence of fraud or mistake and the like. This preliminary and necessary contract is not discussed as such in this book, but must be studied in works particularly devoted to that subject. It is sufficient here to call attention to the fact that there must have been an effective contract to transfer the own- ership, before the law ivill, by recognition thereof, create an actual transfer of the ownership.^ 26— Peelers v. State, 154 Wis. 111. CHAPTER II Transfer of Title Rules for Determining the Passing of Title Passing of Title. — Assuming that the parties liave so acted that there is a contract to which the law can give effect, the question at once arises whether the transfer of title has been accomplished. This is the issue on which, fundamentally, most of the htigation over sales has been based. On the answer to it rest, of course, the liabilities and rights of the parties in respect to the thing concerned. The following discussion is necessarily divided into two sections. It is obvious, as a matter of logic, as well as a rule of law, that courts can not consider ^vhere the ownership of a thing resides unless they know what par- ticular thing it is whose title is in question. Until the parties themselves have decided just what particular thing they intend to transfer, no court can say whether that thing has been transferred. Often the controversy is really duplex; first, w^hether the parties have in fact agreed upon the particular thing, and, second, whether if so agreed, they have transferred its ownership. The two issues can not possibly, Avith intelligence, be discussed or considered as one. The logical arrangement would be to treat the underlying question first, and to discuss the rules by which it is determined whether the particular thing has been agreed upon. But, for reasons which present themselves throughout the discussion, it seems practical msdom to treat first the passing of title, upon an assumption tlint the parties have agreed upon the spe- cific chattel affected, and then to discuss the correctness of that assumption. 16 TRANSFER OF TITLE 17 Intent Governs. — When the transaction concerns a definite and specified thing, whose ownership the seller is legally capable of transferring, the primary and funda- mental principle is, that the title will be treated as having been transferred when the parties intend it should be, and only when they so intend.* Change of Possession Not Essential. — There are no formalities or legal conditions which must be complied with before an intent to pass title will be given effect by the courts.! (But see the discussion of the ''Statute of Frauds".) It is not necessary, for instance, that pos- session be transferred for the ownership to be passed. Historically, the rule was otherwise ; the rights of owner- ship were inseparable from physical possession.^ In the case of a gift, already commented on as a transfer of ownership without anything received in exchange, this original necessity of a change of possession still exists. Courts will not recognize title as having passed by way of gift unless and until the possession of the thing has passed to the recipient of the gift. But it is now thor- oughly settled that where there is a reciprocal exchange of something, even though it be only a promise, for the thing whose title is to be transferred, a change of pos- session is not essential to vest in the transferee, at least as against the transferor, rights and privileges which usually connote ownership.^ 1— See Pollock & Maitland, II, 531; Shrimer v. Meyer, 171 Ala. 181. 112; Wade v. Moffett, 21 111. 110, 2 — The history of this develop- 14 Am. Dec. 79; VanBrocklin v. ment is summed up by Prof. Ames Smeallie, 140 N. Y. 70, 72; Baker in 8 Harvard L. R. 252, 258. Per- v. McDonald, 74 Neb. 595, 1 L. R. kins V. Halpren, 257 Pa. 402, 101 A. (n. s.) 337; Bradley v. Wheel- Atl. 741; Com. V. Hess, 148 Pa. 98, er, 44 N. Y. 495; Bertelson v. 17 L. R. A. 176; Cope's Est, 191 Bower, 81 Ind. 512; Schwab v. Pa. 589; Brewer v. Mich. Salt Oatman, 113 N. Y. S. 910; Assn., 47 Mich. 526; Sherwood v. Lickbarrow v. Mason, 2 T. R. 63; Walker, 66 Mich. 568, 11 Am. St. 1 H. Blackstone 357; 2 Id. 211; ♦See Uniform Sales Act, Section 18, (1), (2), 19. tSee Uniform Sales Act, Sections. 18 THE LAW OF SALES It is true that if possession is not passed to the buyer, third persons acting in good faith may acquire from the seller the rights of ownership as against even the first buyer. In a sense, therefore, until possession actually passes to the buyer the seller has still the legal power to control the right to possession. And so, in a sense, he has practical ownership. If he chooses fraudulently to sell to a third person who takes possession, that person has, in some jurisdictions, the legal right to keep posses- sion, and, hence, has ownership. This might be put upon the ground either that the original buyer's rights are set aside in favor of the third person because he failed to take possession, or that title remained in the seller because of his continuing in possession and could still be passed to the third person. The decisions themselves are not clear as to what ground they rest on. Some of them do use expressions which make it appear that they consider ''ownership" never to have passed to the original buyer because he did not have possession. At most, however, this apparent conflict is one of termi- nology only — namely, how completely and exclusively 5 T. R. 683; Meade v. Smith, 16 would be after a deUvery of goods Conn. 345; Whitcomb v. Whit- in pursuance of a general con- ney, 24 Mich. 486; Poling v. Flan- tract. The very appropriation of agan, 41 W. Va. 191; Dixon v. the chattel is equivalent to de- Yates, 5 B. «fe Ad. 313, 340, "I take livery by the vendor, and the as- it to be clear that by the law of sent of the vendee to take the England the sale of a specific specific chattel, and to pay the chattel passes the property in it price, is equivalent to his accept- to the vendee without delivery. ing possession. The effect of the * ♦ * Where there is a sale of contract, therefore is to vest the goods generally, no property in property in the bargainee." Fel- them passes till delivery, because lows v. Bost. & Me. R. R., 78 N. until then the very goods sold are H. 594, 98 Atl. 481; Johnson v. not ascertained; but where, by Tabor, 101 Miss. 78; Young v. In- the contract itself, the vendor golsbe, 208 N. Y. 503; Townsend appropriates to the vendee a spe- v. Hargraves, 118 Mass. 325; clfic chattel, and the latter thereby Briggs v. U. S., 143 U. S. 346. agrees to take that specific Contra, dictuvi only, Georgia chattel, and to pay the stipu- Marble Works v. Minor, 128 Ark. lated price, the parties are then 124, 193 S. W. 498. in the same situation as they TRANSFER OF TITLE 19 must one control the legal right of possession in order properly to be called the legal "owner". The courts are agreed, that, whatever he be called, the buyer, even though he does not take possession, has all the customary rights and liabilities of ownership except as to certain third per- sons who take possession from the seller in good faith.' Furthermore, the overwhelming majority of opinions speak of him as having acquired the ''ownership". Ac- cordingly his rights will be called ' ' o^vnership " in this discussion. The ownership may pass to the buyer, if the parties so intend, even though by their agreement he has not even the right to possession, without further act, such as payment of the price.* Likewise, certain rights generally appertaining to title will pass to the buyer even though the goods are in the adverse possession of a third person, and the transaction is generally called a '*sale".^ Payment Not Essential.— PajTnent is not essential to the passing of title when the parties have not intended that it shall be.^ Presumptions of Intent.— This rule, that the intention 3 — The rights of such third per- 6— Thompson v. Brannin, 94 sons are discussed Post, p. 212. Ky. 490; Allen v. Rushfort, 72 4— Clark V. Greeley, 62 N. H. ^eb. 907; Bayne v. Hard, 79 N. Y. 394; State v. MuHin, 78 O. S. 358, g. 208; Richardson v. Insurance 125 Am. St. 710; Obery v. Lander, co., 136 N. C. 314, but compare, 179 Mass. 125; Lester v. East, 49 Hughes v. Knott, 138 N. C. 105; Ind. 588; Tarling v. Baxter, 6 Barn. Parker v. Davis, 13 O. C. C. R. & Cress. 360. 631; Tarling v. Baxter, 6 Barn. 5 — Cartland v. Morrison, 32 Me. & Cress. 360; see also cases cited 190. But compare the decisions, above and those referred to in based upon public policy, in subsequent sections. O'Keefe v. Kellogg, 15 111. 347; Mc- By statute of some states pay- Cully V. Hardy, 13 111. Ap. 631; ment is made an essential to the Erickson v. Lyon, 26 111. Ap. 17; passing of title of certain kinds Young V. Ferguson, 11 Ky. 298. of goods. See the discussion under See the contention of Mr. Ames, "conditions precedent", Post, p. 33. that "title" does not pass, in 3 Harvard L. R. 342. 20 THE LAW OF SALES of the parties determines when title passes to specific property, is simple and explicit enough, and involves no difficulty when the parties have made their intention clear. Controversy arises only where the parties can not agree as to what their intent was, or had no conscious, no real intent as to title at all. If the parties had an actual and conscious, although unexpressed, intent, it would properly be the function of a jury to determine what it was, as a question of fact. But, it is common experience that the parties to a sale very seldom have any conscious thought whatever as to the exact point of events at which title is to pass. The ultimate result is all that enters into their calcula- tion. It is impossible in such case to speak of the "fact" of their intent. There is no such fact. Yet there must be some point in the transaction at which title passed, and it becomes the duty of the court to say what this point was. This is not a finding of fact, but rather a decision of what the court thinks would have been the fact if the parties had thought about the matter. In other words, it is a judicial conclusion as to what normal men in like circumstances would prohahly have intended had their attention been directed to the matter. This distinction between finding the actual fact of intent by a jury, and a conclusion by the court of what might have been the normal intent had there been a conscious one, has not been clearly made by the courts. Some courts have left the question of intent to the jury, without discussion of reason for so doing, appar- ently as a matter of course, as though it were a question of fact.'' Generally, however, where the matter is left to 7 — In Graff v. Fitch, 58 111. 373, was not intended to pass, and the the trial court left the matter with jury should have been left to de- the jury with instructions that, if cide the real intention. In Rich- they found certain facts as alleged, ardson v. Ins. Co., 136 N. C. 314, title did not pass. This was held it was held that the question of error by the Supreme Court on intent should have been left to the ground that such facts only the jury. See Stewart v. Hen- created a presumption that title ningson Produce Co., 88 Kan. 521, TRANSFER OF TITLE 21 the jury at all, it is left with specific instructions that a strong presumption of intent arises from certain facts.' The great majority of courts, without specifically say- ing anything about it, treat this intent as a question to be determined by the court according to established rules of presumption. These rules of presumption are burlt upon certain factors which are frequently recurrent in transactions of sale, and which, because of their common recurrence, furnish standards that will apply to nearly every case. Form of Agreement. — The tense of the words used does not have any material weight with the court. In Tarling v. Baxter, for instance,® it was held that title had passed, although the form of the agreement was to pass title in the future, being, '*I have * * * agreed to sell" and '' I have * * * agreed to buy". In Sher- win V. Mudge^° the w^ords were ''A sells and B buys", but the court held that there was no intent to pass the title at that time.*^ Nothing Remaining to be Done by Seller. — In general, if nothing remains to be done, under the terms 50 L. R. A. (n. s.) Ill; Wilkin- were undisputed — thus leaving for son V. Holiday, 33 Mich. 386; the jury only the finding of the Morrow v. Reed, 30 Wis. 81 ; Cun- overt facts from which the court ningham v. Ashbrook, 20 Mo. 553; might deduce the intent. Accord, Weld V. Came, 98 Mass. 152; Bur- Miller Milling Co. v. Butterfield, rows V. Whitaker, 71 N. Y. 291; etc.. Co., 32 Idaho 265, 181 Pac. Andrew v. Dieterich, 14 Wend. 703 ; Pittsburgh etc. Co., v. Cudahy (N. Y.) 31; Moats v. Strange Co., 260 Pa. 135. Bros. Hide Co., 185 la. 356, 170 N. 9—6 Bam. & Cress. 360. W. 456. 10—127 Mass. 547. 8 — Cunningham v. Ashbrook, 11 — Walti v. Gaba, 160 Cal. 324; 20 Mo. 553; Burrows v. Whit- Hanson v. Meyer, 6 East 614, "I aker, 71 N. Y. 291; Lingham v. have bought" — title held not to Eggleston, 27 Mich. 324. In Cas- have passed. Piano Co. v. Piano sinelli v. Humphrey Supp. Co., 43 Co., 85 O. S. 196, "I hereby trans- Nev. 208, 183 Pac. 523, it was held fer my full right of ownership" to be a question for the court if held not indicative that title was it involved the construction of a passed, written contract, or if the facts 22 THE LAW OF SALES of the contract, except for the buyer to pay the agreed price and take possession, the courts assume, in the absence of any showing of contrary intention, that title has passed. The presumption is that the parties intended the title to pass as soon as everything else was done according to contract, regardless of the physical posses- sion, or of actual payment.^^* But if parties clearly in- tend that title shall not pass until payment, the courts will give effect to that intention. -Something Remaining to be Done by Seller. — On the other hand, it may be said broadly that whenever the parties have agreed that the seller is to do some act before the buyer could logically and naturally, accord- ing to the agreement, take possession, a strong legal pre- sumption arises that they did not intend title to pass until that act should be done. The reason for this presumption is variously stated, and is not definitely ascertainable. But, although the courts which follow this rule do not themselves state the reason for it, there is a possible reason which very logically justifies this presumption of intent. Ownership carries with it the risk of loss. It is a fair presumption that a buyer would not intend to take title to goods and to assume this risk of loss, unless he could have also the right to protect his goods from loss without violating the terms of the agreement. In cases where the seller is to 12 — Tarling v. Baxter, 6 Barn, fine this presumption to cases in & Cress. 360; VanBrocklin v. which it positively appears that Smeallie, 140 N. Y. 70; Baker v. payment was not to be immedi- McDonald, 74 Neb. 595, 1 L. R. A. ate, as where a term of credit (n. s.) 474. Piano Co. v. Piano Co., ^^ expressly given. See the dis- 85 O S 196 cussion under "Cash Sale", Post, Contra, dictum only, that pay- P- 33- Paul v. Reed, 52 N. H. 136; ment is a prerequisite to passing ^ich. Cent. Ry. v. Phillips, 60 111. of title, Hanson v. Meyer, 6 East 1^^- 614. See also cases cited ante, that A number of decisions, particu- title may pass before payment and larly the very earlier ones, con- delivery. *See Uniform Sales Act, Section 19, Rule 1. TRANSFER OF TITLE 23 weigh or otherwise measure the goods in order to deter- mine the total price, it is presmnable that the agreement contemplates the seller's keeping possession until he does do such weighing. If, then, the buyer should, without the seller's permission, take possession of the goods be- fore the seller had weighed them, he would violate the implied terms of the agreement. It is not reasonable to assume that the buyer intended to take title to goods at a time when he could not physically protect them from loss without violating his agreement with the seller. To say that legally he could take possession without violation of the contract, because he has title, is begging the ques- tion. By the terms of the agreement he can not take possession until the seller has done the weighing and therefore can not act freely to protect the goods. The presumption that he does not intend to take title under such circumstances has, therefore, a thoroughly sound reason for its existence. In accordance with this general rule, if goods whose total measurement is unknown are sold at a stipulated price per unit, and it is the duty, or the privilege, of the seller, with or without the buyer's aid, to weigh or other- wise measure the mass in order to determine the total price, it is presumed that title was not intended to pass until that should be done. In the cases coming within this rule it may be observed that the agreed control of possession is in the seller. The buyer is not entitled to take possession until the seller shall have exercised his privilege, or performed his duty, by determining the total price. On the action of the seller therefore depends the agreed, as possibly distinct from the legal, right to possession. The buyer can not tender payment and take possession — and so protect himself from loss — until the seUer has determined what the total price is. The same thing is true when the seller is to ascertain the quality of the goods in order to fix the actual price, and, in gen- eral, when the seller is the one who is to do anything whatever that is necessary to a determination of the 24 THE LAW OF SALES total price to be paid. In all such cases the legal pre- sumption is that the parties did not intend title to pass until the thing should have been done."* As this rule is practically founded on the decision in Hanson v. Meyer,^* and that was not a presumption of intent, but rather a rule that title could not pass till payment, it may be doubted if there is any real reason, other than judicial custom in following precedent, behind the present rule. However, the rule itself exists as stated, and it can at least be justified by the reason suggested by the writer. Even if the measuring or other thing to determine 13— Kein v. Tupper, 52 N. Y. 550 (quality) ; Frost v. Woodruff, 54 m. 155; Lester v. East, 49 Ind. 588; Smith v. Wisconsin Invest- ment Co., 114 Wis. 151; Robbins V. Chipman, 1 Utah 335 dictum; Wesoloski v. Wysoski, 186 Mass. 495; Simmons v. Swift, 5 Barn. & Cress. 857. In Hanson v. Meyer, 6 East 614, the rule is apparently put on the ground that the buyer could not pay the price till the goods were weighed and that, contrary to the general rule, title could not pass till payment. Boaz & Co. V. Schneider & Co., 69 Tex. 128, appears to be contrary to this rule, but is not necessarily so. The court does say, "Where the entire mass is sold and must be measured simply with a view to the ascertainment of its price for the purpose of a settlement, the title passes". In expression this is in conflict with the presumption as stated. The actual decision, however, could have been reached without any conflict. The other circumstances were easily suffi- cient to rebut the usual presump- •See Uniform Sales Act, Section tion, and, indeed, it appears that the measuring was not to have been done by the seller at all but by the buyer. The form of state- ment was founded only on the veriest dictum in Cleveland v. Williams, 29 Tex. 204. Lassing v. James, 107 Cal. 348, holds with some confusion of lan- guage, that title had passed des- pite necessity of weighing by both parties, to determine total price. The opinion was based on a mere dictum In Blackwood v. Cutting Packing Co., 76 Cal. 212, referring to lack of identification of the property. See also Groat v. Gile, 51 N. Y. 431. In this case the court confounded the presumption with the rule that title can not pass till identity is established and, the latter having been satis- fied, ignored the former. Sanger v. Waterbury, 116 N. Y. 371. As soon as the weighing or measuring has been done by the seller title passes instantly. Thompson v. Brannin, 94 Ky. 490 dictum. 14—6 East 614. 19, note. TRANSFER OF TITLE 25 the price is to be done by the seller, if it is merely to adjust an agreed proximate price, no presumption that the seller intended to keep title arises. In so far as this rule is confined to cases in which the buyer is permitted, by the contract, to take possession at the agreed approxi- mate price, without awaiting further weighing, etc., this exception is quite in accord vdth the underlying reason suggested.^^ Neither is it presumed that the seller intended to keep title if the determination of the price is a mere mathe- matical calculation not requiring him to retain possession of the goods.^^ In regard to all these statements of rule, it must be said that there is much conflict and utter confusion of ideas in the decisions and opinions. It is sometimes stated, that if the seller is to do some- thing to complete the goods, or to put them in a deliv- erable state, title is presumed not to have passed."* The reason for this rule may be that suggested above — that the buyer would hardly intend to take title and its at- tendant risks while barred from immediate posses- sion by the seller's right or duty to do something which would necessitate his possession — or it may be because the thing whose title the buyer has contracted to accept is not in existence till the seller's work is done. Thus, if the sale were existing rough castings, to be polished by the seller, it might be either that the parties considered the rough castings as the thing sold and purchased, with a collateral agreement that the seller should polish them, or that they intended to transfer title only to pol- ished castings made from the rough castings pointed out. If they had in mind the former transaction, if title did not pass it would be for the former reason. But if they had 15 — Lingham v. Eggleston, 27 16 — Bradley v. Wheeler, 44 N. Mich. 324; Swanwlck v. Sothern, Y. 495. 9 Adolph. & El. 895. 17— Blackwood v. Cutting Pack- ing Co., 76 Cal. 212. *See Uniform Sales Act, Section 19, Rule 2. 26 THE LAW OF SALES in mind the second transaction, obviously there would be no title to pass until the things contemplated — the polished castings — should come into existence through the seller's having done the work. Even in clear cases of fact, however, the particular reason on which the courts hold that title has not passed is usually indeter- minable.*® Of course, if the facts clearly indicate that the parties intended title to pass before the seller's further duty should be performed the courts will give effect to that in- tention.*® -Something to be Done by Buyer. — The presump- tion that there was no intent to pass title does not arise if the weighing, measuring, etc., to determine the total price is to be done by the buyer. This, again, is in pre- cise accord with the underlying principle suggested. If the buyer is to do the weighing, etc., the determination of the total price is within his o^vn vohtion. It is true that actually the seller may not let the buyer proceed, but by the terms of the agreement, as distinct from phys- ical power, the buyer has the power to control possession, can take possession when he chooses, without waiting for the seller to act, and is thereby indicated as the intended owner.*° However, as the rule, that title would not pass if there was something to be done by the seller, originated in the idea that determination of total price was preliminary to payment, which was itself a prerequisite to the passing of title, some courts have followed the original statement without making any distinction of those cases where it is to be done by the buyer. Like\vise there is considerable statement to the effect that if something is to be done 18 — Blackwood v. Cutting Pack- 495; Lingham v. Eggleston, 27 ing Co., 76 Cal. 212. Mich. 324; Burrows v. Whitaker, 19— Byles v. Colier, 54 Mich. 1; 71 N. Y. 291; Odell v. Boston & Owen V. Dixon, 11 Ky. L. Rep. 902. Maine R. R., 109 Mass. 50; Turley 20— Bradley v. Wheeler, 44 N. Y. v. Bates, 2 Hurl. & Colt. 200. TRANSFER OF TITLE 27 by either party to determine the total price, title is pre- sumed not to pass regardless of whether it is the seller or the buyer who is to do the necessary acts. This is apparently derived from a confusion with the rule of law that until goods have been identified, as by measur- ing or sorting from a larger mass, title can not pass. But again the conflict is for the most part one of expres- sion only and in practically every case where the broad statement appears it will be found that other factors would themselves have precluded a presumption of intent to pass title.*^ If the parties are to act jointly in doing whatever is necessary to determine the price it is presumed they intended the title to stay where it was until such acts should be done.^^ Delivery to Buyer. — If there has been actual deliv- ery to the buyer any presumption arising from the neces- sity of measuring, or doing other things, is rebutted.^'' Rebutting Circumstances. — These rules, like those 21 — Andrew v. Dieterich, 14 Buffington, 103 Mass. 62; Macom- Wend. (N. Y.) 31, has been cited as ber v. Parker, 13 Pick. (Mass.) in conflict but the case itself 175; Scott v. Wells, 6 W. & S. (Pa.) shows that payment had been 357; Leonard v. Davis, 66 N. Y. made a condition precedent to the 476; Farmers Phosphate Co. v. passing of title. Ballantyne v. Gill, 69 Md. 537, 1 L. R. A. 767; Appleton, 82 Me. 570, seems flatly Cunningham v. Ashbrook, 20 Mo. In conflict. In McFadden & Bro. 553; Turley v. Bates, 2 Hurl. & V. Henderson, 128 Ala. 221, the Colt, 200. facts show that the seller was ob- Contra in expression although ligated to do certain other things, the same decisions could have which he did not do, before the been reached on other and con- buyer could weigh. In Hoffman v. sistent grounds stated, are An- Culver, 7 111. Ap. 450, the real rea- drew v. Dieterich, 14 Wend. (N. son for the holding was that "pay- Y.) 31; Hoffman v. Culver, 7 111. ment was a condition precedent to Ap. 450; Ballantyne v. Appleton, the passing of title". 82 Me. 570. 22— Lingham v. Eggleston, 27 23— Keim v. Tupper, 52 N. Y. Mich. 324; Allen v. Greenwood, 550; H. M. Tyler Lumber Co. v. 147 Wis. 626; Mount Hope Co. v. Charlton, 55 L. R. A. 301. 28 THE LAW OF SALES referred to later on, are rules of presumption only and are not rules of title. They do not imply that title must pass if nothing remains to be done, nor that it can not pass if something is still to be done by the seller. They merely furnish formulae by which, in the absence of any indication of real intent, the courts can reach a consist- ent assumption of what the parties probably would have intended had they thought about the matter. This pre- sumption is fully subject to rebuttal by any particular circumstance in the case that leads the court to believe the parties would normally have intended otherwise.** Likewise, a fortiori, these rules for consistently ascer- taining mere constructive intention give way before any- thing which shows a contrary real intention. Some few cases seem to be opposed to the proposition that these rules are presumptions only. Their verbiage states that title has passed, or has not passed, because of the circumstances, as a matter of law. To some extent this is due to a feeling that unless credit is expressly given title can not be presumed to have passed till pay- ment has been made, and that until the price is deter- mined payment can not be made.*^ But this, as has been noted, is in conflict with the general rule that title may have passed even though payment has not been made, and out of harmony with the cases holding that no pre- sumption adverse to the passing of title arises when the buyer is himself to ascertain the price. Examination shows this statement of irrebuttable rule to be usually verbiage only and that in the particular case the pre- sumption is in fact unrebutted and, as a presumption only, would lead to the same result.'*® The writer does not 24 — Wilkinson v. Holiday, 33 (n. s.) 1. Martineau v. Kitchin, Mich. 386; Byles v. Colier, 54 L. R. 7 Q. B. 436; Lingham v. Mich. 1; Graff v. Fitch, 58 111. 373; Eggleston, 27 Mich. 324; Ellis & Lynch v. Merrill, 72 W. Va. 514, 46 Myers Lumber Co. v. Hubbard, 123 L. R. A. (n. s.) 192; Morrow v. Va. 481, 96 S. E. 754. Reed, 30 Wis. 81; State v. O'Neil, ^ 58 Vt. 140; many authorities are 25— Ante, p. ^4. collected in the note in 26 L. R. A. 26— Hamilton v. Grordon, 22 Ore. TRANSFER OF TITLE 29 know of an accepted case in which evidence sufficient to rebut the presumptions has been ignored on the ground that the rule was conclusive and not presumptive. Much of the confusion of expression arises from confusion in thought wdth the rule of law that title can not pass, whatever the intent, until property has been identified. Sometimes this identification is to be by measuring off from a larger lot and such measuring by way of identifi- cation has been confused with the measuring of identi- fied property in order to ascertain total price. The ensuing conflict of expression is unfortunate, but no real conflict of holding seems to have arisen.^' Delivery to Carrier. — The delivery of property to a carrier for transportation to the buyer, in the absence of anything else, raises a presumption of intent to pass title, if it has not already passed. As the matter of passing title to property by delivery to a carrier is inextricably interwoven with that of specification of property by such delivery, the topic is left for discussion under the latter subject. Agreement by Seller to Deliver. — An under- taking by the seller to deliver the goods to the buyer at a particular place seems occasionally to have led to a hold- ing that title did not pass until such delivery had been accomplished. In Gibson v. Inman Packet Co.,^* the plain- tiff liad sold cotton to B ''to be delivered at N in mer- chantable shape". It was delivered to the defendant, as a 557; Joyce v. Adams, 8 N. Y. 291; or left to a jury under proper in- Pinckney v. Darling, 3 App. Div. structlons? There appears to be (N. Y.) 553; Frost v. Woodruff, no definite answer to this. In 54 111. 155. some cases the decision has been 27 — If there are facts in the made by the court. In some cases particular case which it is argued it has been left to the jury. show a real intent, in conflict with Lynch v. O'Donnell, 127 Mass. the ordinary legal presumption, is 311; Lingham v. Eggleston, 27 the decision whether they do in Mich. 324. truth suffice to rebut that pre- 28—111 Ark. 521, Ann. Cas. 1916 sumption to be made by the court, A 1043. 30 THE LAW OF SALES carrier, consigned to B at N, and was damaged through the negligence of the defendant before delivery. On suit by the plaintiff to recover for this loss the defendant contended that the plaintiff was not the proper person to bring suit as he had parted with title by his shipment to the buyer. The court admitted the primary presump- tion to be that title had passed, but held that a contrary intention was shown by the agreement to deliver in mer- chantable shape.^^ In Brown v. Adair ^° the buyer of fertihzer set up, in defense to an action for the purchase price, a statute of the state making such sales void unless certain tags were attached to the bags of fertilizer at time of sale. The seller proved that tags were attached at time of contract to sell. The court held, however, that inasmuch as the sale was to be "f. o. b." at a certain place the sale was not consummated till delivery to that place and it must be shown that tags were attached at that time.^^ The effect of an undertaking to deliver is, however, like other matters, merely a circumstance evidencing intention in regard to title and it will not prevail if other evidence points to a contrary intent.^^ Some courts when faced with an issue of the effect upon the passing of title of an obligation to deliver have left it to the jury to say what intent was demonstrated by the agreement as to delivery, coupled with all the other circumstances.^' This is quite in accord with the rule laid down by some courts that where more than one inference of intent can be drawn from undisputed facts the question of intent must be left to the jury. But those courts which decide 29— Accord, Garvan v. N. Y. C. 30—104 Ala. 652, 16 So. 439. & H. R. R. R.. 210 Mass. 275, 31— Accord, Ala. Natl. Bk. v. holding that seller's "obligation Parker, 146 Ala. 513. to deliver" caused title to remain 32 — McElwee v. Metropolitan in him so that he could sue the Lumber Co., 69 Fed. 302; Terry v. carrier for negligence. Westmore- Wheeler, 25 N. Y. 520. land Coal Co. v. Syracuse Lt. Co., 33 — Blakiston v. Davies, Turner 145 N. Y. S. 420 semUe. & Co., 42 Pa. Sup. Ct., 390. TRANSFER OF TITLE 81 for themselves that an intent not to pass title is evi- denced by an undertaking to deliver evidently feel that a rule of inference has grown up in respect to it, just as the prima facie inference that intent to pass title is evidenced by delivery to a carrier has become a rule of law and is not left to the jury.** While the circumstance of a seller's agreement to deliver to a particular place is frequently recurrent, there is comparatively little precedent which shows the judicial idea of its effect on title because the question of title seldom arises. When a seller has contracted to deliver at a certain place as an integral part of the con- sideration for the buyer's promise to pay, obviously he can not recover the contract price, whether title has passed or not, until he has made delivery. Usually the proinise to dehver is inseparable from the promise to pass title, and both promises form the single considera- tion for the promise to pay. Therefore in cases arising between seller and buyer themselves courts usually decide whether there is an obligation to deliver or not (and whether, if there is, it has been accomplished) as a condition precedent to recovery, and they do not pretend to pass upon the question of title. That a seller who has failed to deliver as agreed in the contract can not recover the contract price is settled.*^* Whatever be the rule as to the effect of a seller's undertaking to deliver at a particular place, it must first be determined whether the seller did assume such an obligation. If there is doubt as to the terms of the agreement the question should, of course, be left to the 34— Blakiston v. Davies, Turner Drug Co. v. Priesmeyer, 151 Mo. & Co., 42 Pa. Sup. Ct., 390; Danne- App. 484; Westmoreland Coal Co. miller V. Kirkpatrick, 201 Pa. 218; v. Syracuse Lt. Co., 145 N. Y. S. Garvan v. N. Y. C. & H. R. R. R., 420, which case appears to have 210 Mass. 275. been decided on the issue of title, 35 — Braddock Glass Co. v. Irwin rather than on non-performance of & Co., 153 Pa. 440; Devine v. a condition precedent; McLaugh- Edwards, 101 111. 138; Hessig-Ellis lin v. Marston, 78 Wis. 675. *See Uniform Sales Act, Section 19, Rule 5. 32 THE LAW OF SALES jury. When the question turns not on disputed terms of an agreement, but on a construction of the meaning of an admitted agreement, the issue is decided by the court. A common expression in agreements is that the goods are to be delivered **f. o. b." at a certain place. This is interpreted to mean that freight is to be paid to that place by the seller. As to what it means in respect to the seller's obligation to make safe delivery to that place, as a condition of the contract, courts are not at all agreed. If the agreement is 'Ho deliver, f. o. b." it is clearly an undertaking, as it reads, to deliver. But the conflict is over agreements not so clear, as where the contract is to ''sell" at a named price, "f. o. b. destina- tion". Some courts have held that such an agreement implies an obligation to deliver.'^ Others have decided the contrarj^ and held that despite such a term in the con- tract title passes on delivery to the carrier according to the usual presumption.^'* Conditions Precedent to Passing of Title.— When the agreement of sale clearly indicates, expressly or impliedly, that payment is to be made "on delivery of possession" there is much conflict as to whether it shall be presumed that the parties intend payment as a condi- tion precedent to passing of title as well as to the deliv- ery of possession. As has already been noted, the fact that delivery of possession has not been made, nor the price paid, does not preclude the passing of title. On the contrary, title is presumed to have passed if nothing remains to be done by the seller, despite non-delivery and non-payment. Even the fact that the buyer can not 36— Ala. Natl. Bk. V. Parker, 146 agreement that buyer might de- Ala. 513 : Brown v. Adair, 104 Ala. duct cost of freight from purchase 652. price held not to prevent title 37 — Burton & Beard v. Naco- passing on shipment; Neimeyer doches Co., — Tex. Civ. Ap. — , Lumber Co. v. Burlington R. R., 161 S. W. 25; Twitchell-Chaplin 54 Neb. 321; U. S. v. Andrews & Co. v. Radovsky, 207 Mass. 72, Co., 207 U. S. 229. *See Uniform Sales Act, Section 5. TRANSFER OF TITLE 33 take possession until payment does not necessarily indi- cate that title has not passed. But a stipulation for "cash on delivery" may denote an intention not to pass even title until payment. As one court puts it,^^ ''A sale for cash is not necessarily a conditional sale. The phrases 'terms cash' and 'cash down' may or may not import that payment of the price is made a condition precedent to the transfer of the title, according to the intent of the parties. If by the use of these terms the parties understand merely that no credit will be given, and that the seller will insist on his right to maintain possession of the goods until the payment of the price, the sale is still so far completed and absolute that the property passes; but if it is to be understood that the goods are to remain the property of the seller until the price is paid, the sale is conditional and the title does not pass". This statement is, of course, in absolute accord with all the authorities, i. e., that the intention of the parties governs. ''Cash Sales." — But the question still remains, what intent is indicated by the stipulation for cash on delivery. Does it mean "cash before delivery of title'* or only "cash before delivery of possession"? When the contract clearly calls for cash on delivery and no delayed time for pajTnent has apparently been contemplated, the preponderance of authority treats the agreement as making payment a condition precedent to delivery.'®* 38— Clark v. Greeley, 62 N. H. pie's State Bk. v. Brown, Kan., 23 394. L. R. A. (n. s.) 824; Lentz v. Flint 39— Can. Nor. R. R. v. No. Miss. & P. M. Ry., 53 Mich. 444; Hamra R. Co., 209 Fed. 758; Hirsch v. Bros. v. Herrell, Mo., 200 S. W. Lumber Co., 69 N. J. L. 509; 776; Eaton v. State, 16 Ala. 405, Hughes V. Knoth, 138 N. C. 105; 78 So. 321; Piano Co. v. Piano Ocean S. S. Co. v. So. States Naval Co., 85 O. S. 196, "If in such an Stores Co., Ga., 89 S. E. 383 ; Peo- agreement there is no mention ♦See Uniform Sales Act, Section 19, Rule 1. This is the only possible reference to the subject in the act. 34 THE LAW OF SALES But when it is agreed that payment may be delayed for a time after the date of the contract, then, even though the contract stipulates for "payment on deliv- ery", the tendency is to hold that title passed according to the usual rules of presumption and only the buyer's right to possession is held up till payment. The term ''cash sale" is usually confined in its strictly legal use to transactions in which the court beheves that the parties intended payment to be a condition precedent to the passing of title. But in common use, "cash sale" may also refer to an intent of the seller merely to hold possession till payment — to give no credit, although pass- ing title. Because of this double meaning, the term itself means nothing certain, and its use is apt to be misleading. If it be decided that the parties did in fact intend pay- ment to be a condition precedent to the passing of title, then even the delivery of possession to the buyer does not vest title in him until the expected payment is forth- coming. But the condition precedent of payment may be waived by the seller, and his leaving the buyer in possession for an undue length of time after failure of payment will be looked upon as such a waiver.*" of the terms of payment the pre- define "cash sale", but the courts sumption is that it is a cash sale have taken it to mean a stipula- and that delivery of the goods tion for cash on delivery. See (i. e., delivery of title) and the Charleston R. R. Co. v. Pope, 122 payment of the price are to be Ga. 577; Flanney v. Harley, 117 simultaneous". Ga. 483. Intent left to the jury as though 40 — Freeh v. Lewis, 218 Pa. 141, it were a question of fact, Richard- 11 L. R. A. (n. s.) 948. In this son V. Insurance Co., 136 N. C. case the question of waiver was 314; Boyd v. Bank of Mercer, 174 held to be one of law for the court Mo. Ap. 431; Skinner, etc., v. and not to be left to the jury. Lemmert Furniture Co., 182 Mo. Compare, Manchester Loco. Wks. Ap. 549. v. Tniesdale, 44 Minn. 115 (in A statute of Georgia (Code of equity) ; Fishback v. Van Dusen & 1895, sec. 3546) provides that in a Co., 33 Minn. 111. "cash sale" of certain goods title Whether there is a waiver or shall be deemed not to have not is a question for the jury, Os- passed till payment. It does not born v. Gantz, 60 N. Y. 540. TRANSFER OF TITLE 35 '*0. 0. D. " — At this place it must be noted that the pre- sumption, that "cash on delivery" means "cash before delivery of title", does not apply where the stipulation does not appear at the time of making the contract itself, but is stated only when the seller, in shipping the goods to the buyer, has directed the carrier to collect' on delivery. This is the usual "C. 0. D." shipment. In general the letters C. 0. D. are interpreted as meaning "collect on delivery", but sometimes as "cash on delivery ' '.*^ In such case the preponderance of authority treats the stipulation as a condition precedent to delivery of possession only and as not affecting the title. Two decisions in Missouri exemplify this important difference between a sale for "cash on delivery" and a shipment "C. 0. D." In State v. Rosenberger,*^ there was a sale of goods unidentified at the time of contract but subsequently appropriated by shipment to the buyer. This shipment was "C. 0. D." Nevertheless the court held that only possession was intended to be conditioned on payment and title passed at the time of shipment. In Johnson-Brinkman Co. v. Central Bank," the plaintiff sold and delivered certain specified property to the buyer. The conditions at the time of sale were "cash on delivery". As the check given in payment turned out worthless, the court held that there was no pay- ment, that the intention was not to pass title until payment, and therefore that title had not passed. By what is probably the weight of authority numer- ically, as well as logically, a C. 0. D. restriction on the carrier is held not to rebut the intention to pass title which is ordinarily presumed from the delivery to the carrier. These courts give the C. 0. D. instruction an effect consistent with the presumption of intent to pass title, by treating it as a seller's retention of possession, only, for the sake of his seller's lien. In State v. Mul- 41— Newhook v. Ryan, 9 Newf. 42 — 212 Mo. 648, approved in 220. State v. Brewing Co., 270 Mo. 100. 43—116 Mo. 556. 36 THE LAW OF SALES len,** a resident of a county in which sale of liquor was prohibited, ordered Mullen, a dealer living in a non-pro- hibition territory, to ship him liquor C. 0. D. The de- fendant did so ship it as ordered and was indicted for making a sale of liquor in the dry county. The court dismissed the charge, on the ground that title passed when the liquor was delivered to the carrier, although by the instruction to the carrier to collect on delivery the seller's right of possession was retained. In Keller V. Texas," the court went so far as to declare unconsti- tutional a statute of the state which attempted to fix the point of destination of C. 0. D. shipments of liquor as the place of sale, on the ground that title really passed, in such cases, at the delivery to the carrier and the statute was an unauthorized interference with the right of persons living in non-prohibition territory, to make sales in that territory.*^ This holding that shipment * * C. 0. D. " is intended only to leave possession dependent on payment is, as a prac- tical matter, wise, since it gives a very real meaning and effect to the C. 0. D. instructions while at the same time adhering to the fundamental proposition that delivery to a carrier shows a prima facie intent to pass title. Whether it is wholly consistent with the reasons on which the latter presumption is founded depends upon what those reasons are, and as the courts are anything but explicit concerning the latter we are now practically con- strained to accept the rule as one which is wholly reason- 44 — 78 O. S. 358, 125 Am. St. 710. that a shipment C. O. D. passes 45 — Tex., 1 L. R. A. (n. s.) 474. title, but retains possession in the 46 — A similar statute of Mich- seller, are, Jones v. U. S., 170 Fed. Igan, Sec. 5051, Howell's Statutes, 1, 24 L. R. A. (n. s.) 143; People v. was upheld in People v. Brewing Converse, 157 Mich. 29; Pilgreen Co., 166 Mich. 292, but the court v. State, 71 Ala. 368; State v. Ros- said that, independent of the stat- enberger, 212 Mo. 648; State v. ute, the sale, by the weight of Palmer, 170 Mo. App. 90; Keller v. authority, would have taken place State, Tex. , 87 S. W. 669; Tex. at the point of shipment. In ac- Seed, etc., Co. v. Schnoutze, 209 cord with the general proposition S. W. 495. TRANSFER OF TITLE 37 able, but whose precise and original reason for being has been lost.*''^ Furthermore, this rule that *'C. 0. D." affects possession only gives a very real protection to the seller. It throws on the buyer the risk of loss, makes him liable for the price and yet gives the seller complete protection if the buyer fails to pay. It is precisely what a wise seller ought to mean. A minority of courts hold, despite the usual rule re- specting delivery to a carrier, that an instruction to the carrier to deliver only on payment rebuts the presump- tion that the shipper intended to pass title. Thus in State v. O'Neil,*^ the facts were essentially identical with those of State v. Mullen, supra, and the decision quite op- posite. Liquor ordered by a resident of Vermont from a firm in New York was shipped to the buyer with C. 0. D. instructions. The issue was whether this constituted a sale in New York or in Vermont. The court said that passing of title was a question of intent, and determined the intent in this case not so much as a matter of pre- sumption as one of actuality which could be truly de- termined from the circumstances. ''It is difiScult", said the court, * ' to see how a seller could more positively and unequivocally express his intention not to relinquish his right of property or possession in goods until payment of the purchase price than by this method of shipment. We do not think the case is distinguishable in principle from that of a vendor who sends his clerk or agent to deliver the goods, or forwards them to, or makes them deliverable upon the order of, his agent, with instructions not to deliver them except on payment of the price, or performance of some other specified condition precedent 47— One court however seems to the point of shipment notwith- bave gone unduly far and to have standing the seller had agreed ignored the real and expressed in- that the buyer would not have to tent of the parties in favor of the take the whiskey ordered unless merely constructive presumption, he wanted to, and that it would In Golightly v. State, 49 Tex. Grim. not be his whiskey until paid for. Ap. 44, 2 L. R. A. (n. s.) 383, the 48—58 Vt 140 court held that title had passed at 38 THE LAW OF SALES by the vendee. The vendors made the express company their agent in the matter of the dehvery of the goods, with instructions not to part with the possession of them except upon prior or contemporaneous receipt of the price. The contract of sale therefore remained inchoat or executory while the goods were in transit, or in the hands of the express company, and could only become executed and complete by their delivery to the consignee. There was a completed executory contract of sale in New York ; but the completed sale was, or was to be, in this state. ' '*® The answer of other courts to this reasoning is, as has been said, that the illustrations given by the court are all indicative of an intent to retain possession, but not necessarily an intent to retain title. Since retention of possession is in harmony with the usual effect of unre- stricted delivery to a carrier, and retention of title is not in harmony, the weight of authority is also the more logical authority.* In at least one case the intention evinced by a shipment C. 0. D. has been treated not as a matter of construction for the court, but as a fact to be left to the jury.^° Rebuttal of Presumptions. — As has already been pointed out, these principles of decision are all rules of presumption only, or what may better be called rules of judicial custom, for construing a conventional intention as to title in cases where no real intention is evident. As the real intention, however, is the governing factor in the passing of title, they all give way before any evidence 49— Accord, E. M. Brash Cigar Note; 2 Id. 383. Co. V. Wilson, 32 Okla. 153; Lane It must be remembered that V. Chadwick, 146 Mass. 68; Hen- even this minority of decisions derson v. Lauer & Son, Cal., 181 does not apply to cases of sales of Pac. 811, a decision undoubtedly specific property where there was affected by other matters; Crabbe no provision for cash at the time V. State, 88 Ga. 584; State v. Goss, of making the contract. 59 Vt. 266. See cases collected, 50 — Com. v. Tynnauer, 33 Pa. both sides, 24 L. R. A. (n. s.) 143, Sup. Ct. 604. •See Uniform Sales Act, Section 19, Rule 4, (2). TRANSFER OF TITLE 39 of real intention. Such evidence may take any conceiv- able form; it may be of any degree of persuasiveness. The same piece of evidence that persuades the court not to follow the conventional rule in one case, may be treated by another court as quite insufficient. These other matters of possible evidence are not, however, sufficiently recurrent for any custom of decision based on them to have grown up. "When, therefore, a par- ticular case presents facts not precisely covered by the few rules of presumption just discussed, the question of title depends upon the influence of these facts, backed by the persuasiveness of counsel, upon the particular judge. If counsel can find some other case in which similar facts have been judicially held to show a certain intention, the later court may choose to follow the earlier decision — or it may choose to form its o^\ai independent conclusion of fact. Undoubtedly particular precedents have some influence, but there is no rule, no established judicial custom, other than those few already stated. Expressed Intent. — Whenever the parties have expressed any intention in respect to the passing of title, there is then no doubt of the matter and title will be held to have passed, or not to have passed, strictly in accord with such intention. Conditional Sales. — Of this class are those agree- ments commonly known as ' ' conditional sales ' '. These are agreements in which the parties have clearly provided that title shall not pass until the performance of some con- dition upon the part of the buyer. Usually this condition is payment of the purchase price, but it may be anything. As between the parties, at least, the courts consist- ently hold that the legal title does not pass until the con- dition has been performed. This is thoroughly settled. The seller, however, may waive the performance of the condition, and choose to pass title anyhow, or he may lose his retained ownership in other ways. These mat- 40 THE LAW OF SALES ters, and the rights of the parties generally will be dis- cussed under the subject of ''Seller's Remedies ".^^ The rights of third persons toward the goods will be discussed under that subject.^^ The point here pertinent, is simply that, as between the parties, the intention to retain title until performance of the condition will be given full effect. Conversely, since title can not pass except by mutual agreement, it follows that the buyer's intent must be considered as well as that of the seller. If the facts show clearly that the buyer has not intended to take title, it will not be treated as having passed.^^ Identification of Property Sold So far we have been considering the passing of title to property which is identified by the terms of the agree- ment at the time it is entered into. Many agreements to sell and buy, however, relate to property having no specific individuality at the time. Individuality, as here used, must not be confused with description. A contract to sell which does not describe the property it refers to is of no effect at all as a binding agreement. No court could determine what kind of property the parties had in mind so as to be able to fix damages in case of its breach. But a description of property, sufficiently clear and defi- nite to give a contract vaUdity, does not necessarily point out any particular property. Thus if A agrees to sell to B the watch which he holds in his hand, or the wheat which is in a certain bin, there is no vagueness as to the specific piece of property considered. Specification. — On the other hand, a promise by A to sell and B to buy ''an Ingersoll watch", or "a thousand bushels of A No. 1 hard, Minnesota grown winter wheat", might be definite enough to form a binding contract. 51 — Post, p. 99 ff. the seller's right to sue for the 52 Post p 206. purchase price in case the buyer refuses to take title as agreed. 53 — See also the discussion of p^^^ p^ tj2. TRANSFER OF TITLE 41 But the particular watch, or the particular mass of wheat, in respect to which they intend to transfer title would not be known. In a strict sense, of course, a description which tells some characteristics of a thing, but does not give enough of its characteristics to dehmit it from all other things is not a complete description. Perhaps &uch a thing is not, precisely speaking, ''described". But, in very common usage, to ''describe" a thing is not neces- sarily to "particularly identify" it. Hence we may properly speak here of "described", but not "particu- larized" or "identified" property. In the customary law parlance this particular identification is called "specification", and property described but not delimited from all other property is "unspecified". The concept of ' ' ownership ' ' requires not only a per- son in whom certain rights exist, but a definite and par- ticular object, tangible or intangible, to which those rights relate. There can not be an owner mthout a thing owned. A thing which is not so described as to have an individuality of its own, apart from all other things of certain like characteristics, has no existence in the eyes of the law. Until there is such a specification as will create individuality of existence there can be no own- ership. Consequently, no matter how clearly parties may intend to pass the ownership of something which they describe as "an Ingersoll watch," there is no "ownership" in existence to be passed until they have somehow indicated the particular watch to which they intend the rights of ownership to attach."* 54 — "That the subject thereof until the particular property which must be specific is essential to the is the subject of the contract be- validity of every contract of bar- comes ascertained. This is true gain and sale. It inheres in the independently of the intention of very nature of the transaction that the vendor or vendee." Ellis & a bargain and sale can not be Myers Lumber Co. v. Hubbard, made of chattels not yet identi- Va. 96 S. E. 754. fied; the ownership cannot change Dunn v. Georgia, 82 Ga. 27, 3 the property or title can not pass, L. R. A. 199. Sale of liquor was *See Uniform Sales Act. Section 17. 42 THE LAW OF SALES It follows, therefore, that, under the frequent contracts to buy and sell described, but not then specified, property, no title can possibly pass until the parties shall particu- larly point out the property in respect to which they are dealing. It logically follows also that the parties must agree in thus specifying the particular thing whose own- ership one intends to sell and the other to receive. The cases show a number of settled customs of the courts in deciding whether there has been a specification of property by the seller and an agreement in that speci- fication by the buyer. Specification as Passing Title. — When the parties have agreed in specifying the particular property which their contract of sale is to affect, there still remains the question of when they intended title to pass. Whatever their intention, it could not have passed until specifica- tion. By making the specification did they intend it then to pass? These are two distinct issues, subsequent one to the other, to be sure, but independent. Nevertheless prohibited in D county, but not in seller, the sale is incomplete. F county. The appellant, who had They must be ascertained, desig- a stock of liquor in F county, nated or separated from the stock agreed with a resident of D county, or quantity with which they are while both parties were in D mixed, before the property can county, to sell him a gallon of pass." Joseph v. Braudy, 112 Mich, whiskey. No particular gallon 579; Mitchell v. Abemathy, L. R. was specified. Appellant was pros- A. 1917 C. 6; First Natl. Bank ecuted for selling whiskey in D v. Cazort & McGehee Co., 123 Ark. county. The court held that the 605, 186 S. W. 86; Taylor v. Fall transaction could be nothing but River Iron Works, 124 Fed. 826; an "executory contract," and not Gardiner v. Suydam, 7 N. Y. 357; a "sale," until the subject matter Conrad v. Penna. R. R. Co., 214 Pa. of the agreement was identified 98; Cleveland v. Williams, 29 Tex. and that as the identification did 204, 94 Am. Dec. 274; Cassiuelli v. not take place in the prohibition Humphrey Supply Co., 43 Nev. 208, county the defendant was not 183 Pac. 523. "It is common sense guilty of a sale therein. Warren that a man can not presently con- V. Buckminster, 24 N. H. 336, vey title to property which is not "Where the goods sold are mixed in existence," Gile v. Lasalle, with others, and are not separated 89 Ore. 107, 171 Pac. 741. Xrom the general stock of the TRANSFER OF TITLE 43 the courts seldom made a distinction in utterance, and "specification" as meaning ''particular delimitation" is much confused with ''specification" as meaning "an intent to pass title" to the property then pointed out. As a broad proposition, it may be said that mutual speci- fication of the property to which a contract of sale is meant to apply is taken by the courts as showing a mutual intention to pass title to it at the time of the specification.* We shall here discuss the matter of mutual specifica- tion of the particular property which is to be affected by the contract as a proposition quite apart from the mutual intention to pass title. The former, necessarily, comes first. How Made. — The natural sequence of events is for the seller to determine upon, and to demonstrate in some way, the particular chattels to which he intends the con- tract to apply and for the buyer then to express his con- sent that the contract shall apply to the goods so pointed out. Hence it is usually said that the seller "specifies" the goods and the buyer "assents" thereto. As we have already said, the specification and assent are both neces- sary before the court can hold that title was intended to pass. This mutuality of intent as to the property to be affected by the contract, that is to say, this specifica- tion and assent, together, are usually called the "appro- priation" of the goods to the contract. In this sense of the word, to say that goods have been "appropriated" to the contract means that the seller and buyer have agreed in the matter of identification. The word appro- priation is, however, quite often used of the act of the seller only, and leaves the assent of the buj^er still to be ascertained.^^ It is necessary to know of this double 55 — Cyc. Sales; Andrews v. Du- Is used in botli senses; Wait v. rant, 11 N. Y. 35; In Atkinson v. Baker, 2 Exch. Hep. 1. Bell, 8 Barn. & Cress. 277, the term •See "Uniform Sales Act, Section 19, Rule 4, (1). 44 THE LAW OF SALES meaning to understand some statements by the courts. In this book ** appropriation" -will be used only of the specification and assent together. May be Implied. — It is not essential that the speci- fication be in express words. It may be deduced by the court as a clear implication from the circumstances. Any act of the seller, or of the buyer if he is the one to act first, which points out the particular goods to which he intends the contract to apply will be accepted by the courts as a sufficient specification on his part. No par- ticular formality is required. It is the intention of the party, that certain goods shall be the ones affected by the contract, which counts. Anything that clearly demon- strates such an intention is sufficient. Thus, marking particular goods, conforming to the description of the contract, with the buyer's name is enough to show the seller's intent that those goods shall be operated on by the contract.^® A tender to the buyer of certain goods will show it,*'' or putting goods in the buyer's bottles or sacks.*^ More often than in any other way, the specification is shown by the seller's delivering certain goods conforming to the contract to a common carrier for transportation to the buyer.*®* Assent to Specification. — But, as has already been said, the seller can not thrust upon the buyer title to whichever goods he, the seller, may choose*. No title will be held to have passed until the buyer has assented to 56 — Andrews v. Cheney, 62 N. It would hardly eeem to have H. 404; Mitchell v. LeClair, 165 required a judicial decision to the Mass. 308. effect that removal from a mass 57-Rider v. Kelley, 32 Vt. 268. °^ ^" S°°*^^ ^°^ ^°^^ specifies the ones which were sold as clearly 58-Langton v. Higgins. 4 Hurl, ^g ^^^j^ removal from the mass & Norm. 402. ^f ^.j^og^ which were sold. This 59 — See authorities in subse- was the decision in Valentine v. quent paragraphs. Brown, 18 Pic. (Mass.) 549. •See Uniform Sales Act, Section 19, Rule 4. (2). TRANSFER OF TITLE 45 the specification. The necessity of this assent is shown by the case of Andrews v. Cheney.^*' The parties had contracted for the sale of a certain quantity of goods described as being Uke a sample. Subsequently the seller set apart by themselves certain goods conforming to the description and signified an intent to pass title to them by marking them "svith the buyer's name. The buyer did not call for them at the time agreed upon and they were subsequently destroyed by fire. The buyer who had paid for them in advance, sued to recover the amount of his payment. The court denied a recovery, on the ground that the seller might still perform his contract by delivering to the buyer other goods conforming to the contract. As to those of which the seller had there- tofore shown his intention of passing the ownership according to the contract, the court held title had not passed. ''The property in the goods", said the court, "did not pass to the plaintiff by virtue of the contract, for they were not then ascertained, and may not have been in existence. The agreement on the part of the defendant was executory. * * * A contract of sale is not complete until the specific goods upon which it is to operate are agreed upon. Until that is done the contract is not a sale but an agreement to sell goods of a particu- lar description. It is performed on the part of the seller by furnishing goods which answer the description. If, as in the case of a sale of goods by sample, the specific goods are not ascertained by the agreement, the property does not pass until an appropriation of specific goods to the contract is made with the assent of both par- ties. If the plaintiff authorized the defendant to make the selection, the property immediately on the selection vested in the plaintiff. It not appearing that the plaintiff gave such authority, the goods at the time of the fire were the property of the defendant and their destruction was his loss." 60—62 N. H. 404. 46 THE LAW OF SALES In another case®^ the defendant had agreed to buy from the plaintiff a certain quantity of hops of a described quality to be grown the following year. In due time the hops were raised and tendered to the defendant in con- formity with the agreement. He, however, refused to accept them. The plaintiff stored them on the defendant's account and sued to recover the contract price. The court held that he might recover the amount of his dam- age through the defendant's breach of contract in refus- ing to accept, but that he could not recover the full amount of the purchase price. On this latter point the court said: "The (lower) court decided that the rule of damages was the contract price which the defendants were to pay for the hops. This rule of damages must stand upon the principle that the vendor in this case, by offering to deliver and tendering to the defendants the hops contracted to be delivered, thereby passed the title to the vendees, so that the hops so tendered became the property of the vendees, and the vendor's title to them ceased, although the vendees refused to accept and did not accept of them. It is to be observed that this is not the case of the sale of the specific article and the tender of it to the vendee. * * * But it is a contract to deliver at a future day property not then in esse; property which is to be thereafter produced by the cultivation of the earth, and which is to be of a specified character and description. It comes by analogy within the class of contracts for the manufacture of goods, and for their delivery at a future day. In such cases, the authorities have abundantly established the general rule that the article must not only be made and offered to the vendee, but that he must accept of it, or it must be set apart for him by his consent, before the title to it will vest in him. ' ' An even more severe application of the rule is illus- trated by the case of Greenleaf v. Hamilton.®^ The 61— Rider v. Kelley, 32 Vt. 268, 62—94 Me. 118. 76 Am. Dec. 176. TRANSFER OF TITLE' 47 defendant had ordered from the publishers one copy of a book called "Men of Progress", for which he agreed to pay $35. A copy was brought to his office by the pub- lisher's agent and, the defendant being absent, was left there for him. He refused to pay and the assignee of the publisher brought suit for the agreed price. It was held that the plaintiff could not recover the full contract price unless there was an ** acceptance " of the book by the defendant, which issue was ordered submitted to a jury.«8 Implied Assent. — But the buyer's assent, like the seller's specification, need not be express; it may be implied from acts, or from the circumstances of the case. If he has already seen a larger quantity of goods from which' those sold are to be taken, it has been held that he has assented to any selection which the seller may make from that mass, or, in different words, to have made the seller his agent to assent to his, the seller's, own selection.®* By sending containers for the seller to fill 63 — Buyer's acceptance of sell- Schneider v. O. P. R. R. Co., 20 er's specification is necessary to Ore. 172; Colorado Springs L. S. the passing of title; Moody v. Co. v. Godding, 20 Colo. 249. Brown, 34 Me. 107; Crowl v. Good- Some confusion has been caused enburger, 112 Mich. 683; Green- by the holding of a number of leaf V. Gallagher, 93 Me. 549; courts that upon tender of goods River Spinning Co. v. Atlantic conforming to the contract the en- Mills, 155 Fed. 466; Tufts v. tire contract price can be recov- Grewer, 83 Me. 407, even though ered whether title has passed or article was especially manufac- not. This subject is discussed tured according to buyer's plans; P&st, p. 92 ff. Am. Hide Co. v. Chalkley, 101 Vt. 64— Aldridge v. Johnson, 7 El. 458; Johnson v. Hibbard, 29 Ore. & Bl. 885, "He (the buyer) had 184, 54 Am. St. 787; Lovell v. New- inspected and approved the barley man & Son, 142 Fed. 753; Hoover in bulk. He sent his sacks to be v. Maher, 51 Minn. 269; Jones v. filled out of that bulk. There can Jennins, 168 Pa. 493. be no doubt of his assent to the Contra: Title passes on appro- appropriation of such bulk as priation and tender by the seller should have been put into the without buyer's consent to accept sacks." Sawyer v. Dean, 114 N. Y, it, Hyden v. Demets, 53 N. Y. 426; 489. Brigham v. Hibbard, 28 Ore. 386; 48 THE LAW OF SALES he has been held to have made the seller his agent to assent to the seller's specification. Thus in Langton v. Higgins,®^ the buyer of peppermint oil which was still to be manufactured by the seller had sent his own bot- tles to be filled with the oil as it should be made. The court held that title passed when sufficient oil according to the contract had been put into the bottles, saying, ' ' The buyer in effect says, *I will trust you to deliver into my bottles, and by that means to appropriate to me, the article which I have bought of you. ' On the other hand, the seller must be taken to say, 'You have sent your bot- tles and I will put the article into them for you. ' ' '®® Receipt by Carrier. — The receipt of goods by a car- rier for transportation to the buyer is generally held to constitute an assent by the buyer to the seller's specifica- tion. The carrier, although it may have contracted for carriage only with the seller, although it may be held not the buyer's agent for purposes of possession, and although it is to be paid by the seller, is nevertheless con- sistently treated as the buyer's agent to assent to the seller's specification, if that specification does in fact con- form to the terms of the contract. It is obvious that there is no real relation of agency between the buyer and the carrier. Although the seller can usually sue for goods sold and delivered, the carrier is not wholly the buyer's agent for purposes of possession, because the seller's right to stop in transitu still exists. The carrier is often under contract only with the seller and is to be paid by the seller. The rule is a purely arbitrary one, established for the sake of convenience. In fact there is hardly authority for speaking of agency even as a fiction. 65—4 Hurl. & Norm. 402. Greenleaf v. Hamilton, 94 Me. 118, 66 — The question whether or not but is in general decided by the the buyer has consented to take court, like all other questions of the particular thing which the intent in this subject, as a matter seller has picked out is occasion- of accepted judicial custom, ally left to the jury to decide. TRANSFER OF TITLE 49 Rather, the courts have simply decided that appropria- tion is complete on delivery to a carrier and its accept- ance of the goods for carriage, without bothering to state just how the buyer's necessary assent to the speci- fication is worked out.^'' Passing of Title. — As has already been said, the point- ing out of goods as the particular ones to which the con- tract is to apply, and assent thereto by the other party, has no necessary connection with an intent to pass title. It may happen, and does sometimes happen in fact, that the seller points out the particular goods to which he intends eventually to pass title, mthout intending to pass it at the time. It is possible also that the buyer may consent to the seller's specification of the particular goods that are to pass, without intending to take the title at once.^' But it is presumed as a matter of judicial custom unless the contrary appear that by their specification and assent the parties do intend at the same time to pass title. Hence it is said that title is presumed to pass at the instant of complete appropriation. So invariable is this presumption, that courts do not make any verbal dis- tinction between specification and intent to pass title, or between assent and intent to accept title, and frequently use one in the sense of the other. Delivery to Carrier.— The delivery of goods to a carrier for transportation to the buyer, therefore, not only constitutes an act of specification, but is presumed also to show an intent to pass the title to the goods so specified. Conversely, the receipt by the carrier demon- 67— See the authorities and dis- agreed that a certain article shall cussion in the following para- be delivered in pursuance of the graphs. contract, and yet the property may 68 — Wait V. Baker, 2 Exch. Rep. not pass in either case." Schreyer 1, "The word (appropriation) may v. Kimball Lumber Co., 54 Fed. mean that both parties have 653. 50 THE LAW OF SALES strates both the buyer's assent to the specification and his intent to receive the title. The theory on which tliis holding is based is anything but clear. The courts usually dismiss the proposition with the simple statement that the carrier is the buyer's agent to accept the goods, or that delivery to the carrier is delivery to the buyer. If by "delivery" and "accept- ance" in this connection the courts mean physical deliv- ery, or acceptance of possession of the tangible chattel, there is an obvious inconsistency with the proposition that by a C. 0. D. shipment title passes to the buyer but the possession is retained by the seller.®^ Neither does the idea of possession in the buyer, through the carrier as his agent for that purpose, conform to the holdings that delivery to a carrier is not delivery to the buyer so as to satisfy the requirements of the Statute of Frauds.'" If on the other hand they mean delivery of the title — the concept of OAvnership as distinct from the tangible thing to which it applies — and its acceptance by the car- rier as the buyer's agent, the inconsistency disappears. It is perfectly conceivable that the carrier may be both the buyer's agent to receive title and the seller's agent to hold physical possession. This theory is not contra- dicted by anything in the cases nor inconsistent with their verbiage, and it comes nearer to harmonizing the various holdings than any other, but it must be pointed out that if it be the underlying principle it is not expressly stated by the courts. The courts, as a matter of fact, appear to accept the rule that receipt of the goods by a carrier constitutes an acceptance of title by the buyer, without feeling called upon to discuss the rea- son. The case of Johnson v. Hibbard''^^ is characteristic. The court says, "In the sale of articles or goods to be 69 — See discussion of C. O. D. See discussion under that subject, shipments, (mte, p. 35. post, p. 269. 70— Gatiss v. Cyr, 134 Mich. 233. 71—29 Ore. 184. 54 Am. St. 787. TRANSFER OF TITLE 51 manufactured, it is clear that no title passes until their manufacture is completed, and they, by the understand- ing and consent, express or implied, of the parties to the sale, have been selected or designated, and set apart to the purchaser." This statement that mutual consent is necessary to the passing of title is followed by the simple statement, without discussion, that title passed when goods conforming to the contract were delivered to the carrier. Just how delivery to the carrier shows the buyer's necessary consent the court does not say.''^^* In Harper v. State, ^'^ the facts were that a minor living outside the state had written Harper, a resident of Arkansas, to send him a gallon of whiskey. Harper shipped it consigned to the buyer, who duly received it. An Arkansas statute made it unlawful to sell liquor to a minor and Harper was indicted thereunder. He de- fended on the ground that there was no such statute in the buyer's state and that title had not passed until delivery by the carrier to the buyer, which had occurred outside of Arkansas. The court held the indictment to be good because the sale had been executed, that is, title 72 — Title passes on delivery to Kleine v. Baker, 99 Mass. 253; carrier. Dunn v. Georgia, 82 Ga. 27, Harper v. State, 91 Ark. 422, 25 3 I.. R. A. 199; Hill v. Fruita Mer- L. R. A. (n. s.) 669; State v. J. W. cantile Co., 42 Colo. 491, 126 Am. Kelley & Co., 123 Tenn. 556, 36 St. 172; A. J. Neimeyer Co. v. L. R. A. (n. s.) 171; Loveland v. Burlington R. R., 54 Neb. 321, 40 Dinunan, 81 Conn. Ill, 17 L. R. A. L. R. A. 534; Sullivan v. Sullivan, (n. s.) 1119; Dentzel v. Island 70 Mich. 583; Branch Saw Co. v. Park Assn., 229 Pa. 403, 33 L. R. Bryant, 174 N. C. 355, 93 S. E. 839; A. (n. s.) 54; Tyler Co. v. Ludlow Third Natl. Bk. v. Smith, 107 Mo. Co., 236 U. S. 723; State v. Gruber, 178; Dr. A. P. Sawyer Medicine 116 Minn. 221, 45 L. R. A. (n. s.) Co. V. Johnson, 178 Mass. 374; 591; Twitchell-Champlin Co. v. Presley Fruit Co. v. St. Louis, etc. Radovsky, 207 Mass. 72; White v. R.R., 130 Minn. 121, 153 N.V^. 115; Schweitzer, 132 N. Y. S. 644, 147 The Pennsylvania Co. v. Holder- App. Div. 544, citing Dutton v. man, 69 Ind. 18; Congdon v. Ken- Solomonson, 3 Bos. & Pul. 582. dall, 53 Neb. 282; Hawens v. Grand 72a— 91 Ark. 422, 25 L. R. A. (n. Island L. & F. Co., 41 Neb. 153; s.) 669. *See Uniform Sales Act, Section 19, Rule 4, (2). 52 THE LAW OF SALES had passed, when the liquor was shipped, consigned to the buyer.''^^^ A repudiation of the contract by the buyer is held to be a revocation of the carrier's authority to receive the goods for him. Consequently a subsequent specification of goods by the seller and delivery of them to a carrier for transportation to the buyer does not vest title in the buyer. As one court puts it'^ *'the direction not to ship was a revocation of the carrier's agency to receive, and the plaintiffs (sellers) thereby had notice of the revoca- tion. The delivery of the goods to the carrier, therefore, was unauthorized, and the carrier's receipt would not charge the defendant".'* 72b — Hill V. Fruita Mercantile Co., 42 Colo. 491, 126 Am. St. Rep. 172; A. J. Neimeyer Co. v. Burling- ton R. R., 54 Neb. 321, 40 L. R. A. 534 ; Sullivan v. Sullivan, 70 Mich. 583; Branch Saw Co. v. Bryant, N. C, 93 S. E. 839; Third Natl. Bk. V. Smith, 107 Mo. 178; Kleine V. Baker, 99 Mass. 253; State v. J. W. Kelley & Co., 123 Tenn. 556, 36 L. R. A. (n. s.) 171; Loveland V. Dinnan, 81 Conn. Ill, 17 L. R. A. (n. s.) 1119; Dentzel v. Island Park Assn., 229 Pa. 403, 33 L. R. A. (n. s.) 54, in the absence of any countervailing evidence trial court should give binding instructions to this effect to jury. Tyler Co. v. Ludlow Co., 236 U. S. 723, infringe- ment of patent by sale of articles occurs in the district in which the articles are shipped to buyer and in no other; State v. Gruber, 116 Minn. 221, 45 L. R. A. (n. s.) 591. The presumption has been changed by statute in South Caro- lina so far as shipments of intoxi- cating liquor are concerned and an arbitrary rule as to the place of sales substituted for it. Sec. 2080, Revisal of 1905. This statute sim- ply provides that the place of delivery of intoxicating liquor within the state "shall be con- strued and held to be the place of sale thereof". A similar statute was enacted in Texas — Acts of 1901, p. 262 — providing that when intoxicating liquor was shipped with a collection on delivery pro- vision the sale should be deemed to have occurred at the place of destination. This act was held unconstitutional on the ground that by the common law presump- tion the sale took place at point of shipment and the legislature could not, even indirectly, prevent the owner from bringing into a dry county liquor of which he had acquired title in another county. Keller v. State, Tex. Crim. Ap., 1 L. R. A. (n. s.) 489. 73 — Unexcelled Fire-works Co. v. Pontes, 130 Pa. 536. 74 — Lincoln v. Chas. Alshuler Mfg. Co., 142 Wis. 475; Lipper Mfg. Co. V. Morris & Co., 58 Pa. Superior Court 611, but holding that buyer's acceptance of them from the carrier and unexplained TRANSFER OF TITLE 53 The authority of the carrier or other agent to assent for the buyer to the passing of title, or to accept delivery of the goods so as to pass the title (whichever theory be chosen) is limited to cases where goods conforming to the contract are offered. This ''agency" of the carrier to receive the goods or the title is of course a mere fic- tion. As a matter of fact a carrier would receive any goods that the seller might deliver to it for transporta- tion to the buyer. There is no pretense that the carrier examines them to see whether they conform or not to the terms of some contract of sale. The agency of the carrier is merely a legal construction apparently based on expediency and operating to avoid conflict with the rule that title can not be forced upon the buyer without his consent to accept title in the particular chattel to which the seller has chosen to pass title. This constructive agency, however, extends only to the acceptance of goods which conform to the contract. Delivery by the seller to a carrier and its receipt of goods which do not conform to the terms of the contract do not suffice to pass the title. Before title will pass in such case there must be some further evidence of acceptance by the buyer of the particular goods pre- sented.'^^* The delivery to a carrier of goods which the seller asserts conformed to the description in the contract is prima facie evidence of specification and assent and con- sequent passing of title. The burden is then upon the retention amounted in itself to livery to carrier of a greater quan- acceptance of title; Acme Food tity than called for by the con- Co. V. Older, 64 W. Va. 255, 17 tract; but same case, 6 Hill 208, to L. R. A. (n. s.) 807. effect that an actually intended 75 — Johnson v. Hibbard, 29 Ore. gift of the excess would pass title 184^ 54 Am. St. 787; Nomordust to the whole; compare, The Iron Co. V. Eberts & Co., 59 Pa. Sup. Cliffs Co. v. Buhl, 42 Mich. 86. Ct. 295; Fogel v. Brubaker, 122 Pa. Hoover v. Maher, 51 Minn. 269, 7; Skinner v. Griffiths, 80 Wash. delivery to carrier before the time 291, 141 Pac. 693 ; Downer v. stipulated by the buyer for ship- Thompson, 2 Hill (N. Y.) 137, de- ment does not pass the title. *See Uniform Sales Act, Section 44, (1), (2), (3), (4). 54 THE LAW OF SALES buyer to prove that the goods so specified by the seller did not in fact conform to the terms of the agreement. If the goods had been destroyed while in the carrier's hands this proof would of course be difficult to make and it is probable that the seller's prima facie proof would remain unrebutted.'® Other Circumstances. — Various other circum- stances have, by particular courts, been held presump- tively to show an intent to pass title. The circumstances are not sufficiently recurrent to give rise to a rule of presumption and the cases are therefore of value only as showing the general trend of judicial idea as to what indicates intent to pass title. This intent has been pre- sumed from the manufacture of goods and their delivery to a particular storage house agreed upon by the parties,'^' from the seller's putting property conforming to the contract into the buyer's sacks ''^ or into bottles belonging to the buyer.'^ The delivery of goods conforming to the contract to persons, other than a common carrier, to whom dehvery has been authorized by the buyer has been held to pass the title, although the buyer had not in any other way signified his acceptance of those particular goods.^° These conclusions are only inferences of intent based upon the facts, and this judicial assumption of probable intent may be overthrown by any evidence of a real intent in conflict therewith. That is to say, no facts are conclusive, as a matter of law, in showing the intent of the parties. Even the rule that delivery to a carrier shows a probable and presumptive intent to pass title is 76 — Nomordust Co. v. Eberts 78 — Aldridge v. Johnson, 7 El. Co.. 59 Pa. Sup. Ct. 295; Skinner & Bl. 885. V. Griffiths, 80 Wash. 291, 141 Pac. 79— Langton v. Higgins, 4 Hurl. 693; Levy v. Radkay, 233 Mass. & Nor. 402. 29, 123 N. E. 97. 80 — Stewart v. Henningsen 77 — Stewart v. Henningsen Pro- Produce Co., 88 Kan. 521, 50 L. R. duce Co., 88 Kan. 521, 50 L. R. A. A. (n. s.) Ill; Skinner v. Griffiths, (n. 8.) 111. 80 Wash. 291, 141 Pac. 693. TRANSFER OF TITLE 55 rebuttable by any evidence that sufiSciently clearly shows an intent not to pass title. The counter evidence may, of course, take as many forms as the circumstances of the case are capable of assuming. Taking Out Bill of Lading. — Anything showiilg for which party the carrier is expected to act as bailee would logically be .indicative of intent as to title. That is to say, a seller desiring to retain ownership would not nat- urally make the carrier bailee for the buyer. But if he intended to pass title he would naturally make the carrier the buyer's bailee rather than his own. Whether this be the reason on which courts have decided or not, the fact is that when, on shipment, a bill of lading is taken from the carrier by the seller, the fact that he takes it in his own name, so that the carrier becomes his o^vn bailee, is treated by the courts as strong evidence that he intended to retain title despite the shipment.* If the seller takes the bill in his own name as bailor, that fact in itself is held enough to rebut the presumption that in shipping the goods he intended to pass title.*^ Taking a bill of lading in the name of an agent of the seller, or consigning to an agent instead of to the buyer also logically indicates an intent not to pass title to the 81 — W. T. Wilson Co. v. Central be paid by the buyer; Wigton v. Natl. Bk., Tex. Civ. Ap. , 139 Bowley, 130 Mass. 252; Emery's S. W. 996; Dows v. National Exch. Sons v. Irving Bk., 25 O. S. 360; Bk., 91 U. S. 618; Rylance v. Douglas v. People's Bk., 86 Ky. 176; Walker Co., 129 Md. 475; Jenkyns Security State Bk. v. O'Connell V. Brown, 14 Q. B. Rep. 496; Den- Lumber Co., 64 Wash. 506, 117 field Onion Co. v. N. Y., N. H. & Pac. 271; Ward v. Taylor, 56 111. H. R. R., 222 Mass. 535; Alderman 494; Gilbert v. Ayoob, 71 Pa. Sup. V. Eastern R. R., 115 Mass. 233; Ct. 336; a bill of lading in the Armstrong v. Coyne, 64 Kan. 75, shipper's own name "is inconsis- 67 Pac. 537; Willman Merc. Co. tent with an intent to pass the V. Fussy, 15 Mont. 511, 39 Pac. 738; ownership of the cargo", Render- Sheperd v. Harrison, L. R. 5 H. L. son v. Lauer & Son, 40 Cal. Ap. 116; Wait v. Baker, 2 Exch. Rep. 696, 181 Pac. 811. 1, even though freight was to ♦See Uniform Sales Act, Section 20, (1), (2), (3). 56 THE LAW OF SALES buyer and has been so held. In Berger v. State,^^ Berger while in a county where sale of liquor was prohibited took an order for liquor from C. He transmitted this to L, a dealer in a wet county, who packed liquor conform- ing to the order and put C's name on the bottle, but shipped it by carrier to Berger. The latter delivered it to C and was thereafter prosecuted for selling liquor within the dry territory. The court said that if the shipment had been direct to C title would have passed on delivery to the carrier outside the dry territory, but that by consigning it to his agent the seller evinced an intent to retain title and that, therefore, the sale took place when Berger delivered the liquor to C.®^ Taking out a bill in the name of the buyer would not, of course, have this effect, but tends rather to strengthen the presumption that by delivery to the carrier the seller intended to pass the title.®* The courts have gone so far in giving consideration to the indication of intent shown by the bill of lading as to hold that even shipment on the buyer's own vessel with a statement that, as to payment of freight, the goods were buyer's property did not show an intent to pass title to the buyer when the bill of lading had been taken out in the seller's name.*^ 82—50 Ark. 20. fer the title to the defendant", Edelstone v. Schimmel, 233 Mass. 83 — Accd., Zimmern's Coal Co. V. L. & N. R. R., 6 Ala. Ap. 475, 60 So. 598. 45, 123 N. E. 333. 85 — Turner v. Trustees, 6 Exch. Rep. 543; EUershaw v. Magniac, 84 — Georgia Marble Works v. 6 Exch. Rep. 569; In Gabarron v. Minor, Ark., 193 S. W. 498; Bailey Kreeft, L. R. 10 Exch. 274, the V. H. R. R. R. Co., 49 N. Y. 70; seller was under contract to de- Buckeye Cotton Oil Co. V. Mathe- liver to the buyer the particular son, 89 S. E. 478; Bk. of Litchfield goods shipped, and the vessel had V. Elliott, 83 Minn. 469, 86 N. W. been chartered for the purpose of 454; "Delivery of the goods to the carrying them to the buyer. Never- carrier together with the taking theless it was held that title did of a non-negotiable bill of lading not pass to the buyer on shipment in the name of the defendant because the bill of lading was (buyer) was strong proof of in- taken in the name of a fictitious tentlon by the plaintiffs to trans- agent of the seller. TRANSFER OF TITLE 57 While the majority of cases indicate clearly that the seller in taking the bill of lading in his own name is pre- sumed to have retained title, there are occasional deci- sions holding apparently that he retains a lien, a right of possession, only.* Thus in Mirabita v. Imperial Otto- man Bank^^ the buyer was allowed to bring an action in damages, based on title rather than contract, despite the fact that the bill of lading was in the seller's name and he had thereby retained a ''jus disponendi". The court, however, avoided discussion of whether the seller's right was really title or not. In effect, therefore, it is con- fusing.*'' A seller's consignment to himself, without bill of lading, makes the carrier bailee of the seller and has been held not to indicate any intent to pass title.** And a consign- ment to one who has never agreed to buy can not, of course, whatever be the shipper's intent, pass the title to him, for the reason that he has never consented to receive title and the carrier is not even by a fiction his agent to receive it.*^ In Falk v. Fletcher,^" goods had been delivered to a carrier for transportation with expectation of taking a bill of lading of some sort. Before a bill could be taken out the master of the vessel sailed away with the goods. The court left it to the jury to determine what the ship- per's intention as to title was. Rebuttal of Evidence of Bill of Lading. — The re- buttal of presumptive intent to pass title by delivery to a 86—3 Exch. Div. 164. 88— Newcomb v. Boston & 87-Cf., Sawyer v. Dean, 114 N. ^°^^" ^- ^^ ^^^ ^^^'^- ^^^' ^"^- Y. 469; but in Ullman v. Wormer ™^^ ^- ^''- ^^^^ ^- ^- ^°- ^^^ Mach. Co., 210 N. Y. 41, where ^^- ^- ^'^^' ^"^ '^ ^°^^ °°^ ^PP®^^ previously unspecific goods were definitely that there was even a shipped to the seller's own order, contract to sell in this case, the court said, "The title to the 89-Allen v. Williams, 12 Pick. machine never vested in the de- ^^^^^"^ ^^^- °^"^ ^- ^^^*^' ^^ fendant (buyer)." Tex. Crim. 107, 122 Am. St. 734. 90—34 L. J. R. C. P. 146. *See Uniform Sales Act, Section 20, (1), (2), (3). 58 THE LAW OF SALES carrier, which follows from taking the bill of lading in the seller 's own name, is itself rebuttable if other facts war- rant a different conclusion. It must be borne in mind that the real intent of the parties governs the passing of title. It passes when they so intend and not until they intend. The various presumptions which the courts have estab- lished are not rules of title, but presumptions pure and simple, which will prevail in the absence of any other evidence of intent, but which will give way at once to any evidence whatever which is sufficient to convince the particular court or jury that the real intent of the par- ties was not in accord with the presumption. A good illustration is found in the case of Lovell v. Newman & Son.®^ K. & Co. having contracted to sell cotton to a certain spinning company, forged bills of lading made out in their own name for a pretended ship- ment of cotton conforming to the contract. These bills of lading they sent to the spinning company and col- lected the agreed price of the cotton. Later they did actually ship cotton, the genuine bills for which were also in the shippers ' name and were identical vn.th. the forged ones. K. & Co. were adjudged bankrupt and these bills of lading were found among its papers by the trustee in bankruptcy. He brought suit against the bondsman of the carrier, claiming the title to be in him as trustee. The court held that taking the bills of lading in the sell- er's own name gave rise to a presumption that they intended to retain title, but that this presumption was rebutted by the circumstance that the real bills were taken out in form identical with the forged ones by delivering which K. & Co. had pretended to pass title to the buyers. In Valley v. Montgomery,®'' the bill of lading had been taken out in the seller's name. Lord Ellenborough said he would have been inclined to hold that title had not 91—188 Fed. 534, 113 C. C. A. 92—3 East 585. 39; afiirmed VJ2 Fed. 753. TRANSFER OF TITLE 59 passed to the buyer except for the fact that an invoice for the goods had been sent to the buyer stating that the goods were shipped at his risk and tliat the throwing of the risk on the buyer indicated an intent to pass the title to him. By way of illustrating the effect of evidence on different courts and demonstrating that the decision is one of individual conclusion, not a rule, in Martineau V. Kitching,^^ where the question of intent as to passing of title was in issue, there was an express stipulation that the risk of loss should remain in the seller. The court held this to indicate an intent that title should be in the buyer because if the seller had been intended to retain title the risk would have been in him without stipulation. In Dows v. Natl. Ex. Bk.^* the sending of an invoice to the buyer, mthout any provision in it as to risk, was held not to rebut the ''almost conclusive presumption" of intent to retain title raised by taking the bill of lading in the shipper's o^\^i name.^^ Subsequent dealing mth the bill of lading itself as passing the title is discussed hereafter. Other Circumstances. — Just as the presumption, that intent to pass title is evidenced by delivery of goods to a carrier, may be rebutted by the taking of a bill of lading in the shipper's own name, so it may be rebutted by other circumstances. It would be of no purpose to point out many of the various circumstances Avhich have been held in one case or another to rebut such presumption of intent, but for particular precedents which may possibly 93 — L. R. 7 Q. B. 436. actions on the part of the seller 94-91 U. S. 618, 630. "° indicating. In Golightly v. Texas, 49 Tex. Cr. Ap. 44, 2 L. 95 — In Ogle v. Atkinson, 5 Tau- R. A. (n. s.) 383, an oral stipula- ton 759, it was held that title tion that buyer should assume no passed on delivery to the carrier, risk of loss in transit was held not despite the fact that the bill of to rebut presumption that title lading was taken in the seller's passed on shipment, name, because of statements and 60 THE LAW OF SALES have persuasive effect upon a court reference must be made to the digests.^^ Conflicting Intents. — The rule of evidence that a presumption of intent existing at the time of certain acts can not be rebutted by a showing of subsequent acts or declarations, or other subsequent evidence, prevails of course in this relation. The delivery of goods to a carrier and the taking out of a bill of lading, or giving other directions as to shipment, are all a part of the one trans- action of shipment. It is not the deposit of goods in the carrier's freight house that demonstrates the parties' intent as to title, but the "shipment" which shows it. But when the presumptive intent has been shoA\Ti by this shipment, it can not thereafter be rebutted by the subsequent acts of the parties, although, of course, they may if they choose actually alter their prior intent.®^ It follows also that if title has already presumptively passed to a specific chattel, the way in which the seller deals with it on shipment will not serve to revest title in him nor to rebut the already existing presumption. Partial Delivery. — In cases where the contract is for the sale of a quantity of unspecified goods and a part of them have been specified and accepted by the buyer the question sometimes arises whether title has passed to so much as has been specified. If the contract is decided to be a "severable" one, so that title to the various parts and amounts of the goods contracted for may be treated separately from that of the whole, the issue would prop- erly be determined just as it would be in any contract 96 — Moakes v. Nicholson, 34 L. A contrary dictum is found in J. R. C. P. 273 ; not rebutted by Presley Fruit Co. v. St. Louis, etc. bill "on account of whom it may R. R., 130 Minn. 121, 153 N. W. 115, concern" but invoice to buyer, to the effect that seller's retention The Carlos F. Roses, 177 U. S. of a bill of lading in the buyer's 655, 662. name might show an intent to re- 97— Alderman Bros. Co. v. West- tain title, inghouse, etc., Co., 92 Conn. 419. TRANSFER OF TITLE 61 for the sale of the particular goods actually delivered, without considering- the fact that they were part of a larger amount. But if the contract be looked upon as an entirety, a different state of facts is present. It is highly probable that the buyer and seller did not contemplate the passing of tirtle to part only, but rather that no real ownership to any part should pass until the ownership of the whole should be transferred. The authority on this point is extremely limited. In Thompson v. Con- over,^^ it was explicitly held that title would pass. Con- over had sold to Petty certain corn, to be shelled by the seller and dehvered. A part of it was so delivered and accepted, and the rest, upon subsequent delivery, was refused by the buyer. That which had been delivered was levied upon by the sheriff as the property of the buyer. Conover then rescinded the contract and brought his action in trover. The court held the contract to be entire and the seller to have a right to rescind for the buyer's non-performance. But it held also that the action of trover could not be maintained because the title had passed from Conover to the buyer.®^ On the other hand, it has been intimated, without the necessity of so holding, that title to part delivered under a contract for an entire quantity would not pass until the whole amount had been appropriated."" Other cases, without discussing whether title to the part did pass or not, have held thai it is in the seller after rescission at any rate.^°^ Of course the facts of the case may be such as to show that the parties intended the risk of loss of so much as had been appropriated to be upon the buyer, regardless of whether or not title had passed to him."'^ 98 — 32 N. J. L. 466. 100— Stewart v. Henningsen 99-HolIand v. Cincinnati Co.. P^°*^"^^ ^°- ^^ ^^^ ^^L 129 Pac. 97 Ky. 454. title held to have ^^^^ ^^^^^ ^- ^^^^' ^^^ ^^^- ^24- passed and not to revert upon rescission, but it was not defin- itely held that the contract was entire. 116 Pac. 963. 101— Pope V. Porter, 102 N. Y. 366. 102 — Anderson v. Morice, L. R. 10 C. P. 609. 62 THE LAW OF SALES Dealing with a Bill of Lading. — Although the fact that by taking a bill of lading in the seller's, name the carrier is made bailee for the seller raises a presumption that title was not intended to pass, this bill of lading itself may later be so dealt with as to show an intent to pass title to the goods represented by it to the buyer. Dealing "^ mth the bill of lading has the same effect that dealing with the goods themselves would have. Therefore when -- the seller indicates an intent to pass the ownership of the bill of lading to the buyer he manifests also an intent to pass title to the goods represented by the bill of lading. The usual case is an indorsement of the bill of lading and its delivery to the buyer. The fundamental case upon this point is Lickbarrow v. Mason, decided in 1793."^ This case arose out of a sale of unspecified goods by Turing & Son to Freeman. Pursuant to the contract, Turing shipped corn consigned to Freeman and took the bills of lading in his own name. Two of these bills, which were in quadruplicate, Turing indorsed in blank and sent to Freeman. The latter transferred them to the plaintiff as security for an obligation. Freeman having become insolvent before arrival of the goods, Turing, through the defendant as his agent, attempted to retake possession as an unpaid seller. The Exchequer Chamber held that the title to the goods remained in the seller; that the buyer Freeman, having no title, could convey nothing to the plaintiff, even by endorsing to him a bill of lading. On review by the House of Lords it was held thatfby the assignment of the bill of lading the legal title had passed to Freeman and from him to the plaintiff, and that the plaintiff having an equity in addi- tion to his legal title, the seller's merely equitable right could not prevail.) It was further specifically held that the transfer of the bill of lading by an indorsement in blank had the same effect of transferring the legal title, 103—2 T. R. 63; 1 II. Black- stone 357, 2 Id. 211; 5 T. R. 683. TRANSFER OF TITLE 63 if so intended, as by indorsement to a particular person named. So, it is now consistently held that(transf er of a bill of lading has the same effect as transfer of the goods represented by it would have.^°* ) This transfer of the bill of lading, like the delivery of goods, may be made upon condition. ( If it is transf'crred upon condition and the seller, i. e., the tranferor, does not intend title to pass until the condition is fulfilled, title does not pass — as between the parties — until then."^*) Unspecified Part of Specified Mass. — An agreement to sell property which is itself unidentified, but which is described as part of a definite and specified larger mass of goods, is a common transaction. The question then arises whether the buyer has any of the privileges and liabilities of ownership in respect to the mass before some particular part has been designated. It is obvious, of course, that he can not be the o^vner of any physically limited or separated part until such particular part has been specified. Even if by the agreement he is bound to accept, or if he has authority to select for himself what part he will take, until such selection has actually been made he is not the owner of any particular part, but has only a legal right to become the owner of some particular part. As we have already pointed out, ownership is not a mere idea, but is the legal connection of certain ideal rights and duties with some particular, definite thing. Until there is a definite thing to be the object of owner- ship there is no ownership. And while the thing described as sold is still an undetermined part of some- thing else, there is no definite thing to be o^\^led. It is, however, a legal concept that several persons may have certain rights and duties of ownership in respect to the same one particular thing. "When the legal rights 104— See post, p. 219, 221, for 5 H. of L. 116; Godts v. Rose, 25 full discussion. I.. J. R.. C. P. 61; Wait v. Baker, 105 — Shepherd v. Harrison, L. R. 2 Exch. Kep. 1. •See Uniform Sales Act, Section 34. 64 THE LAW OF SALES which go to make up the concept of ownership were predicated upon the fact of physical possession, it is true that "ownership" by more than one person of a single chattel would have been more or less paradoxical. Philosophically it is perhaps demonstrable that two per- sons can not simultaneously "possess" a single thing any more than two spaces can be simultaneously occupied by it.^**^ But rights and obligations are no longer founded on actual physical possession. The history of the change would be out of place in a work of this type and it is sufficient to say that several persons may have a co-ownership, an "ownership in common" in a single thing. Although one who owns a thing obviously can not invest another with rights in respect to a particular part of that thing until he indicates in some way the part to which the new rights shall apply, nevertheless the owner of a thing can invest another with rights in respect to the entire thing without thereby necessarily divesting himself of all rights. So long as we know with what rights and liabilities he has invested the second person, it is immaterial by what name they be collectively called. Usually the courts do speak of them as rights of ' ' owner- ship in common". The transaction is usually called a "sale" and the buyer is said to become an o^vner or tenant in common.^"''* 106 — For a discussion of the v. Stowell, 51 N. Y. 70, something difference of ideas as to concur- more than tenancy in common, rent possession and ownership of As to the rights themselves, re- land and of chattels see Pollock & gardless of their name as owner- Maitland, Vol. 2, p. 180 ft. ship, or otherwise, it has been 107 — Loomis v. O'Neal, 73 Mich, held that one in whom the owner 582; In Kimberly v. Patchin, 19 has created an interest in an un- N. Y. 330, the court held that the specified part of a mass of grain, or buyer of an undistinguished num- other fungible goods, may main- ber of bushels of a larger mass of tain assumpsit against the original wheat acquired an ownership, but owner. Loomis v. O'Neal, 73 said that it was something more Mich. 582, "The refusal to recog- than a tenancy in common; Lobdell nize the right of the co-tenant •See Uniform Sales Act, Section 6, (1), (2), 76, "Fungible goods." TRANSFER OP TITLE 65 Intent of Parties. — It thus appears that the law recognizes a possibility that rights or liabilities such as usually connote ownership may exist coincidentally in two or more persons in respect to a single undivided mass of property. The only question to be solved, there- fore, is whether the sale of a certain quantity of a larger mass is intended by the parties to transfer such an ** undi- vided ownership" in the whole mass. It does not matter what the rights should be called, the question is whether the parties have intended that the buyer shall have rights in respect to the whole mass amounts to a conversion. The tort may be waived, and assump- sit brought"; or may have an ac- tion against the other for damages for conversion, Lobdell v. Stowell, 51 N. Y. 70; Kimberly v. Patchin, 19 N. Y. 330; or an action of tro- ver, Stall V. Wilbur, 77 N. Y. 158. It has even been held that a "tenant in common" may bring re- plevin for his own part, the court saying, "It has been quite gener- ally held that tenants in common or persons who are separate own- ers of articles stored in mass, such as corn, wheat, coal, logs, etc., each article being of like nature and quality with the others, may have replevin for his proportion- ate part of the intermixed chat- tels if the same is wrongfully de- tained and the action is necessary for the maintenance of his rights, subject to deductions for any loss or waste properly falling to his share while the property remained in mass." Manti City Savings Bank v. Peterson, 33 Utah 209, 126 Am. St. 817, 93 Pac. 566; Piaz- zek V. White, 23 Kan. 621, 33 Am. Rep. 211; Halsey v. Simmons, 85 Ore. 324, 166 Pac. 944. As recognizing the possibility of rights in respect to one partic- ular thiijg in two persons simul- taneously, see Gardiner v. Suy- dam, 7 N. Y. 357; Seldomridge v. Bank, 87 Neb. 531, 127 N. W. 871; 30 L. R. A. (n. s.) 337; Brownfield V. Johnson, 128 Pa. 254, 6 L. R. A. 48, dictum. "The weight of American authority supports the proposition that when property sold to be taken out of a specific mass of uniform quality, title will pass at once upon the making of the contract, if such appears to be the intent." Kimberly v. Patchin, 19 N. Y. 330, "None of (the deci- sions) go to the extent of holding that a man cannot, if he wishes and intends so to do, make a per- fect sale of a quantity without actual separation, where the mass is ascertained by the contract and all parts are of the same value and undistiuguishable from each other." Tobin v. Portland Mills Co., 41 Ore. 265, depositors of wheat in a warehouse called "ten- ants in common thereof, having such an undivided interest therein as the quantity stored by each bore to the amount deposited." Bretz V. Diehl. 117 Pa. 589. 66 THE LAW OF SALES itself, as distinct from mere rights of action against the seller personally.^^^ Presumption of Intent. — The intention to create rights to the property itself need not be expressed. The courts may conclude sucli to have been the intention from an examination of the circumstances. In Hurff v. Hires^**^ it appeared that Hurff had bought from Heritage 200 bushels of corn which was part of a mass of 400 or 500 bushels belonging to Heritage. Nothing whatever appears to have been said in regard to legal rights or liabilities. Before there was any separation of the corn sold from the mass, Hires, a sheriff, levied upon the whole mass as being the property of Heritage. Despite the levy Heritage separated 200 bushels from the mass and delivered it to Hurff, and Hires brought an action of trover. The lower court decided in favor of the sheriff "on the theory that though the purchaser bought the corn and paid the price, the title did not pass to him, because the quantity sold was not separated from the original bulk until after levy, and that therefore the whole still remained liable to seizure as the property of the vendor. ' ' This holding was reversed by the Supreme Court, which said, ''It is the general rule that the prop- erty in goods and chattels passes under the contract of sale according to the intention of the parties. The diffi- culty in the application of this rule is in determining under what circumstances the parties shall be considered as having evinced an intention that property in the sub- ject-matter of sale should pass from the vendor to the 108 — It must be borne in mind mass itself is known. Many cases that If the sale is merely of cer- turn in reality upon lack of iden tain property, described, but not tity of even a larger mass >om identified even to the extent of which property sold is to be taken, being part of a larger definite although they appear on casual mass, no title, even an undivided reading to hold that title in corn- one, can pass. It is impossible to mon could not pass, conceive of even an ownership in 109 — 11 Vroom (N. J. L.) 581,29 common in a mass unless the Am. Rep. 282. TRANSFER OF TITLE 67 purchaser." After pointing out that intention to pass title is found readily or reluctantly according to the degree of protection thought due the seller, the court continued, ''The tendency of modern decisions is to give effect to contracts of sale according to the intention of the parties to a greater extent than is found in the, older cases, and to engraft upon the rule that property passes by the contract of sale, if such be the intention, fewer exceptions, and those only which are founded upon sub- stantial considerations affecting the interest of parties." The court held accordingly that there was no legal reason why an ownership of the corn itself could not have passed to the buyer even before separation of the mass and that the question as to whether the parties so intended should have been left to the jury. In Kimberly v. Patchin, ^^^ an intent to pass an actual ownership by the sale of 6,000 bushels of grain out of a mass of 6,240 was deduced by the court — mthout refer- ence to a jury — from the fact that the owner not only gave a bill of sale for 6,000 bushels but thereafter stated in writing that he held 6,000 bushels of grain as bailee of the buyer. "Where there are no particularly indicative facts, except the fact that the sale is of part of a mass, the courts are in disagreement as to what conclusion of intent they will draw. In England it is the consistent policy to presume that there was no intent to create any OA\Tier- ship in the undivided mass. An early case, much referred to in American decisions,^^^ did hold that a sale of 10 tons of oil, to be taken from a tank containing 40 tons, gave the buyer a right of action in trover against the seller, despite the fact that the part sold had never been in any way distinguished from the whole. This case, however, has not been followed in England."^ 110—19 N. Y. 330. 530 dictum; Aldridge v. Johnson, 111— Whitehouse v. Frost, 12 7 El. & Bl. 885 (sale of grain); East 614. Knights v. Whiffen, L. R. 5 Q. B. 112— Gillett V. HiU, 2 C. & M. 660 (sale of graiu); Wallace v. 68 THE LAW OF SALES Estoppel. — But, nevertheless, when the action is by the buyer of an unseparated part of a mass against the possessor of the whole, even the English courts show a readiness to allow recovery on the ground that the possessor has done something, however slight it may be, to estop himself from denying that the goods sold have actually been separated.^^^ Fungible Goods. — In America a distinction is made between sales of part of ''fungible" goods and those which are not fungible. By ''fungible" or "homoge- neous" is meant goods which are generally considered in terms of measurement rather than of individual units. Grain, for instance, is thought of in bushels rather than in numbers of kernels, and is considered as fungible. Hams and automobiles, however, are sold by numbers of individual units, not by measures-full, and bricks by numbers of bricks, not by tons. Such masses are not fungible. In case of sale of part of a mass of fungible goods there is, in America, a tendency to presume that an undivided ownership was intended to pass."* Breeds, 15 East 522, 12 Rev. R. 114— Gushing v. Breed, 14 Allen 423, 50 tons oil out of 90 tons in (Mass.) 376, 92 Am. Dec. 777; various casks — distinguished from Chapman v. Shepard, 39 Conn. 413, Whitehouse v. Frost on ground sacks of meal; Welch v. Spies, 103 that it was custom for seller to Iowa 389; Cloke v. Shafroth, 137 measure water and "foot-dirt" and 111. 393; McReynolds v. People, 230 fill up casks; White v. Wilks, 5 111. 623 dictum; Mchts. Bk. v. Taunt 176, 14 Rev. R. 735, 20 tons Hibbard, 48 Mich. 118; Waldron v. oil out of "vendor's stock" which Chase, 37 Me. 414; Kaufman v. was in various casks, notes that Schilling, 58 Mo. 218; Halsey v. oil was not in single container; Simmonds, 85 Ore. 324, 166 Pac. Bush V. Davis, 2 M. & S. 397, 15 944; Seldomridge v. Bank, 87 Neb. Rev. R. 288, 10 out of 18 tons of 531, 127 N. W. 871, 30 L. R. A. flax in mats; Shepley v. Davis, 5 (n. s.) 337; Brownfield v. John- Taunt 617, 15 Rev. R. 598, 10 out son, 128 Pa. 254, 6L. R. A. 48; Rus- of 30 tons of hemp. sell v. Carrington, 42 N. Y. 118; 113-Gillett V. Hill, 2 C. & M. Cassinelli v. Humphrey Supply 530; Aldridge v. Johnson, 7 El. & C«- ^^ ^^^^ ^^^' ^^^ ^^^^ ^23. ex- Bl. 885: Knights v. Whiffen, L. R. ^^""^^^ ^^ ^^'® "^ P^""* "^ ^ '^^^®^ BOB 660 mass of hay; The Iron Cliff Co. v. Buhl, 42 Mich. 86, iron ore. TRANSFER OF TITLE 69 Some cases, however, are in fiat conflict with this pre- sumption of intent and hold that title does not pass unless the intent is clearly evinced.^^^ A distinction must be noted between these confiicting cases and those in which some other rule of presumption than that referring to separation prevents a holding that title passed, as for instance the rule that where the seller is to put the goods in a deliverable condition title is presumed not to have passed until that is done.^^^ There is also a pos- sibility of confusion in the fact already referred to, that some cases appear to hold that title to part of a mass will not pass when, in fact, in the particular case, there is not even a mass identified from which the property described is to be taken.^" Non-Fungible Goods. — When the mass is not "fungible", even though all the individual components of it may be of probably equal value, the judicial custom is to hold that a mere sale of a part thereof pre- sumptively indicates no intent to pass title in the mass itself."^ But it is not impossible that parties should create coin- cident rights of 0A\'nership in the same mass, even though it be not fungible, and when the circumstances are such as clearly to demonstrate that they did so intend, even 115 — Wood & Co. V. Roach, 52 defendant had a seller's lien on 111. Ap. 388, the same result might the property. have been reached upon the Illi- 116— Backhaus v. Buells, 43 Ore. nois doctrine that change of pos- ^^^' ^^ ^ie v. Crosby, 43 Ore. 612; . e 1. Bailey v. Long, 24 Kan. 90. session is necessary to perfect ^^J ^^ „ *' „ , . , "" . ^ , ^ 177— Kellog V. Frolich, 139 Mich, title as against subsequent pur- ... Chasers; Mercer Natl. Bk. v. Haw- n8_Gardner v. Suydam, 7 N. kins & Co.. 104 Ky. 171; Lawry v. ^ 357^ ^^^^ ^^ A^^^.. commercial Ellis, 85 Me. 500, hay from a mow; ^atl. Bk. v. Gillette, 90 Ind. 268; Jeraulds v. Brown, 64 N. H. 006; Fordice v. Gibson, 129 Ind. 7; Gro- Keeler v. Goodwin, 111 Mass. 490, cer Co. v. Clements, 69 Mo. Ap. decision also put on the ground 446; Ferguson v. Northern Bk. of that plaintiff's action for conver- Ky., 14 Bush. (Ky.) 555, 29 Am. sion was precluded by fact that Dec. 418, hams. 70 THE LAW OF SALES without express statement, the courts will hold that such an ownership in common is created."® Specified Part of Larger Mass. — Attention may be called to the distinction between the need of separation from a larger mass for purpose of identification and sep- aration of already identified goods merely for the sake of physical possession. In the latter case there is of course no reason, from the point of view of identification, why title should not pass. Thus in the case of a sale of a stated number of tons of hay to be taken in a layer from the top of a hay-mow, there is nothing indefinite about the identification of the property sold. It is clearly identified as the top layer of the mow to a depth of the number of feet or inches required to weigh the stated amount. Other things, such as an undertaking of the seller to bale it, may raise a presumption that title was not intended to pass, but the identification is sufficient to constitute it a sale of specific property. So also, if one having on hand a quantity of barrels of mackerel sells * ' all he has ' ' of grades ' ' numbers 1 , 2 and 3 ' ', the descrip- tion is sufficiently definite to allow the usual presumption of intent as to the passing of title of specific property to apply.^^" Goods Not in Existence. — Parties sometimes contract for the sale of goods which may be specified, or merely described, but which the seller does not then o^vn, or which are not even in existence. In such case it is quite obvious that no title can pass at the time the contract is 119 — Hall V. Boston, etc., R. R. Cassinelli v. Humphrey Supply Co., 14 Allen (Mass.) 439, 92 Am. Co., 43 Nev. 208, 183 Pac. 523, hay. Dec. 783. 50 bbls. of flour out of a 120-Ropes v. Lane, 9 Allen (Mass.) 502; Lamprey v. Sargent, larger number; Kingman v. Holm- ^g j^ ^ 241, sale of all the "hard" quiet, 36 Kan. 735; Mertz v. Put- bricks from a certain mass of hard nam, 117 Ind. 392; MacKellar v. and soft ones; Dunkart v. Rine- Pillsbury, 48 Minn. 396; State v. heart, 89 N. C. 354, all of seller's Wharton, 117 Wis. 558, lumber; trees of a stated girth. TRANSFER OF TITLE 71 entered into. If the seller docs not own the goods, or if there are no goods in existence to be owned, he has nothing in the way of a title — there are no rights of ownership belonging to him — to be transferred. The transfer, if it is to be recognized at all by the courts, can only occur at a time after the seller has acquired an ownership by bringing the goods into existence, or otherwise. ^^^ The same logic applies in the case where something that had been in existence has gone out of objective exist- ence at the time the agreement is made. There being nothing in existence for ownership to apply to, there is no ownership. If, for instance, one person sells to another something which has passed out of existence, the buyer is allowed to recover his money on the ground that he received nothing from the seller.^^^* Contracts to Sell. — Such an agreement, however, is not wholly void. Persons can enter into an agreement to transfer ownership of anything which is capable of being described. If such an agreement conforms to the legal requisites of contracts generally, it will not be void merely because the person agreeing to sell does not in fact own the thing described, or because the thing is not even in existence. Such a contract is valid and the par- 121 — Low V. Pew, 108 Mass. 347; nient. Sheriffs or other designat- Gibson v. Pelkie, 37 Mich. 380; ed court officers, in making sale Emerson v. European etc. R. R. of property of judgment creditors, Co., 67 Me. 387, 24 Am. Rep. 39; if they act in accord with law, can Taylor v. Barton-Child Co., 228 transfer ownership from the Mass. 126, 117 N. E. 43. judgment debtor to the purchaser, 122 — Martin v. McCormick, 8 although they themselves have no N. Y. 331; Allen v. Hammond, 11 title. As a matter of fact, how- Peters (U. S.) 63; Gibson V. Pelkie, ever, such officers act as agents 37 Mich. 380. of the real owner and, hence, are There is an apparent exception not really within the rule. to the rule, that one who has no Persons acting in the capacity title himself can not give one, in of agent for an owner can, of the case of sales by order of court course, make legally effective or in pursuance of legal enact- transfers of his ownership. *See Uniform Sales Act, Section 7, (1), (2). 72 THE LAW OF SALES ties are liable for its breach as in any other contract. Contracts of sale of wheat, as made on the various exchanges, often before the wheat described is grown, and sales of cotton not yet ready for the picking, are very frequent instances of contracts to pass title to something not even in existence at the time. These con- tracts are universally upheld as valid.^^' Even if the agreement is in form a present transfer, rather than a contract to transfer title in the future, the courts mil nevertheless give it effect as a contract to transfer when possible.^^** Acquisition of Goods. — The question then arises, what is necessary to accomplish the transfer of title when the seller does become owner and, hence, able to pass it? If it is clear that the parties had in mind that it should pass the moment the seller himself acquired it, there seems to be no reason why that intent should not be given legal effect. There is very little authority on this par- ticular point. There is plenty of authority that it does not in fact pass coincidently with the seller's becoming able to pass it. But this practically all turns on the as- sumption that the parties did not intend it to pass then. It does not settle the question whether it could pass then if they clearly so intended. The case of Low v. Pew^*^ is treated by commentators as authority for the proposition that title can not pass by virtue of the seller's mere ac- quisition of it, even if the parties so desire. In that case the facts were that the parties had entered into a contract reading, ''We, John Low & Son, hereby sell, assign and set over unto Alfred Low & Co. all the halibut that may 123— Hamil v. Flowers, 184 Ala. hurst, 127 Ga. 298; Forsythe Mfg. 301, 63 So. 994; Robinson v. Hirsch- Co. v. Castlen, 112 Ga. 199. felder, 59 Ala. 503; Baker v. Leh- 124— Bates v. Smith, 83 Mich, man, Weil & Co.; 186 Ala. 493, 65 347; Low v. Pew, 108 Mass. 347. So. 321 ; Wright v. Vaughn, 137 Ga. 125-IO8 Mass. 347. 52, 72S. E. 412; Watson v. Hazel- •8ee Uniform Sales Act, Section 5, (1), (2), (3), 76, "Future goods". TRANSFER OF TITLE 73 be caught by the master and crew of the schooner Flor- ence Reed, on the voyage upon which she is about to pro- ceed * * * at the rate of five cents and a quarter per pound for flitchod halibut, to be delivered to said Alfred Low & Co. as soon as said schooner arrived * * *." The buyer paid $1,500 on account. Before the vessol got back from her voyage the sellers had become bankrupt and their assignee took possession of the schooner's cargo when she did arrive. A large part of her cargo, however, must have been caught before the bankruptcy. The buy- ers brought an action of replevin on the ground that title was in them. The court said that title could not have passed when the contract was entered into because there was then no title existing, and that if the contract were to be valid at all it must be considered as an agreement to pass title at a later date. The court then held simply that title had not passed to the buyers. As it seems a fair presumption from the form of the contract that the parties intended to pass title as soon as it should be pos- sible, the interpretation of the decision is that such in- tention mil not be given effect by the courts. It is often said that there must be a fresh demonstration of intent to pass title after the seller has become able, by acquisi- tion, or manufacturer, to pass it.^^^ 126 — In Mucklow v. Mangles, 1 held, had not passed. "A trades- Taunt. 518, however, is given a man", said the court, "often fin- very practical reason which indi- ishes goods, which he is making Gates that the rule is based on in pursuance of an order given by the seller's probable lack of intent one person, and sells them to an- te pass title by merely manufac- other. If the first customer has turing goods according to the con- other goods made for him within tract. In this case the seller had the stipulated time, he has no practically completed a boat right to complain; he could not which accorded with the specifica- bring trover against the purchaser tions of his contract of sale, had for the goods so sold. The paint- received money from the buyer ing of the name on the stern in on account of the work and had this case makes no difference." even gone so far as to paint the Inasmuch as, in this particular buyer's name upon the boat. case, the seller, who had become a Nevertheless the title, so the court bankrupt, could not have built an- 74 THE LAW OF SALES But, at any rate, whether it be because title can not be passed by the seller's mere acquisition of it, even though the parties so intend, or because it will not be assumed that the parties did so intend, the overwhelming weight of authority is that title does not pass merely as a result of the seller's acquisition of the property. The reason is not at all clear, but the rule is settled."'' other boat lor the buyer, the rea- soning seems to be a statement of general principle. The whole matter of reason is complicated by the fact that as 'between the parties themselves, the legal result of the agreement is sometimes the same as though title had passed upon mere manu- facture or acquisition. The rights which the buyer acquires, as be- tween him and the seller, are the same as those of legal ownership, but the courts say the buyer has those rights not because he is really owner in the eyes of the law, but because the seller, who is still the legal owner, will not be permitted to deny or object to the buyer's pretense of ownership. Thus in Littlefield v. Perry, 21 Wall. (U. S.) 205, 226, it appeared that Littlefield had transferred to Perry the ownership of the patent monopoly of a certain invention together with all the "improve- ments" which he should make in respect to the invention. The title to a monopoly of these improve- ments could not pass at time of the agreement because they were not in existence. Later Littlefield did make "improvements" and be- gan using them himself. Perry ♦ sued him, for infringement, on the allegation that he, Perry, owned the monopoly of them. Littlefield defended on the ground that Perry was not owner and therefore could not sue as such. The court admitted that the legal title was still in Littlefield but allowed the suit to continue nevertheless, say- ing, "Littlefield took the legal title in trust for them (Perry) and should convey. Courts of equity in proper cases consider that as done which should be. If there exists an obligation to convey at once, such courts will sometimes proceed as if it had actually been made." This case, like Low v. Pew, indicates that although the parties really intended that title should pass on its acquisition by the seller, yet it could not legally do so. Curran v. Burdsall, 20 Fed. 835; Rowley v. Bigelow, 12 Pick. (Mass.) 307; Clark v. Slaughter, 34 Miss. 65; Hickman v. Dill, 39 Mo. Ap. 246; Sherman v. Cham- plain Transportation Co., 31 Vt. 162; Harvey v. Harvey, 13 R. L 598; Thrall v. Hill, 110 Mass. 328. Even this right of the buyer, through estoppel of the seller to deny it, does not exist if the seller has not even by implication war- ranted his title. 127 — In Wheeler's Exrs. v. Wheeler, 59 Ky. 474, 74 Am. Dec. 421, the plaintiff, who was a son of the deceased testator, sought to compel his father's executors to distribute to him the property to which he was entitled by the will. The Executors answered that it was claimed by one X who had TRANSFER OF TITLE 75 Manufacture. — Neither, for one reason or another, will title be held to have passed because of mere manufac- ture of goods according to the contract by the seller."' bought it from young Wheeler be- fore the father's death, though after the will had been made. The plaintiff did not deny that he had made an agreement whereby he had "sold all my individual inter- est of all the personal property now in the possession of my said father." The court, however, held that nothing could be sold which the seller did not own and the buyer in this case had acquired no title to anything by his pur- chase. Again, in Welter v. Hill, 65 Minn. 273, it appeared that X had made what purported to be a pres- ent sale to plaintiff of flax which X expected to grow upon a partic- ular field, but for which the seed had not even been sown at the time. When the crop had been raised as agreed, it was seized by a creditor of the seller, X. The plaintiff, as buyer, claimed title in himself but the court rejected the contention, saying, "When did the title to the property pass? It did not pass when the bill of sale was made, because it was not then in existence." As nothing subse- quent had been done to pass it, it had not passed when the creditor's levy was made. McCall V. Hampton, 98 Ky. 166, 56 Am. St. 335; Elliott v. Leslie, 124 Ky. 553, 124 Am. St. 418; Skip- per V. Stokes, 42 Ala. 255, 94 Am. Dec. 646; Herbert v. Bronson, 125 Mass. 475 (future wages) ; Farm- er's National Bk. v. Coyner, 44 Ind. Ap. 335 dictum; Gile v. La Salle, 89 Ore. 107, 171 Pac. 741. In Wheeler v. Becker, 68 la. 723, 28 N. W. 40, however, a mort- gagee of property not in existence at the time was allowed to bring an action of replevin against at- taching creditors, on the ground that the mortgage took effect when the property came into the seller's ownership. Accord, Morris v. Hix, 74 la. 526, 38 N. W. 395; approved, though not in point, Mc- Master v. Emerson, 109 la. 284, 80 N. W. 389; In Maskelinski v. Wazi- nenski, 20 N. Y. Supp. 533, the buyer of property not owned by the seller was allowed to set up title to the property as against the seller, when the latter did ac- quire it, without any other pre- tense of title's having been trans- ferred. This was put upon the ground that title had passed, or at any rate the seller had waived his right to deny it. 128— Fordice v. Gibson, 129 Ind. 7, "No title passes until the thing is completely done and notice giv- en to the vendee, or some act done by the vendor designating it as the article sold, either by setting it apart, marking it or some other similar act." Robbins v. Chipman, 1 Utah 335 dictum; Heiser v. Mears, 120 N. C. 443 dictum; Up- dike V. Henry, 14 111. 378; V/est Jersey R. R. Co. v. Trenton Car Works, 32 N. J. L. 517, even though payment be made in ad- vance; Edwards v. Elliott, 36 N. J. L. 449, payment for vessel in in- stallments; First Natl. Bk. of Mar- quette v. Crowley, 24 Mich. 492; Commercial Fire Ins. Co. v. Capi- tal City Ins. Co., 81 Ala. 320, 60 Am. Rep. 162; Rev. Cutter #2, Fed. 76 THE LAW OF SALES When the goods contracted to be sold are the entire output of a factory it does seem that their manufacture indicates an intent to pass the title to them under the con- tract more certainly than in cases where the manufacturer could dispose of the particular thing manufactured and then make another one to satisfy his contract with the buyer. In Williams v. Chapman/^® the seller had con- tracted to sell the entire output of his mill for a certain time and the court held, without any discussion of the matter, that title passed to the goods produced during that time as soon as they were completed. On the other hand, in Gabarron v. Kreeft,^^** the seller had contracted to sell all the ore produced by a certain mine. Payment had been made in advance for the particular cargo of ore in question. The court held, again without discussion, that the title did not pass when the ore was produced. This very conflict, however, indicates that in such cases at least the title can pass on acquisition, or manufacture, if the parties do in fact so intend. Payment During Course of Manufacture. — Another field of conflict is the question whether, when goods to be manufactured are to be paid for in instalments, such payment effectuates a passing of title to so much of the goods, or of the particular chattel, as has been manu- factured at the time. A much cited authority on this point is Woods v. Russell.^^^ In this case it appeared that one Paton had contracted to build a ship for defendant, who was to pay in instalments at certain points of progress. After three payments had been made and before the ship was finished a question of title arose. There was very clear evidence, other than the mere pay- ments, that the builder had intended to pass title to so much as was done at the time and the court accordingly Cas. JJ111714; Gabarron v. Kreeft, 129—118 N. C. 943. L. R. 10 Exch. 274, all ore to be 130 L. R. 10 Exch. 274. produced during certain time; ^^^_^ ^^^^ ^ ^,^ 9^2. Haynes v. Quay, 134 Mich. 229. TRANSFER OF TITLE 77 held that title had passed. But the court said also, in regard to the payments, "The payment of these instal- ments appears to us to appropriate specihcally to the defendant the very ship in progress, and to vest in the defendant a property in that ship, and that, as between him and the builder, he is entitled to insist upon the completion of that very ship, and that the builder is not entitled to require him to accept any other." The holding that title to so much as is done passes as it comes into existence, and, consequently, that title to the goods is in the buyer at the time of completion is nevertheless only a legal presumption from the circum- stances. The fact that title is thus held to have passed when work is paid for m instalments and not to have passed in cases where there is no partial payment, is not due to any peculiar legal effect of part payment, but to the belief of some courts, particularly those of Eng- land, that paym^ent and its acceptance indicates a real intent that so much of the work as has been done shall belong to the buyer. This is clearly indicated in Wood v. Bell.^^^ One Joyce had agreed to build for plaintiff a ship of a certain description, for which plaintiff w^as to make payment in instalments at various times, regardless of the actual stage of completion of the work. Before the ship was completed, or in any way expressly indicated as belong- ing to plaintiff, Joyce became bankrupt and the question of title arose. The court said, ''The property does not pass merely by its being manufactured, but only when it- is the intention of the parties that it shall pass." It held that title was in the plaintiff, not because the work was to be paid for in instalments, nor because the ship was of a peculiar construction particularly required by plaintiff, nor because plaintiff's name had been punched in the keel, but because all the circumstances of the 132—5 El. & Bl. 772, 119 Eng. Rep. 669, Affd. 6 El. & Bl. 355, 119 Eng. Rep. 897. 78 THE LAW OF SALES transaction, as a whole, indicated that such had been the intent of the parties. ^^^ In America the fact that work is to be paid for in installments as it progresses, or that it is under the super- vision of the seller, or other like circumstances, is not, as a general rule, held to indicate any intent to pass title as the work is completed. In Clarkson v. Stevens,^^* the Supreme Court decided that title to a certain vessel to be manufactured for the United States government had not passed to the government on completion. In reach- ing this conclusion the court said, "The courts of this country have not adopted any arbitrary rule of construc- tion as controlling such agreements, but consider the question of intent, open in every case, to be determined upon the terms of the contract, and the circumstances attending the transaction. And such seems to us to be the true principle. According, we are of opinion, that the fact that advances were made out of the purchase money, according to the contract, for the cost of the work as it progressed, and that the government was authorized to require the presence of an agent to join in certifying to the accounts, are not conclusive evidence of an intent that the property in the ship should vest in the United States prior to final delivery. ' '^^^ 133— Moody V. Brown, 34 Me. L. 449 ; Re Revenue Cutter ft2, Fed. 107; Butterworth v. McKinley, 11 Cas. $11714; The Poconoket, 67 Humph. (Tenn.) 206; Sandford v. Fed. 265; The Yukon River Co. v. Wiggins Ferry Co., 27 Ind. 522; Grotto, 136 Cal. 538; Andrews v. Scudden v. Calais Steamboat Co., Durant, 11 N. Y. 35. 1 Cliff. 370; Clark v. Spence, 4 Ad. In the case of The John B. & E. 448; Carruthers v. Paine, 5 Ketcham, 97 Fed. 872, the court, Bing. 270; Laidler v. Burlinson, 2 while admitting that intention M. & W. 602. would govern, held that the parties ,„. ,n/. TT o rnr ^^.d uo intentiou to pass title at 1^4 — lUb U. b. oOo. ,, 4. « • i ,, J. the payment of installments even 135 — Williams v. Jackman, 16 though engines belonging to the Gray (Mass.) 514, even though an buyer had been worked into the agent of the buyer had been per- ship. For the manufacturer to In- mitted to supervise the construe- corporate property of the buyer tion; Edwards v. Elliott, 36 N. J. in something which fits the de- TRANSFER OF TITLE 79 Rule in Equity. — The rule that ownership will not be treated as having passed unless there is something more to show intent than mere manufacture or acquisi- tion, is not altogether adhered to by courts of equity. It is frequently held that whatever powers or privileges the parties intended should eventually pass to the buyer will be given effect by courts of equity, even as against third persons who have secured intervening rights, as soon as they are capable of passing. In Kribbs v. Alford^^^ plaintiff was the mortgagee of certain property already owned by the mortgagor and of other described prop- erty to be acquired. This latter property was sub- sequently acquired by the mortgagor, but before any further demonstration of intent to pass an interest in it to the mortgagee was made, the mortgagor sold it to the defendants, who took possession. These pur- chasers did not actually know of the mortgage, but were held to have had constructive notice of it because it had been recorded. The court held the plaintiff's interest to be paramount to that of the defendants. It admitted that the plaintiff's claim would be invalid at law, but said, ' ' Invalidity at law imports nothing more than that a mortgage of property thereafter to be acquired is inef- fectual as a grant to pass the legal title. A court of equity, in giving effect to such a provision, does not put itself in conflict with that principle. It does not hold that a conveyance of that which does not exist operates as a present transfer in equity, any more than it does in law. But it construes the instrument as operating by scription in the contract of sale contract has been pointed out, seems clearly to indicate that he price ascertained, etc., title will be intends, at least, that the contract presumed to have passed regard- shall apply to that particular prop- less of delivery. In Re McDonald, erty. The holding of the court, 138 Fed. 666, title to uncompleted that despite this fact he did not ships was held to have passed be- intend title to pass, is quite out of cause the parties had expressed harmony with the general prin- an intent that it should. ciple already pointed out that 135 120 N. Y. 519. when the property subject to the 80 THE LAW OF SALES way of present contract to give a lien, which as between the parties takes effect and attaches to the subject of it as soon as it comes into the ownership of the party. Such we deem the rule to be in equity in this state." The principle behind such holdings is expressed as being that, ' ' Equity treats a mortgage of property to be after- ward acquired as a contract, binding in conscience, to execute a mortgage upon it at the very instant it comes into being, and will enforce specific performance. It does more : It considers it as already done if no specific performance be requested; and then, by virtue of the equitable doctrine of notice, binds everybody to respect the equitable lien who knows of it, or, without knowing of it, has got the property without valuable considera- tion.""? Many courts have held, however, that even in equity a buyer gets no rights in the property itself by a mere sale of property to be acquired in the future."^ But even of these cases a number hold that if posses- sion is actually taken it will be treated as a transfer as of the date of the mortgage, so far as concerns prefer- ences under bankruptcy and insolvency acts."^ Potential Interests.— Sales of "potential interests*' do not fall within the foregoing discussion. They are 137— From Little Rock, etc. Lighting Co. v. Rust, 117 Ala. 680; R. R. Co. V. Page, 35 Ark. 304. Pennock v. Coe, 23 How. 117; Butt Accd. Phillips v. Winslow, 18 B. v. Ellett, 19 Wall. 544. Monroe (Ky.) 431, 68 Am. Dec. The subject is discussed at 729; Pierce v. Milwaukee, etc. length in 19 Harvard L. R. 557. R. R., 24 Wis. 551, 1 Am. Rep. 203; 138— Gittings v. Nelson, 86 III. Morrill v. Noyes, 56 Me. 458, 96 591; Redd v. Burrus, 58 Ga. 574; Am. Dec. 486; Apperson v. Moore, Mchts. Bk. v. Lovejoy, 84 Wis, 30 Ark. 56, 21 Am. Rep. 170; Hurst 601; Chase v. Denny, i;;o Mass. & McWhorter v. Bell & Co., 72 566; Orcutt v. Moore, IM Mass. Ala. 336; Grant v. Steiner, 65 Ala. 48; Cooke v. Blanchard, 144 Mass. 499; Holroyd v. Marshall, 10 H. of 207. L. Cas. 191, the leading English 139— Chase v. Denny, 130 Mass. case. But, contra, Burns v. 566; Mower v. McCarty, 79 Vt. 142, Campbell, 71 Ala. 271, 288; Elec. 7 L. R. A. (n. s.) 418, annotated. TRANSFER OF TITLE 81 treated by both equity and law courts either as though the *' potential interest" were a thing capable of sale and in actual existence at the date of the contract, or as though acquisition of ownership alone passed the title. There is no inherent or practical reason for this distinc- tion. The ''potentiality" may have a separate existence metaphysically, but it can not be so distinguished really. The practical reasons that might apply in the preceding cases would apply also to cases of sales of a potentiality. Nevertheless, the legal distinction does exist. In those cases where the thing sold is the future natural increase or natural production of something already owned by the seller it is generally held that a present demonstration of intent to transfer ownership will be recognized by the courts as having transferred it when the thing does come into existence, without any further demonstration of intent. As was just pointed out, a buyer of something not in existence at the time of sale, to whom there has been no subsequent transfer, has no legal rights against a third person who acquired an ownership after the thing came into existence. But where the thing sold is to come into existence as the natural increase or product of something already o"s\Tied by the seller, such a buyer's rights are treated as superior to those of another who purchased after the thing came into existence. For instance, in one case^*° it appeared that Rogers had allowed his stallion to cover Buler's mare, on Buler's agreement that the resulting colt should be the property of Blevins. Nothing was done thereafter to effectuate or demonstrate a transfer. When the colt was born, Buler, in breach of his agreement, sold it to McCarty. Blevins, however, was allowed to recover it in replevin on the ground that he had title. This holding differs 140 — McCarty v. Blevins, 5 Yerger (Tenn.) 195, 26 Am. Dec. 262, 82 THE LAW OF SALES from the customary ones, which support the third par- ties' rights as against one who had bought before the chattel was in existence, because of the fact that the colt was ' * potentiallj'' " in existence at the time of the agree- ment.^*^ It does not appear with certainty from the cases, and does not particularly matter, whether the title to the potentiality is considered as passing, so that the colt, or the crop, or whatever the thing may be, belongs to the buyer as the product of the potentiality of which he had already become owner, or whether the courts simply make such sales an exception to the general rule and hold that title to the colt, etc., transfers to the buyer when it comes into existence because of the previous agreement that it should do so and without any concurrent act. The result is the same on either theory. Some cases support the former theory and indicate that the *' potentiality" is something capable of an own- ership separate and apart from the ow^iership of the thing of which it is physically an indivisible part. Thus, one person may be o^vner of a mare and another owner of her reproductive power, although the two things can not be physically separated. In Fonville v. Casey ^*^ defendant had contracted that the first female colt to be born from his mare should belong to plaintiff. When a female colt was born defendant refused to let plaintiff have her. The court permitted plaintiff to recover in trover as owner of the colt. The reason given was that *' although it be uncertain whether the thing granted will ever exist, and it consequently can not be actually in the grantor, or certain, yet it is in him potentially, as 141 — Sawyer v. Gerrish, 70 Me. Mitchell v. Abernathy, 194 Ala. 254, 25 Am. Rep. 323; Watkins v. 698, L. R. A. 1917 C 6; Nestell v. Wyati, 9 Baxt. (Tenn.) 250, 40 Am. Hewitt, 19 Abb. N. C. (N. Y.) 282, Rep. 90; Booker v. Jones Admx., crop from roots already in ground. 55 Ala. 266; Fonville v. Casey, 1 142—1 Murphey (N. C.) 389, 4 Murphey (N. C.) 389, 4 Am. Dec. Am. Dec. 559. 559; Hull V. Hull, 48 Conn. 250; TRANSFER OF TITLE 83 being a thing accessory to something which he actually has in him, for such potential property may be the sub- ject, of a contract executed, as a grant or the like." This indicates that a present title to the potentiality passed 143 What is a Potential Interest. — This rule, that, title to the tangible thing sold is in the buyer as soon as it comes into existence, applies only when the thing was ** potentially " in existence at the time of the contract. Generally speaking, it may be said that nothing has potential existence which is not the natural increase or product of something in tangible existence. The young of animals, crops produced by the earth, and wool grown upon animals are all natural products and have all been held to have a potential existence. Only such things are natural products, and, Avith some notable exceptions, nothing else has been held to have a potential existence. A probability, or expectation, that because of one's possession of certain things one can acquire or create other things by his own exertions, and not as the result of the action of nature, is not a potential interest. In Low V. Pew,^** there was a probability that the crew of a fishing schooner would catch fish, but the fish would not be the natural production of the vessel, and it was held that they had no potential existence. So, too, in Orcutt V. Moore,^" the owner of land had leased it to a tenant for half the crop which the tenant should raise. The owner then sold his half of the prospective crop to the plaintiff, but before plaintiff could take possession of it, after its eventual maturity, defend- ant seized it for an execution creditor. The court 143 — Losecco v. Gregory, 108 Hawley, Hobart 132, to which La. 648, "Hope of a future crop, most cases on potential interest as an incorporeal thing, separate go back for authority does not in- from the crop itself" is made mer- dicate either theory, chantable by Civ. Code, sec. 2450, 144—108 Mass. 347. 2451. 145—134 Mass. 48. The early case of Grantham v. 84 THE LAW OF SALES said the rights of the parties depended upon a find- ing by the jury as to whether tlie owner of the land had retained a potential interest in half of the crop or had sold his entire potential interest to the tenant and was merely to be repaid with half of the crop. If he had retained an ownership in the future crop, and had con- veyed to the tenant ownership in only half of what should be raised, his sale of his potential interest to plaintiff gave plaintiff title to the half of what had been raised. But if the lessor had intended to transfer owner- ship of all the crop to the lessee and take back half of it as pay, he had not a potential interest but only an expectancy of payment. This expectancy he could not transfer like a potential interest and defendant's rights would be superior to plaintiff's. This illustrates well the difference in rules between sale of what one does not o^vn, but expects to acquire, and the sale of a poten- tiality out of which some tangible thing is expected to spring. In the former case title does not pass without some demonstration of intent to pass it after the seller has acquired it ; in the latter the title to the tangible thing vests in the purchaser immediately on its coming into existence as a result of the sale of the potentiality."® 146 — Sortie cases take a con- ment lien against all of H's prop- trary view and hold that there erty. The issue was as to re- may be a potential interest which spective rights of K. and plaintiff will pass title in futuro in things in this excess. The court called which are the expected but not H's right to the excess a "poten- the natural product of property tial interest" in it and declared already owned. In Wiant v. K's title therefore superior to that Hayes, 38 W. Va. 681, one H. of plaintiff. owned certain land which was In Dargin v. Hewlett, 115 Ala. about to be sold for taxes. By 510, the owner of a race track was the law any excess from the sale said, as a matter of dictuvi, to over the amount of taxes would have a "potential interest" in the belong to H. Before the tax sale profits of its operation which H. sold to K. his right to any could be the subject of sale so as possible excess. The excess not to pass title without further act. being in existence K. could have As the action was between the no title at that time. Subsequent parties for an accounting in to this, plaintiff acquired a judg- equity, the statement was unre- TRANSFER OF TITLE 85 There is some question whether the doctrine of poten- tial interest is broad enough to pass title, without fur- ther act, to crops which are not even planted at the time of sale. Some courts have held that even in such case title passes as soon as the crop comes into existence.**'' The general rule, however, appears to be that there is no potential interest in crops for which the seed has not been soAvn.**^ It has even been said that title would not pass until the crop was threshed and ready for dehvery.**^ There is a similar conflict as to whether there is a potential interest in the young of animals before the dam has actually been covered by the sire. Some cases recog- nize that there is such an interest prior to impregna- tion.*^° Other cases hold that no title passes by the agreement, without some subsequent act, unless the off- spring was in foetu at the time.*^* lated to any issue. Kerr v. Crane, 109; Miller v. Chapel, 35 Minn. 212 Mass. 224, 40 L. R. A. (n. s.) 399, 29 N. W. 52; but, compare 692. As to whether the assignment Welton v. Hill, 65 Minn. 273; of a debt due or to become due Patch v. Tutin, 15 M. & W. 110. creates in the assignee a title or 143 — Farmers Natl. Bk. v. mere personal right, see the con- Coyner, 44 Ind. Ap. 335; Hutchin- troversial articles by Messrs. Cook son v. Ford, 9 Bush (Ky.) 318, 15 and Williston in the Harvard Law Am. Rep. 711 ; Apperson v. Moore, Review. 30 Ark. 56, 21 Am. Rep. 170; Hurst Many cases hold that an assign- v. Bell, 72 Ala. 336, dictum; ment of rights of action, to be- Grant v. Steiner, 65 Ala. 499; Wel- come effective in futuro, Is valid, ton v. Hill, 65 Minn. 273. but this does not involve question 149 — Welton v. Hill, 65 Minn, of title and should not be con- 273. ^^^^^- 150— McCarty v. Blevins, 5 147— Dickey v. Waldo, 97 Mich. Yerger (Tenn.) 195, 26 Am. Dec. 255, holds that the buyer could 262; Hull v. Hull, 48 Conn. 250; bring an action for conversion Fonville v. Casey, 1 Murphey (N. against the seller; Argues v. C.) 389, 4 Am. Dec. 559. Wasson, 57 Cal. 620, 21 Am. Rep. 151— Bates v. Smith, 83 Mich. 718; Jones v. Webster, 48 Ala. 347. CHAPTER III Seller's Remedies and Rights 1. Both Title and Possession Retained Thus far we have discussed the question whether, in the particular case, title has passed to the buyer or not. We now assume, without further discussion, that it has passed or has not passed as the fact may be in the par- ticular case, and consider the seller's remedies upon that assumption. Breach of Contract. — As was before pointed out, every transfer of title must be preceded or accompanied by an agreement to pass title, which agreement is in effect a contract, either express or tacit. Until there is at least a contract to buy and sell there is of course no *' seller" to claim any remedy — there is at most only a would-be seller. But after a contract has been entered into, and before title has been passed, the seller has the same rights and remedies that any promisee under a contract has. The buyer has promised to take the title to certain described property and to pay a certain price in exchange therefor. Failure so to do has the same effect, and no more, as any breach of contract. It would be out of place to discuss the rights in respect to a con- tract and the remedies for its breach in this work. They involve too general a knowledge of contracts to be briefly discussed and reference must be made to works treating of contract law especially. In general, it may be said mthout discussion, that under certain circumstances of failure by the buyer to perform his promise, the seller may treat the contract 86 THE SELLER'S RIGHTS 87 as rescinded and as though it had never existed.* In any event, if there has been a breach by the buyer the seller may treat his own contract liability as being at an end and need do nothing more under the agreement. He may have received nothing from the buyer, but, con- versely, he has parted with no title and may not even have parted with possession. If the buyer breaks his contract, the seller, regardless of his other remedies, may always sue for damages. It is not the purpose of this book to discuss what consti- tutes a breach of contract by a party thereto. Neither can the things which the other party must do, or the posi- tion he must assume, before he can sue because of the breach, be here gone into. It may be said, however, that, broadly speaking, the seller must himself be mlling and able to carry out his side of the bargain, and must have done everything necessary according to the contract to entitle him to performance by the buyer.f Damages. — If the buyer 's breach occurs before the seller has parted with either title, or possession, it is obvious that the seller's loss, his damage, is only the difference between what he could get immediately from some other buyer and what the defaulting buyer agreed to pay. Since he still has the chattel, he is not damaged to the full extent of the agreed price, but only to the extent of the difference in realizable value of the chattel and the agreed price. This is the clearly settled rule.^ 1— Bigelow V. Legg, 102 N. Y. 173; Mayo v. Lathern, 159 Mich. 652; Unexcelled V. Pontes, 130 Pa. 136; Moffat v. Davitt, 200 Mass. 536; Murray v. Doud, 167 HI. 368; 452; Rickey v. Tenbroeck, 63 Mo. Cohen v. Piatt, 69 N. Y. 348; 563; Poel v. Brunswick-Balke Co., Pittsburgh etc. R. R. v. Aeck, 50 159 N. Y. App. Div. 365; Peters v. Ind. 303; Tufts v. Bennett, 163 Cooper, 95 Mich. 191; Mohr Hard- Mass. 398; Manhattan, etc. Ry. ware Co. v. Dubey, 136 Mich. 677, Co. V. Genl. Elec. Co., 226 Fed. difference between contract and ♦See Uniform Sales Act, Section 65. tSee Uniform Sales Act, Section 41, 42, 43, (1), (2), (3), (4), (5), 44, (1). (2), (3), (4), 45, (1), (2), 46, (1), (2), (3). 88 THE LAW OF SALES This value to the seller of the chattel which he still owns should logically be the largest amount which he could get from someone else — that is to say, its market ^alue — as soon after the buyer 's refusal as he could rea- sonably be expected to re-sell it. There is very much loose statement in the decisions, but this rule is the basis on which the courts strive to ascertain the damages fairly.** Of course, if the seller would be put to extra expense in finding another purchaser and selling to him, the value of the chattel to the seller would not be the gross price of the resale, but that price less the cost of making the second sale. The courts therefore allow this expense to be deducted from the possible resale value in order to fix the actual value to the seller of the chattel left in his hands by the defaulting buyer.^ On the other hand, if the seller could get rid of the goods to another without certain expenses which he cost to seller rejected as measure of damage; Cole v. Zucarello, 104 Tenn. 64; Krebs Hop Co. v. Lives- ley, 59 Ore. 574, not limited to difference between contract price and price, higher than market value, which defendant later of- fered; Schramm v. Boston Sugar Co., 146 Mass. 211. This common law rule has been declared by statute in some states. 2 — It has even been held that this difference between the con- tract price and the market value must be stated in the petition, Ridgley v. Mooney, 16 Ind. Ap. 362; Dill v. Mumford, 19 Ind. Ap. 609. 3 — Peters v. Cooper, 95 Mich. 191; Am. Hide Co. v. Chalkley, 101 Va. 458; Holliday v. Lesh, 85 Mo. Ap. 285; Tufts v. Grewer, 83 Me. 407; Piowaty v. Sheldon. 167 Mich. 218; Woods v. Cramer, 34 S. C. 508; Slaughter v. Marlow, 3 Arizona 429; Hill v. McKay, 94 Cal. 5, cost of transportation to nearest market; McCracken v. Webb. 36 la. 551, cost of keeping till market could be found; Red- head Bros. V. Investment Co., 126 la. 410, Id; Lewis v. Greider, 51 N. Y. 231, insurance; Best Mer- cantile Co. V. Brewer, 50 Colo. 455, seller's traveling expenses; but of. Penn. v. Smith, 93 Ala. 476; Texas Lumber Co. v. Rose (Tex.) 103 S. W. 444, but not expenses of attempted collection; Zimmeister V. Rock Island Canning Co., 145 Ky. 25, nor unnecessary expenses; Chapman v. Ingram, 30 Wis. 290, Id; Gehl v. Milwaukee Produce Co., 105 Wis. 573, Id; Thurman v. Wilson, 7 111. Ap. 312, Id; Armsby Co. v. Raymond Bros. Co., 90 Neb. 553. necessity depends on facts of each case. THE SELLER'S RIGHTS 89 would have been put to had the buyer not broken the contract, in such case the seller is not damaged by the breach to the full amount of the difference between the contract price and the resale value, but to that amount less the expense saved. This saving of expense should be deducted from the difference.* Ascertaining Damage. — It being established that the seller's damage is the difference between the agreed price and the amount he can get for the chattel otherwise, the question is how the latter amount shall be ascertained. This is a matter of evidence. Anything that reasonably and properly tends to show the market value may be given in evidence. If no evidence at all is given, the presumption is that the market value and the contract value are the same and the damage awarded will, therefore, be merely nominal — six cents, or any other small sum awarded for the sake of carrying costs in the suit in the plaintiff's favor.^ On the other hand it might be that the chattel con- tracted for has no monetary value, no saleability to anyone else at all. In such a case the actual loss to the seller through the buyer's breach of contract, being the difference between what the buyer agreed to pay and the monetary value of the chattel to the seller, which is nothing, would be the full amount of the contract price.^ If it happens that the market value at the time of breach was in fact higher than the contract price, and the seller has elected to treat the contract as broken, and has resold at the higher price, the buyer is, of course, not entitled to the surplus. The goods were not his — ^he having refused to accept the title — so that he would have no right to any part of the resale price on that ground, 4 — Newark City Ice Co. v. S. 867; International Textbook Fisher, 76 Fed. 427. Co. v. Schulte, 151 Mich. 149. 6 — Manhattan City, etc. Ry. Co. 5— Tufts V. Bennett, 163 Mass. v. Genl. Elec. Co., 226 Fed. 173; 398; Petigor v. Ward, 74 N. Y. Wells v. Maley. 5 Ky. L. Rep. 77. 90 THE LAW OF SALES and, having broken the contract, he can not thereafter elect to enforce it.' It is not obligatory for the seller to resell the chattel if he can furnish satisfactory proof of its actual mone- tary value at the time of breach in some other way.' Indeed, in the case of a contract of sale of goods to be manufactured and a repudiation by the buyer before their completion the seller is not expected to continue the work.® It is not even permissible for him to do so.^° If the seller does elect to retain the goods as his own and to prove their market value in some other way, the fact that he subsequently resells the goods will not in any way affect his recovery of the difference between the contract price and the market value at the time of breach. If, for instance, the market value at the time of his eventual resale should be higher than the contract price, he would still be entitled to the difference between the market value at the time of breach and the contract price.^* — -Resale to Demonstrate Damage. — ^If he does choose to make a resale, and if he makes it within a reasonable time after breach, at the nearest available market, by public auction, and after actual or constructive notice to the buyer, so that the latter may protect himself by being present, then the amount realized at such sale will be accepted by the courts as conclusive evidence of the market value.^* 7 — Warren v. Buckminster, 24 S. W. 188; Bridgeford v. Crocker, N. H. 336. 60 N. Y. 627. 8— Barrett v, Verdey, 93 Ga. 12— Davis Sulphur Ore Co. v. 526; Hewes v. Germain Fruit Co., Atlantic Co., 109 Ga. 607; Hewes 106 Cal. 441; Kellog v. Frolich, v. Germain Fruit Co., 106 Cal. 441; 139 Mich. 612. Carriage Co. v. Gilmore, 123 Mo. 9— Gardner v. Deeds, 116 Tenn. Ap. 19; Fox v. Woods, 96 N. Y. 128, 4 L. R. A. (n. s.) 740. S. 117, even though the resale 10 — Heiser v. Mears, 120 N. C. was private instead of at public 443. auction; Van Brocklen v. Smeal- 11— Sour Lake Townsite Co. v. lie, 140 N. Y. 70, private sale; Deutser Furniture Co., (Tex.) 94 Pollen v. LeRoy, 30 N. Y. 549, THE SELLER'S RIGHTS 91 But even if the seller does not give notice of resale, or otherwise observe all the strict requirements, the price actually secured by the resale is not absolutely rejected as evidence. Only its weight is aifected. Inasmuch as the seller does not need to make a resale at all in order to fix his damages, if he can furnish other evidence', it naturally follows that he can resell or otherwise dispose of his property in any way he, as owner, sees fit. The only limitation upon this right of disposal is the obviously fitting one that the amount secured by the resale will not be accepted as conclusive evidence of the real market value unless the resale was made under such circum- stances as to indicate that the amount received was in fact the market value. As one court put it, ''The sale, in such circumstances, is but a method, as before indi- cated, of enforcing a right to damages for breach of con- tract, and of making evidence of the precise amount of such damages. * * * If he sues for his damages without selling the property or without selling the same with proper regard to the rights of the executory vendee, he takes upon himself the burden of establishing the fair market value of the goods at the time of the breach. So it is said that notice to the vendee of the vendor's inten- tion to make the sale, and the sale, with proper regard to the interests of the former, merely create definite and conclusive evidence of such market value. ' '^' The courts, therefore, do not refuse to receive the results of a resale as evidence of the market value merely because it was made mthout notice, or was a private sale instead of a public one, or was in any respect not conventional. They receive it in evidence, just as any other evidence is without notice to buyer; Wrigley reasonable time; Black River V. Cornelius, 162 111. 92, without Lumber Co. v. Warner, 93 Mo. 374, notice; Aclcerman v. Rubens, 167 accd.; Magnes v. Sioux City Co., N. Y. 405, although seller himself 14 Colo. Ap. 219; McDonald Cot- was purchaser at public sale; ton Co. Mayo, — Miss. — , 38 Nelson v. Hirsch & Sons Co., 102 So. 372. Mo. Ap. 498, resale made some 13 — Pratt v. S. Freeman & Sons time after breach, but within a Co., 115 Wis. 648. 92 THE LAW OF SALES received, and subject to the general rules of materiality, relevancy, competency, etc.^* But it will not be received as conclusive evidence unless it appears to have been a fair demonstration, from the point of view of both par- ties, of the real market value.^^* It must be borne in mind that the foregoing discussion is applied to resales to fix the market value in cases where title is still in the seller. When title has passed from the seller, and he resells, as agent of the buyer, to enforce his seller's lien, other principles apply." Recovery of Purchase Price. — A seller who still retains title and possession is hmited to this action for damages for breach of contract. He can not sue to recover the amount of the purchase price, as such." Various writers 14 — Gehl V. Milwaukee Produce Co., 105 Wis. 573; Carriage Co. V. Gilmore, 123 Mo. Ap. 19; Anderson v. Frank, 45 Mo. Ap. 482; Moore v. Potter, 155 N. Y. 481; A resale made after suit commenced will not be re- ceived in evidence, Hardwick v. Can Co., 113 Tenn. 657;Brownlee V. Bolton, 44 Mich. 218; Pollen v. LeRoy, 30 N. Y. 549; Am. Hide Co. V. Chalkley, 101 Va. 458, notice of Intent to resale is mere evidence relating to market value. Some distinction is made be- tween notice of intention to sell and notice of time and place. Some cases hold specifically that even the former is not necessary, Leeper v. Schroeder, 24 Colo. Ap. 164; Wallace v. Coons, 48 Ind. Ap. 511; Clore v. Robinson, 18 Ky. L. R. 851; Kellogg v. Frolich, 139 Mich. 312; and it is generally held that the buyer's refusal puts him on notice that a resale may be made, Wrigley v. Cornelius, 162 ♦See Uniform Sales Act, Section 111. 92; Ullman v. Kent, 60 111. 271; McDonald Cotton Co. v. Mayo, — Miss. — , 38 So. 372. But other cases require notice of an intention to resell at least, Winslow V. Harriman Co., 42 S. W. 698, semhle, as title had passed; Pillsbury Flour Co. v. Walsh, 60 Ind. Ap. 76, 110 N. E. 96; Davis Sulphur Ore Co. v. Atlanta Co., 109 Ga. 607. 15 — Case v. Simonds, 7 N. Y. Supp. 253; Bigelow v. Legg, 102 N. Y. 652. 16— See p. 129. 17 — Although, as noted above, the damages may happen to equal the purchase price. The retention of title should not be confused with retention of pos- session. As we have already seen, title may be transferred, and usually is, before possession is passed and even though the buyer has no right to possession till pay- ment. In such case the buyer's refusal to accept the possession of 64, (1), (2), (3), (4). THE SELLER'S RIGHTS 93 have pointed out that while an action will lie to recover damages for breach of a contract, even though the con- sideration for the contract be only a reciprocal promise, an action in debt for a specific sum owing to the plaintiff from the defendant can not be maintained unless the defendant has received something more than a mere promise from the plaintiff." Until the seller has passed the title to the buyer, therefore, the latter has received only the seller's promise and the seller is not the owner of the sum agreed to be paid. The broad rule is indubi- tably that a seller who has not in fact passed the title to the buyer can not sue for any sum which the buyer agreed to pay for the title, but only for damages resulting from the buyer's refusal to perform his promise. One position of the courts appears to be that no debt on the buyer's part is implied by law in return for the seller's mere promise without other quid pro quo; that the seller does not become the owner of the purchase price and the buyer does not hold it as a debt due the seller until the seller has performed the consideration for which the buyer has promised to pay; that is, until the buyer has become the owner of the property contracted about. Another position is that the buyer has not even undertaken to pay the purchase price until he shall have acquired the title. Mr. Justice Holmes has expressed the latter idea as a dictum, thus :^^ "In an ordinary contract of sale the payment and the transfer of the goods are to be con- current acts, and if the buyer refuses to accept the goods, even wrongfully, he can not be sued for the price, because the event on which he undertook to pay the price has not happened; and although the fact that it has not hap- the goods will not necessarily af- of this whole matter see the feet the title, which is already in article in 17 Mich. L. R. 283. him. The seller is entitled to the 18— Ames, 8 Harvard L. R. 252; purchase price regardless of the Street, Foundation of Legal Li- buyer's refusal to accept posses- ability. Vol. II, ch. 11. sion of the goods themselves. 19 — White v. Solomon, 164 Mass. For a more detailed discussion 516, 94 THE LAW OF SALES pened is due to his own wrong, still he has not promised to pay the price in the present situation, but must be sued for his breach of contract in preventing the event on which the price would be due from coming to pass. The damages for such a breach would necessarily be diminished by the fact that the vendor still had the title to the goods." A seller, therefore, who still has title to the goods is not himself entitled to the purchase price. He can sue only for damages for breach of contract, and in such case his damage is not necessarily the agreed price, but is the difference between that price and the market value of the chattel which he still ovms. Thus in Acme Food Co. V. Older,'^" the defendant had contracted to buy of the plaintiff 6,000 pounds of a certain prepared poultry food. The plaintiff set aside a proper amount for the defendant, but before he could ship it to the defend- ant — which would, under the established rules, have passed title — the defendant repudiated his agreement. The plaintiff shipped nevertheless, but it was held too late then to pass title and although, on defendant's refusal to receive the goods or to pay for them, plaintiff sued for the whole agreed price, his recovery was limited to the difference between the purchase price and the market value.''* 20—64 W. Va. 255, 17 L. R. A. v. Grewer, 83 Me. 407; Jones v. (n. s.) 807. Jennings Bros., 168 Pa. 493; Ridg- 21— Bary v. Quimby, 206 Mass. ley v. Mooney, 16 Ind. Ap. 362; 259; Internatl. Textbook v. Mar- Massman v. Steiger, 79 N. J. L. tin, 166 Mich. 660; Manhattan 442, 75 Atl. 746; Atkinson v. Bell, City R. R. Co. v. Genl. Elec. Co., 8 Barn. & Cr. 277; Girard v. Tag- 226 Fed. 173; Gammage v. Texas, gart, 5 Serg. & R. (Pa.) 19, "The 14 Tex. 413; Funke v. Allen, 54 damages recovered are not the Neb. 407, overruling a contrary price of the goods sold, but a com- dictum in Lincoln Shoe Co. v. Shel- pensation for the disaflBrmance of don, 44 Neb. 249; McCormick Har- the contract — Properly speaking, vesting Co. v. Balfany, 78 Minn, the seller can not recover the price 370, 74 Am. St. 373; Deere v. Gor- — he recovers damages for the man, 9 Kan. App. G7.^>; Singer Mfg. breach of a contract which was en- Co. V. Cheney, 21 Ky. L. R. H.^'jO; tirely executory when it was Moody V. Brown, 34 Me. 107; Tufts broken." THE SELLER'S RIGHTS 95 But even assuming that the seller's mere promise to pass the title does not create a debt on the buyer's part, a question at once arises as to whether after the buyer's refusal to proceed with the contract, the seller can thrust the title upon liim nevertheless, and thus by his o'svn act make himself entitled to the whole sum wliich the buyer has promised for the title. There is much con- flict upon this point, although the best supported rule and the soundest logically is that he can not do so, but is only entitled to recover the damage he has suffered because of the buyer's refusal to take the title. Thus, in the case of Acme Food Co. v. Older, just referred to,^^* the court said of the conflict, '*It is some- times said that the vendor in an executory contract of sale, has, on the refusal of the vendee to accept the property, an election as to whether he Avill treat it as his o^Ti and sue for damages for the breach, or treat it as that of the purchaser and sue for the price. * * * The classification of cases made by the text-writers is, in some instances, inaccurate. The writers seem not to have observed in all instances the distinctions and tests above mentioned. In other words, they have frequently classed cases in which the title had passed, or in wliich there was evidence from which the jury might have found the fact, as cases in which it had not passed. In other instances they have failed to observe that the executory contract had become executed so as to pass the title before any renunciation was made by the vendee. Indeed, there are very few cases in which the seller has been allowed to recover the purchase price when the title to the property had not passed to the buyer. The doc- trine of election, when the title has not passed, seems to have groA\Ti out of an unfortunate and inaccurate inter- pretation of certain cases made by Mr. Sedgwick in his work on Damages."^* 21a — 64 W. Va. 255, 17 L. R. A. ity, the cases cited under note (n. s.) 807. 21. "To allow the seller to re- 22 — See, for supporting autlior- cover the full purchase price of an 96 THE LAW OF SALES The doctrine of election which the court criticizes and denies, whereby the seller may, if he choose, thrust the title upon the buyer against his will, is, however, widely supported by dicta at least. These authorities declare that a seller who has done all that he is obligated to do by the contract may sue for the purchase price even though the buyer has refused to accept the title. They do not indicate with any certainty whether the seller is allowed to sue on the theory that title has passed to the buyer despite his refusal of it, or on the theory that title need not be in the buyer in such cases. The evi- dence seems to point to the former. Very little of this dictum, however, is real authority; that is to say, it is dictum simply. The proposition is usually expressed in some form of the words formu- lated originally in Dustan v. McAndrew,^^ namely, ' ' The vendor of personal property in a suit against the vendee for not taking and paying for the property has the choice ordinarily of either one of three methods to indemnify himself. (1) He may store or retain the property for the vendee, and sue him for the entire purchase price, (2) He may sell the property, acting as the agent for this purpose of the vendee, and recover the difference between the contract price and the price obtained on such resale; or, (3) he may keep the property as his own, and recover the difference between the market price at the time and place of delivery, and the contract price." This statement is widely quoted. As a matter of fact, however, it is seldom the basis of a holding that the seller can sue for the purchase price when the buyer has refused to accept the title. The case in which it was article, and compel the buyer to the buyer. This is against the accept it whether he wants it or well established doctrines of not, is to grant specific perform- courts of equity," from Manhat- ance of a contract for the sale of tan City Ry. v. Genl. Elec. Co., 226 personal property in favor of the Fed. 173. seller, when no such relief could 23 44 n. Y. 72. or would be granted in favor of THE SELLER'S RIGHTS 97 thus first stated was not, itself, a suit for the purchase price; it was only an action for damages for breach of contract. Of the two cases cited as authority, one was an action for damages only, and in the other the title had clearly passed, in accordance with the established rules of presumption, and the buyer's refusal was not a refusal to take the title, but to pay the price. This statement of the three possible remedies in cases where it is wholly unrelated to the decision, because the suit is actually for damages for refusal to accept and not for the pur- chase price, is common.'^* The statement, as wholly extraneous and immaterial matter, is found also in cases in which title has passed according to the established rules, and the buyer's refusal is to receive the goods themselves, not the title, and to pay the price.^^ In other cases the extraneous statement is made that recovery of the purchase price ivould have been allowed, despite the buyer's refusal to accept the title, if some- thing else, such as the seller's failure to make tender, had not been present to prevent it.^^ In some cases, however, the statement is actually the principle of the holding, and a seller has been permitted to recover the purchase price for goods sold although title has been refused by the buyer. In other words, he has been allowed to thrust the title upon the buyer and thus entitle himself to the amount of the price.'^'* 24— Habeler v. Rogers, 131 Fed. 25— Ames v. Moir, 130 HI. 582. 43; Kinkead v. Lynch, 132 Fed. 26 — Moline Scale Co. v. Beed, 52 Iowa 307. 692; Krebs Hop Co. v. Livesley, 59 Ore. 574; Range Co. v. Mercantile Co., 120 Mo. Ap. 438; Van Brock- 27— Crown Vinegar & Spice Co. len V. Smeallie, 140 N. Y. 70; Com- v. Wehrs, 59 Mo. Ap. 493; Walker stock V. Price, 103 111. Ap. 19; v. Nixon, 65 Mo. Ap. 326. Magnes v. Sioux City Co., 14 Colo. Walker Bros. v. Daggett, 115 Ap. 219; Trunkey v. Hedstrom, Miss. 657, 76 So. 569. 131 111. 204, action in damages by Osgood v. Skinner, 211 IH. 229; buyer for seller's failure to de- Resetter v. Reynolds, 160 Ind. 133; liver. McCornrick Co. V. Market, 107 •See Uniform Sales Act, Section 63, (2), (3), 64, (4). 98 THE LAW OF SALES From the foregoing discussion it is apparent that the right of a seller, who has not passed title, to sue for the purchase price in case the buyer refuses to take title is not settled either way. Iowa 340; Busch v. Stromberg- Carlson Co., 226 Fed. 200. It is so provided by statute in some states. The cases of Frisch v. Wells, 200 Mass. 429; Bond v. Bourk, 54 Colo. 51, and Smith v. Aldrich, 180 Mass. 367, seem to have been de- cided on the principle that the seller could treat title as being in the buyer without his consent. The same result might have been reached, however, more harmoni- ously upon the principle of a promise to pay before title passed, as set out below. The cases of Bement v. Smith, 15 Wend. 493 and Shawhan v. Van Nest, 25 O. S. 490, 18 Am. Rep. 313, are often treated as author- ities for the proposition that a seller may sue for the purchase price even though the buyer has refused to accept the title. In the former case (and the latter is sub- stantially the same) plaintiff con- tracted to build for the defendant a sulky according to certain de- scription, for a price of $80. When the work was done and the sulky offered to the defendant he re- fused to receive it. The plaintiff thereupon stored it with a neigh- bor for the defendant, and brought suit for the $80.00. His declara- tion contained a count for work and labor and one for goods sold. The defense was that he was en- titled to damages only. The posi- tion taken by the court was simply that the plaintiff had agreed to make and deliver a certain thing and that he had made it and tend- ered delivery; and that the offer to deliver was tantamount to de- livery. The contract, being an agreement for a thing not yet in existence, was, the court said, in accord with the New York rule, not a contract of sale but one for work and labor. The work and labor having been performed the plaintiff was entitled to the con- tract price. It was not necessary, the court added, for the plaintiff to have declared for goods bar- gained and sold. It is only after this ruling that the court remarks that "where there has been a valid contract of sale, the vendor is en- titled to the full price, whether the vendee receive the goods or not. 1 can not see why the same prin- ciple is not applicable in this case." The quid pro quo which entitled the plaintiff to the debt was thus obviously not the trans- fer of the title, but the actual per- formance of agreed labor. This Interpretation is strengthened by Higgins V. Murray, 73 N. Y. 252. This was a contract to manufac- ture circus tents. When they were completed and offered to defend- ant he refused to accept them. The maker sued to recover the price. (4 Hun. 565) The court held the contract to be one for work and labor (which would, therefore, be a quid pro quo for the debt) and that, consequently, the right to recover the price "did not" depend on where the tech- nical title is, as "in the sale of goods." A I U T^ THE SELLER'S RIGHTS 99 2. Title Retained, but Possession Passed Breach of Contract. — Where the seller has passed the possession to the buyer, even though it is agreed that title shall not pass to the buyer until payment has been made, the seller can still sue for damages for breach of contract in case the buyer fails to pay as agreed. Recovery of Purchase Price. — But in such cases he may also sue the buyer for the agreed price itself, as dis- tinct from suing to recover damages. This is different from the majority rule in cases where the seller has parted with neither possession nor title, as just dis- cussed. The reason for this difference — that is, the rea- son why he can sue for the price despite his retention of title if he has given possession, but can not sue for it if he has not given possession — is not clear. The logical reason would be that the seller in giving possession to the buyer has given him a quid pro quo by whith the debt of the buyer is created. This is the theory which the courts have expressly stated in many instances.^' 28— This is very obvious in the fault of either party. The seller case of Burnley v. Tufts, 66 Miss, sued to recover the unpaid part 48. Tufts had sold to Burnley a of the purchase price and was held soda water apparatus, with the ex- entitled to the money. The court's press stipulation that title should opinion shows that possession was not pass until the price had been the consideration for the buyer's paid, and that if the payment were promise to pay, and not title, and not made at the times the install- that this consideration had been ments were stated to be due the executed. "Burnley," said the seller might retake possession of court, "unconditionally and abso- the apparatus. It does not appear lutely promised to pay a certain that there was any stipulation that sum for the property, the posses- the buyer should have possession sion of which he received from till payment or default, but that Tufts. The fact that the property was obviously the intent of the has been destroyed while in his parties. The apparatus was de- custody and before the time for stroyed by fire, after several pay- the payment of the last note due, ments had been made, while in on payment of which only his the buyer's possession but without right to the legal title of the prop- 100 THE LAW OF SALES In other instances the seller has maintained his suit for the price without the court's having indicated any reason why he could do so. It may be that these courts have felt simply that the promise to pay, itself, created a debt and no executed consideration, or quid pro quo, was necessary. Or it may have been that inasmuch as pos- erty would have occurred does not relieve him of payment of the price agreed upon. He got ex- actly what he contracted for, viz., the possession of the property and the right to acquire an absolute title by payment of the agreed price. The transaction was some- thing more than an executory con- ditional sale. The seller had done all that he was to do except to re- ceive the purchase price; the pur- chaser had received all that he was to receive as the considera- tion of his promise to pay." In White V. Solomon, 164 Mass. 516, the buyer had even refused to take possession of the chattel. Before his refusal, however, the seller had delivered it to an express company for carriage to the buyer. The buyer's contract provided that "in consideration of its delivery for me, freight prepaid, at the ex- press office specified below, I promise to pay the sum of (the purchase price)." The court stated the general rule, that a seller who still retains title, even though only because of the buyer's refusal to accept it, is not entitled to the purchase price but only to damages. But it then went on to decide that "in the case at bar the buyer has said in terms, that al- though the title does not pass by the delivery to the Express Com- pany, if it does not, delivery shall be the whole consideration for an Immediate debt (partly solvendum. in futuro) of the whole value of the manikin, and that the passing of the title shall come as a future advantage to him when he has paid the whole. The words (in the contract) 'in consideration of its delivery' are not accidental nor insignificant. * * * if a man is willing to contract that he shall be liable for the whole value of a chattel before the title passes, there is nothing to prevent his do- ing so, and thereby binding him- self to pay the whole sum. * * * When, as here, all the conditions have been complied with the per- formance of which by the terms of the contract entitles the vendors to the whole sum, if the vendors afterward have not either broken the contract or done any act diminishing the rights given them in express words, the buyer can not by an act of his own repudiat- ing the title gain a right of re- coupment, or otherwise diminish his obligation to pay the whole sum which he has promised." Accd., Natl. Cash Register Co. v. Hill, 136 N. C. 272, 68 L. R. A. 100, similar to White v. Solomon, and quoting it with approval; Tufts V. Griffin, 107 N. C. 47, fol- lowing Tufts V. Burnley; Natl. Cash Register Co. v. Dehn, 139 Mich. 406; Bierce v. Hutchins. 205 U. S. 340; Gray v. Booth, 64 N. Y. App. Div. 231; Amer. Soda Foun- tain Co. V. Vaughn, 69 N. J. L. 582, "The question to be determined THE SELLER'S RIGHTS 101 session was already with the buyer the seller could, by bringing his suit for the price, elect to pass the title to the buyer and that the buyer by not actively rejecting it would be presumed to have consented to it. This passage of title would then, of course, be the necessary executed consideration.*® is: What was the consideration of the note? If the passing of the title to the apparatus was the con- sideration, the defense must pre- vail. If the delivery of the appar- atus, with the right to acquire title, was the consideration the plaintiff must prevail. We think the consideration for the note was the delivery of the apparatus with the right to acquire title." Lan- caster V. Southern Insurance Co., 153 N. C. 285; Harley v. Stanley, 25 Okla. 89; Roach v. Whitfield, 94 Ark. 448; Lavalley v. Ravenna, 78 Vt. 152; Dunlap v. Grote, 2 C. & K. 153; Boyer v. Ausburn, 64 Ga. 271, express agreement to pay In event of loss; Dederick v. Wolfe, 68 Miss. 500; Hollenberg V. Barron, 100 Ark. 403, even though seller had retaken posses- sion at time of the sale; Marion Mfg. Co. v. Buchanon, 118 Tenn. 238; Whitlock v. Auburn Lumber Co., 145 N. C. 120, 12 L. R. A. (n. s.) 1214; Kilmer v. Money- Weight Scale Co., 36 Ind. Ap. 568. 29 — A number of courts, appar- ently considering that the promise to pass title is the real considera- tion, refuse to allow the seller to recover the purchase price after the goods have been destroyed. Bishop V. Minderhout, 128 Ala. 162, predicated upon the principle that the risk of loss follows title; Randle v. Stone, 77 Ga. 501; Swaney v. Alstott, 134 Iowa 63, 7 L. R. A. (n. s.) 1032; Glisson v. Heggie Bros., 105 Ga. 30; Tabbut V. American Insurance Co., 185 Mass. 419, allowing the conditional buyer to recover from an insur- ance company only the value of his interest in the chattel and not the full value. Sloan v. McCarty, 134 Mass. 245. Worden Grocery Co. V. Blanding, 161 Mich. 254, 126 N. W. 212, holding a note given for the price, on a conditional sale, not negotiable because the buyer would not be liable if the seller could not pass title; Fleming v. Sherwood, 24 N. D. 144, 43 L. R. A. (n. s.) 945, idem. Some courts have held that notes given for the contract price in conditional sale agreements are not negotiable because of uncer- tainty in the obligation of pay- ment. This uncertainty of obliga- tion is not, however, clearly predi- cated upon possibility that the buyer might not be liable. Rather, it seems to be based on the fact that the seller may not choose to hold him to payment, but may elect to retake the chattel. So long as the seller has the option, to demand payment on default or to retake the property, it is clear that the obligation to pay is not certain; the buyer may have to pay or not as the seller chooses. These cases do not, therefore, in- dicate that the buyer is not liable for the full purchase price re- gardless of title. Bannister v. Rouse, 44 Mich. 102 THE LAW OF SALES But whatever the reason, it seems clear that a seller who has given possession to the buyer is not restricted to a recovery of damage for the buyer's failure to pay, but can bring suit for the whole agreed price. Titular Actions. — Despite the fact that he can thus sue for the purchase price, and although he has parted with possession, the seller, because he has retained title, is still the owner in practically every respect. So long as the buyer has possession the seller can not prevent title from passing to him on performance of the condi- tion. In this respect the seller's absolutism of owner- ship is limited.^® In other respects the seller is the owner of the prop- erty. He can sell or otherwise transfer his right in the goods to others.^^ He can himself maintain a titular action against a third person.^^ Recovery of Possession. — Being owner, he can retake possession from the buyer or anyone holding under him. If the buyer's contract provides that he shall have pos- session so long as he is not in default, the seller can not retake possession before default.^' But if ,the buyer is in default the seller can retake possession, whether the contract expressly gives him that right or not.^* 428; Chicago Ry. Co. v. Merchants 481, 51 Am. St. 37; see other Bank, 136 U. S. 268; but cf. Third authorities cited in re the rights Natl. Bk. V. Armstrong, 25 Minn of third persons. 530; Iron Wks. v. Paddock, 37 33— Post, p. 176. Kan. 510. 34— Wiggins v. Snow, 89 Mich. 30 — See discussion of Buyer's 476, even without such provision Rights, post, p. 176. in the contract; Ryan v. Wayson, 31— Everett v. Hale, 67 Me. 497, 108 Mich. 519, idem; Tufts v. payments by buyer to the seller D'Arcambal, 85 Mich. 185, 24 Am. are ineffective after notice that St. 79; Hegler v. Eddy, 53 Cal. seller has transferred the title to 579; Gerow v. Castello, 11 Colo, another; BumeU v. Marvin, 44 Vt. 560, 7 Am. St. 260; Smith v. Guf- 277, transferee can maintain a ford, 36 Fla. 481, 51 Am. St. 37, trover action; Foundry Co. V. Pas- 18 So. 717; Perkins v. Grobben, cagoula Co., 72 Miss. 608. 116 Mich. 172; Turk v. Carnahan, 32— Smith v. Gufford, 36 Fla. 25 Ind. Ap. 125; Crompton V. THE SELLER'S RIGHTS 103 There is strong authority that the seller may even use such force as is necessary to retake possession, subject, however, to criminal liability for breach of the peace. There is conflict in this regard, however.®^ Furthermore, where the contract provides, either expressly or by implication, that the seller may retake possession in case of default, he may do so without first giving back what he has received from the buyer.^^ After Suit for the Purchase Price. — This ris:ht of the seller to retake possession if the conditional buyer makes default may, or may not, be affected by his having Beach, 62 Conn. 25; Segrist v. Crabtree, 131 U. S. 287; Seanor V. McLaughin, 165 Pa. 150; Walsh V. Taylor, 39 Md. 598; Palmer v. Kelly, 56 N. Y. 637, buyer had failed to keep property insured as contract provided. 35— W. T. Walker Furniture Co. V. Dyson, 32 App. D. C. 606, 19 L. R. A. (n. s.) 606, annotated. 36— Tufts V. D'Arcambal, 85 Mich. 185, 24 Am. St. 79; Perkins V. Grobben, 116 Mich. 172; Cromp- ton V. Beach, 62 Conn. 25; Lippin- cott V. Rich, 22 Utah, 195; Duke V. Shackleford, 56 Miss. 552; Pfeifer v. Norman, 22 N. D. 168, 38 L. R. A. (n. s.) 891; Raymond Co. V. Kahn, 124 Minn. 426; Fair- banks V. Malloy, 16 111. Ap. 277, because the retaking is not strictly a rescission. Fleck v. Warner, 25 Kan. 492; Hawkins v. Hersey, 86 Me. 394, even in an ac- tion for trover. Even in an action for conversion by a third person, in privity with the buyer, the de- fendant can not set off payments made and the seller is entitled to the full value of the chattel, Lorain Steel Co. v. Norfolk, etc. Ry. Co., 187 Mass. 500. Contra, Hays v. Jordan, 85 Ga. 741. Seller need not give up notes received for future payments, Kirby v. Tompkins, 48 Ark. 273; Hoe V. Rex Mfg. Co., 205 Mass. 214. This right to retake possession without returning what the buyer has paid has been changed by statute in some states. By thus retaking possession without refunding money paid the seller does not necessarily put an end to the contract. Tufts v. D'Arcambal, 85 Mich. 185, 24 Am. St. 79. If the seller does intend by his retaking of possession to rescind the contract, it appears that the buyer may then sue to recover the money he has paid. Miller v. Steen, 30 Cal. 402, "If the con- tract has been rescinded, the plaintiffs (buyers) are entitled to recover the money paid. If the contract was not rescinded, the vendees became entitled to the possession upon payment of the full amount due." See further, post, p. 103. 104 THE LAW OF SALES first brought suit for tlie purchase price. The courts are anything but harmonious in regard to it. If the right to sue for the purchase price is itself based, as we have seen that many courts do base it, on the assumption that possession until default is the quid pro quo for the promise to pay the price, and that title was not to pass till after payment, then title should not pass merely because a suit for the price has been started, or a judgment secured. Title, then, being still in the seller and the condition on which the buyer's possession depends having been broken, there is no logical reason why the seller should not be allowed to retake possession. Many courts do hold, for one reason or another, that the seller is not precluded from retaking possession merely because he has started a suit, or even secured a judg- ment, for the purchase price.*'' Courts which put the seller 's right to sue for the price, as such, instead of for damages, on the theory that he has elected to pass title to the buyer, do not, as a rule, allow the seller to retake possession after such a suit, even though the judgment has not been satisfied. Logi- cally, having passed title, the seller has lost his right to repossession.*^ 37— Matthews v. Lucia, 55 Vt. Co., 244 Fed. 730, holding that 308; Fuller v. Byrne, 102 Mich, right to possession had not been 461; Canadian Co. v. Macgurn, lost by prior action in equity for 119 Mich. 533; Campbell, etc. Co. declaration of a lien in seller's V. Rockaway Co., 56 N. J. L. 676, favor; Ratchford v. Cuyahoga, etc. distinguishing Heller v. Elliott, 44 Co., 145 N. Y. S. 83, seller not pre- N. J. L. 467, on the point that in eluded by suit for part of price the latter case the seller had from setting up title as against a levied upon the goods, under his mortgagee of the buyer; Hobart judgment, as being the buyer's Elec. Co. v. Rooder, 121 N. Y. S. property; Forbes Co. v. Wilson, 274, suit for part of price does not 144 Ala. 586, overruling a contrary preclude action in conversion dictum In Davis v. Millings, 141 against buyer. Ala. 378; Thomason v. Lewis, 103 38— Turk v. Carnahan, 25 Ind. Ala. 426; Rossiter v. Merriman, App. 125; Crompton v. Beach, 62 80 Kan. 738, analogy of suit on a Conn. 25; Frisch v. Ells, 200 Mass. note as not releasing a mortgage. 429; Bailey v. Hervey, 135 Mass. Cf. Meyer v. Pacific Machinery 172; Francis v. Bohart, — Ore. THE SELLER'S RIGHTS 105 In other cases repossession by the seller, after suit for the price, is denied without statement of any definite theory.*® A way of escape for the seller from this proposition that if he brings suit for the price he forfeits his right to retake possession even though the judgment is not sat- isfied, is suggested in Fuller v. Byrne.*'' The contract there provided that title should not pass to the buyer until pajTuent or until satisfaction of any judgment recov- ered. The court held that suit for the price and an unsat- isfied judgment did not preclude the seller from retaking possession.*^ The decision must mean that this court considers the passing of title to be an effect of the suit, but not a condition precedent to suit for the price. A suit to recover installments due does not have the same effect as a suit to recover the whole price, and the seller does not, in most jurisdictions, lose his right to retake possession because of a suit to recover install- ments.*^ L. R. A. 1916 A 922, "An action Mchts. etc. Bk. v. Thomas, 62 Tex. for the purchase price of the prop- 237. erty is an action on the contract, 40 — 102 Mich. 461. and necessarily proceeds upon the ^^_^^ ^^^ ^^3^^^^ ^^ ^^^^ ^ theory that the title has been provision, an unsatisfied judgment waived by the seller and vested ^^^ ^^^ ^^^^^ ^^3 ^^1^ ^^ preclude in the buyer"; Parke Co. v. White repossession by the seller in Bui- River Co., 101 Cal. 37, suit is "a ^^^ ^ ^j,^^^^^^ ^^ ^^^^ 296. ratification of the sale"; Holt 42_Haynes v. Temple, 198 Mfg. Co. V. Ewing, 109 Cal. 353, ^^^^_ ^^^. ^^^^^^^ ^^.^ ^.^^ an "election to treat the transac- ^^.^^^^ ^ ^^j^^^ 200 Mass. 429, 23 tion as an absolute sale." ^ ^ ^ ^^ ^ ^ ^44^ ^^ ^^^ ^^^^^ 39 — Seanor v. McLaughlin, 165 that suit for the whole price does Pa. 150; Manson v. Dayton, 153 end the right of repossession. Fed. 258; Ramey v. Smith, 56 Ratchfield v. Cayuga, etc. Co., 145 Wash. 604; Chase v. Kelly, 125 N. Y. S. 83, affirmed 217 N. Y. Minn. 317, dictum; Bell v. Old, 88 565; Silverstein v. Kohler, 58 Cal. Ark. 99; Elwood State Bank v. Dec. 138. 183 Pac. 451. Mock, 40 Ind. Ap. 685; Button v. Contra. Eilers Music House v. Trader, 75 Mich. 295; Dowagiac Douglass, 90 Wash. 683, L. R. A. Mfg. Co. V. Mahon, 13 N. D. 516; 1916 E. 613. 106 THE LAW OF SALES After Other Acts. — Even in jurisdictions where suit for the price is not held to indicate a passing of title to the buyer, the seller's intent to treat it as having passed may be shown in other ways, as by attaching the goods, or levjdng upon them as the property of the buyer. When he has so elected to treat them as the property of the buyer he can not afterward repudiate that election and retake possession.*^ Suit for Price After Retaking Possession. — If the seller, instead of suing for the price, chooses to retake possession, the cases are well agreed that he loses his right to sue for the price. The theory on which this for- feiture of the price is based is not so well settled, how- ever. A number of courts put it on the ground that the seller's right to retake the goods is by way of rescinding the contract. Accordingly, if he has so retaken posses- sion, he must have rescinded and there is in consequence no contract on which he can bring a suit. They apply this even when the suit is on a promissory note given for the price.** This theory is hardly consistent with the rule 43 — Elson V. Moore, 11 Cal. Ap. title in case of non-payment or to 377, suit and attachment; HeUer affirm it in the buyer. In such V. Elliott, 44 N. J. L. 467, case, it was held, suit for the price levy; Ramey v. Smith, 56 Wash, was an affirmance of the buyer's 604, levy; Orcutt v. Ricken- existing but voidable title. brodt, 59 N. Y. S. 1008, accept- 44— Glisson v. Heggie Bros., 105 ance of a promissory note as pay- Ga. 30. In Turk v. Carnahan, 25 ment of the price; Fuller v. Ind. Ap. 125, the court expresses Eames, 108 Ala. 464, attachment; the matter thus:— "The contract Albright v. Meredith, 58 O. S. 194, sued on is a conditional one. The levy. condition is that the title to the Other cases may be distin- property sold, as described in the gulshed on various grounds. Thus note, shall remain in the vendors Moline Plow Co. v. Rodgers, 53 (appellees) until the purchase Kan. 743, 37 Pac. Ill, appears to money is fully paid. The title to be a case in point. As a matter the property never passed from of fact the court held, as regards appellees, and therefore never part of the goods in controversy, vested in appellant. * ♦ • Upon that the title to the goods had default of the vendee to pay, as passed by mutual agreement with provided in the contract, the ven- an option in the seller to retake dor has two remedies: 1. He may THE SELLER'S RIGHTS 107 that the seller can retake without first giving back what he has received, as he should do were it a true rescission. Other courts follow a theory harmonious with the idea that possession by the buyer is the real consideration for his promise to pay. They hold that the seller can not recover the price after he has retaken the goods because through termination of the buyer's possession there has occurred a failure of consideration.*^ Still other courts say, mthout any express reason, that the remedies are inconsistent and retaking precludes suit for the price.*"^ Underlying Theory. — From all this conflict of author- ity no one, clear cut dispute of principle, much less any established principle, can be deduced. The decisions are, many of them, too vague for it to be sho^vn conclusively that those on the one side hold to one definite, clear retake the property, which is a disaffirmance of the sale; or 2. He may treat the sale as absolute and bring an action for the price. The undisputed facts in this case show that the appellees elected to disaffirm the contract, and took possession of the property de- scribed in the note. Having as- serted their right to disaffirm the contract, and having taken posses- sion of the property under such disaffirmance, appellees thereby abandoned their right to treat the sale as absolute and sue for the price. The law will not permit a vendor of property who retains the legal title in himself to take possession of it upon default of payment, sell, or otherwise dis- pose of it, and then sue the vendee for the balance of the purchase price." 45 — McBryan v. Universal Ele- vator Co., 130 Mich. Ill; Perkins V. Grobben, 116 Mich. 172; Minne- sota Harvester Works v. Holly, 27 Minn. 495; Aultman & Co. v. Olson, 43 Minn. 409; Keystone Mfg. Co., 74 Minn. 115; Earle v. Robinson, 36 N. Y. S. 176. But, in accord with this theory, if the buyer has had possession for the agreed time before it was taken from him, the seller can recover. Equitable etc. Co. v. Pot- ter, 48 N. Y. S. 647. 46 — Crompton v. Beach, 62 Conn. 25; Loomis v. Bragg, 50 Conn. 228; Seanor v. McLaughlin. 165 Pa. 150; Edmead v. Anderson, 103 N. Y. S. 369; Campbell Press Co. V. Henkle, 19 D. C. 95; Green V. Sinker, Davis & Co., 135 Ind. 434. Contra. Dederick v. Wolfe, 68 Miss. 500, on theory that retaking was not a rescission, but merely a taking of possession by way of security; McDaniel v. Chiara- monte, 61 Ore. 403, idem. 108 THE LAW OF SALES theory and those on the other side believe positively in a converse of that theory. But from a general survey of the whole there is little doubt that the division is • caused, however vague the motivating idea may be in any particular case, by disagreement as to whether the transfer of title is the consideration for the promise to pay, even though the transfer is to be made only after pajnuent, or whether something else, such as the possession of the property, is the consideration for the price and the transfer of title merely a condition sub- sequent. If possession, for instance, is the consideration, the seller ought logically, when he has executed that consideration, to be permitted to sue for the price, whether he has passed title, or can pass it, or not. Correlatively, if he has sued for the price, such suit should not necessarily indicate that he thereby passed title, and he ought still to be allowed to retake posses- sion. On the other hand, if title is the consideration for the price, he could not logically sue for the price without having passed title, with or without the buyer's assent. Having so sued, and thus shown an election to treat title as passed, he could not logically be there- after allowed to retake possession by asserting title in himself. The real conflict appears to be, therefore, whether, in the absence of any clear expression, the courts will treat the possession or the title as the real consideration and will assume the buyer's agreement to be a promise to pay in consideration of the possession, mth passing of title as a condition subsequent, or a promise to pay in consideration of the title, with possession as a condition precedent. Some, at least, of the apparent conflict within jurisdic- tions may be due to the fact that in a particular case there is enough evidence of a 7~eal intent to overcome the cus- tomary judicial presumption.*"' 47— Thus in Massachusetts it has been held that a conditional THE SELLER'S RIGHTS 109 3. Possession Retained, but Title Passed Recovery of Price.— A seller who has parted with title is himself entitled to the purchase price, and may sue for it, in an action of debt or indebitatus assumpsit, accordingly.* This action can not be maintained, how- ever, if the seller has given credit, until the period of credit has expired. Until that time the seller is not entitled to payment of the sum, as a debt, and there is no breach of contract on the part of the buyer in failing to pay it. Even the refusal of the buyer to accept the goods as tendered, or his becoming insolvent, obviously can not advance the date at which the seller Y\^as to be- come entitled to the purchase price and he can not there- fore sue for it before that time.*^ But if the credit was obtained by fraud it is sometimes held that the seller is allowed to rescind so much of the contract as appertains to the credit, while treating that part which pertains particularly to the transfer of title and the price as still in force. In such case he may sue for the price just as though no credit had been seller who had brought suit for rier was expressly stated to be the the purchase price could not there- consideration. Compare also, Hel- after retake possession, Bailey v. ler v. Elliott, 44 N. J. L. 467 and Hervey, 135 Mass. 172, and that Campbell etc. Co. v. Rockaway such a seller could not recover Co., 56 N. J. L. 676; Holt Mfg. Co. the purchase price after destrue- v. Ewing, 109 Cal. 353, and Matte- tion of the property, Tobbut v. son v. Equitable Mining Co., 143 Amer. Ins. Co., 185 Mass. 419. Yet Cal. 436; Forbes Co. v. Wilson, the same court has held that a 144 Ala. 586; Alexander v. Mobile conditional seller could recover Auto Co., 200 Ala. 586, 76 So. 944. the full amount of the purchase 48 — Tatum v. Ackerman, 148 price without having passed title, Cal. 357, 113 Am. St. 276; Brady White v. Solomon, 164 Mass. 516. v. Isler, 9 Lea (Tenn.) 356; Brad- This may well be explained on the ford v. Marbury, 12 Ala. 520; ground that the courts of Massa- Keller v. Strasburger, 90 N. Y. chusetts will not presume that in 379; Girard v. Taggart, 5 Serge & an ordinary conditional sale the Rawle (Pa.) 19; Button v. Solo- possession is the consideration monson, 3 Bos. & Pul. 582; Mus- for the price, but that in White v. sen v. Price, 4 East. 147. Solomon the delivery to the car- *See Uniform Sales Act, Section 63, (1). 110 THE LAW OF SALES given.*^ Other courts, however, more logically, hold that the matter of credit is an intrinsic part of the contract of sale and that the contract must be rescinded as a whole, or not at all, and that therefore the seller can not sue for the purchase price before the period of credit has expired, even in cases of fraud.^'' Breach of Contract. — Of course, if the buyer refuses to pay the price when due, the seller can, if he chooses, sue to recover damages for breach of the contract instead of suing in debt for the price itself. But where title has already passed and the buyer merely refuses to receive the possession, the damage to the seller from that refusal itself is slight, if any- thing. This refusal, however, may and presumably does indicate an intent on the buyer's part not to pay when payment becomes due. It may amount, therefore, to an anticipatory breach. The buyer can not be said to have broken his promise to pay, since the time for pay- ment has not arrived. He may be said, however, to have impliedly announced that he will not pay when the time does come ; in other words, to have committed an antici- patory breach of the contract. If this is the fair impli- cation, he may be sued at once for damages resulting from his breach, in most jurisdictions.®** 49 — Heillbronn v. Herzog, 165 might at once sue for damages for N. Y. 98; Willson v. Force, 6 breach of the agreement to give Johns. (N. Y.) 110; Joffray v. "security," i. e., the notes. It was Wolf, 4 Okla. 303. further held that the damage from 50 — Jones v. Brown, 167 Pa. 395. thi^ failure to give the notes was 51 — Nichols V. Scranton Steel "the whole damages equal to the Co., 137 N. Y. 471; Engesett v. value of the security had it been McGilvray, 63 111. Ap. 461; in given, prima facie the amount of Orr V. Leathers, 27 Ind. Ap. 572, the sum secured." (Author's it was held that on the buyer's re- italics). Citing 2 Sutherland on fusal to give promissory notes as Damages (2d Ed.) sec. 644. agreed, the seller need not wait Cook v. Stevenson, 30 Mich. 242; for the expiration of the credit but Hanna v. Mills, 21 Wend. (N. Y.) *See Uniform Sales Act, Section 51. THE SELLER'S RIGHTS 111 Seller's Lien. — When the title has passed to the buyer, but the seller has retained possession, he, the seller, has a right, unless he has given credit to the buyer, to keep that possession till payment. This right to retain possession till payment is called a seller's, or vendor's, lien}^* It has nothing to do with the right of an owner to retain possession of his own goods. It is independent of title. Indeed a seller's lien exists only when title has passed out of the seller. Its ex- istence ''always presupposes that title to the goods has passed to the vendee; since it would be an incongruous conception that a vendor might have a lien on his own goods. "^* The seller's right of continued possession, until pay- ment, is effective even against a purchaser for value from the original buyer.^* 90; Manufacturing Co. v. Cereal Co., 124 Iowa 737. As analogous issues in cases not involving sales, Wolf v. Marsh, 54 Cal. 228; Hosmer v. Wilson, 7 Mich. 294; Chapman v. Kansas City R. R., 146 Mo. 481; Burtis V. Thompson, 42 N. Y. 246; Frost V. Knight, L. R. 7 Ex. Ill; Inch- bold V. Western etc. Co., 17 C. B. (n. s.) 733; Ford v. Tiley, 6 B. & Co. 325. Contra, Daniels v. Newton, 114 Mass. 530; King v. Waterman, 55 Neb. 324. 52 — Conrad v. Fisher, 37 Mo. Ap. 353, 382; Burke v. Dunn, 117 Mich. 430; Hoskins v. Warren, 115 Mass. 514; Perrine v. Barnard, 142 Ind. 448; Sparger v. Huffman, 15 Ky. L. R. 848; Cragin v. O'Con- nell, 63 N. Y. 1071. 53 — Conrad v. Fisher, 37 Mo. Ap. 352, 8 L. R. A. 147; Perrine V. Barnard, 142 Ind. 448; Arnold V. Delano, 4 Cush. (Mass.) 33, *See Uniform Sales Act, Section "The term lien Imports, that by the contract of sale, and a formal symbolical or constructive deliv- ery, the property has vested in the vendee; because no man can have a lien on his own goods. The very definition of a lien is, a right to hold goods, the property of an- other in security for some debt, duty or other obligation. If the holder is the owner the right to retain is a right incident to the right of property * * * ." This is not, however, always kept clearly in mind by some courts, with a resultant confusion of idea. See Post, p. 114. 54 — McElwee v. Metropolitan Lumber Co., 69 Fed. 302; Robinson V. Morgan, 65 Vt. 37; Vogelsang's Admr. v. Fisher, 128 Mo. 386; Ware River R. R. Co. v. Vibbard, 114 Mass. 447; R. R. Co. v. Plant, 45 Mo. 517; Perrine v. Barnard, 142 Ind. 448; Dixon v. Yates, 5 B. & Ad. 313. 54, (1). 112 THE LAW OF SALES Effect of Loss of Possession. — There is no seller's lien, however, unless the title has passed to the buyer without a transfer of possession. That is to say, the right to keep possession of the goods until payment depends upon the fact that the seller has already stead- fastly retained possession despite the change of title. By delivering actual possession of the goods to the buyer the seller loses his right to any further possession, whether he has been paid or not.*^ But delivery of mere constructive possession to the buyer does not affect the seller's lien. If he has retained the actual possession, his right to continue in possession is not impaired. In Woodland Co. v. Mendenhall,^^ for instance, the seller sold copper wire to the defendant and strung the wire on the defendant's poles. The seller Company, however, was operating the defendant 's railroad at the time and therefore had physical posses- sion of the defendant's poles and other property. The court accordingly said that while constructive possession of the wire might have passed to the buyer by virtue of attachment to its poles, yet as the poles themselves were in the actual possession of the seller, the actual posses- sion of the wire had also been retained by the seller and therefore its seller's lien still existed. In another case" the plaintiff had sold to one Dewey a number of barrels of whiskey then stored in a bonded warehouse. As part of the contract plaintiff was obliged to ship the whiskey to the buyer when and as ordered. Notice of the sale was given to the warehouse man and he 55 — Haskins v. Warren, 115 the lien has attached, he is de- Mass. 514; Sparger v. Huffman, vested of the lien." 15 Ky. L. R. 848; Meyers v. Statutes in some states provide McAllister, 94 Minn. 510; Pickett for certain rights of repossession V. Bullock, 52 N. H. 254, "Posses- by the seller even after he has sion is not only essential to the transferred possession. See Jones, creation, but also to the continu- Liens, ance of a lien; and when the party 56 — 82 Minn. 483. vohintarily parts with the posses- 57 — Mohr v. Boston & Albany Blon of the property upon which R. R. Co., 106 Mass. 67. THE SELLER'S RIGHTS 113 thereupon certified that he held the whiskey for the buyer, Dewey, as owner. The court held that even under those circumstances Dewey had acquired only a con- structive possession and not an actual one.^®* Whether or not there has been an actual delivery of possession to the buyer, as distinct from a merely 'Con- structive one, has been said to be a question of fact for the jury if the facts from which it is to be determined are themselves uncertain. ^^ The great majority of courts, however, treat it, without comment, as a question to be decided by the court itself. Delivery to Carrier. — Since a carrier to whom goods have been given for transportation is treated as the agent of the buyer in so many ways, such as to assent to the passing of title and as to make the buyer liable for goods sold and delivered, it is a logical assumption that by delivery to a carrier, without express restric- tion, the seller loses hisi lien. The seller would have parted with possession, not merely constructively, but actually, to an agent of the buyer. The case would rarely arise in practice, however. The fact that goods were 58 — The seller's lien is not lost dee, it is only because of the mani- "by any species of constructive fest intention of the vendor utter- delivery, so long as he (the seller) ly to abandon all claim and right retains the actual custody of the of possession, taken in connection goods, either by himself, or by with the difficulty or impossibility his own agent or servant", Con- of making an actual and manual rad V. Fisher, 37 Mo. Ap. 352, 8 transfer, that such a delivery is L. R. A. 147, citing many author- considered as sufficient to annul Ities. McElwee v. Metropolitan the lien of the vendor." Miles v. Lumber Co., 69 Fed. 302; Arnold Gorton, 2 C. & M. 504, goods stored V. Delano, 4 Cush. (Mass.) 33; by seller at buyer's cost. Vogelsang's Admr. v. Fisher, 128 Delivery of negotiable ware- Mo. 386; Thompson v. Baltimore house receipts so far passes pos- & Ohio R. R., 28 Md. 396, 407, "In session to the buyer as to preclude all cases of symbolical delivery, a lien in the seller, Rummel v. which is the only species of con- Blanchard, 216 N. Y. 348. structive delivery sufficient to 59 — Conrad v. Fisher, 37 Mo. give a final possession to the ven- Ap. 352. ♦See Uniform Sales Act, Section 54, (2). 114 THE LAW OF SALES shipped without payment would indicate that credit had been given. This credit would be a defense to a claim of lien, without raising any issue of possession. On the other hand, if the credit had been lost by insolvency, a right of s.toppage in transitu would exist and it would be unnecessary to assert any claim of a lien. Of course, if the goods have been delivered to a carrier with directions not to give possession to the buyer until pajTnent — the ordinary ''C. 0. D." shipment — the lien would not be lost, as the carrier would clearly not be the buyer's agent for possession. Loss of Possession Due to Fraud. — It is said by some writers upon the subject that a seller's lien is not lost, as between the parties at least, even though the buyer has obtained possession of the goods, if the possession was secured by fraud. This appears reasonable, but the cases cited to support these statements do not actually bear them out. In each case there is a confusion between the ideas of title and of seller's lien, and it appears that the seller's right to regain possession was based upon the retention of title till payment, rather than upon a true lien.®°* Loss of Possession for a Special Purpose. — ^It is also said that the lien is not lost by mere delivery of pos- session to the buyer for some specific purpose, such as 60 — Jones on Liens, sec. 830; strongly implied that fiiZe had not Williston on Sales, sec. 511; passed from the seller, the court Meechem Sales, sec. 1488; Wool- saying, "It is very clear that until sey V. Axton & Son, 192 Pa. 526; the (buyer) had the right of pos- Bush V. Bender, 113 Pa. 94. In session it could not communicate McGill V. Chilhowee Lumber Co., a title to any purchaser." How- Ill Tenn. 552, 82 S. W. 210, it is ever, as the court had held, in an- said specifically that the seller's other connection, that the risk of lien was not lost merely because loss was not vipon the seller, as the buyer had wrongfully dispos- owner, this case does support the eessed him of the property, proposition. Almost in the next breath it is ♦See Uniform Sales Act, Section 56, (1). THE SELLER'S RIGHTS 115 inspection. But here a^jain the cases are confused in their stated ideas of a lien, and indicate that the seller's light to repossession is really based upon the fact that he retained title until payment. And as we have already seen, title, if retained till payment, is in no Avise affected by delivery of posession to the buyer. It is therefore at least somewhat doubtful if a seller who has really parted mth title has any right to a seller's Uen after he has deliberately parted with possession to the buyer, for any purpose.^^ Loss of Possession of Part of the Goods. — Delivery of possession of part of the goods terminates the lien upon that part, but the lien on the part retained is valid to the extent of the entire purchase price due. Again, how- ever, the authority is scanty .^^* Effect of Giving Credit. — The seller's lien is predi- cated upon the assumption that, though the parties intended to pass title at once, they also intended that delivery of possession should be concurrent with pay- ment. Since the lien thus depends on intention, there will be no lien if the parties appear to have intended that 62 — Palmer v. Hand, 13 Johns, lien upon the property." Morris (N. Y.) 432, "Where no credit is v, Rexford, 18 N. Y. 555; Ames v. stipulated for, the vendor has a Moir, 130 111. 582; Haskins v. War- lien, so that if the goods be ac- ren, 115 Mass. 514; Lamb v. Utley, tually delivered to the vendee, 146 Mich. 654; Caldwell v. Tutt, and upon demand then made he 10 Lea (Tenn.) 258. refuses to pay, the property is not 63-Williams v. Moore, 5 N. H. changed, and the vendor may law- 335; Wanamaker v. Yerkes, 70 Pa. fully take the goods as his own, ^43^ confuses title and lien; Mc- because the delivery was condi- ^^^^^ ^ Metropolitan Lumber Co., tional." Russell V. Minor, 22 Wend, gg p^^ 3^2 . McFarland v. Wheel- (N. Y.) 662, "the delivery is con- ^^^ 36 Wend. (N. Y.) 467; Dixon v. ditional and does not become com- Yates, 5 B. & Ad. 313, 341; Bolton plete so as to change the right of vL&YRRCoLRlCP property until the condition Is complied with, * * * and the ven- dor does not thereby part with his *See Uniform Sales Act, Section 55, 431; Ex parte Cooper, 11 Ch. Div. 68. 116 THE LAW OF SALES possession should pass before payment. So, if the seller has given the buyer credit, without expressly stipulating for retention of possession, it is presumed that he intended the buyer to have possession without concur- rent payment. As Chief Justice Shaw put it, *'A lien for the price is incident to the contract of sale, when there is no stipulation therein to the contrary, because a man is not required to part with his goods until he is paid for them. But conventio legem vincit; and when a credit is given by agreement, the vendee has a right to the custody and actual possession, on a promise to pay at a future time. He may then take the goods away, and into his own actual possession; and if he does so, the lien of the vendor is gone, it being a right incident to the possession."^* Expiration of Credit. — If the buyer does not take advantage of his right of possession, but leaves the seller in possession until the period of credit has expired, then a seller's lien arises and payment becomes a condition precedent to the buyer's right of possession.^^ Insolvency of Buyer. — The lien arises likewise. even before the period of credit has expired, if the buyer 64 — Arnold v. Delano, 4 Cush. occur before the actual possession (Mass.) 33; Robinson v. Morgan, was surrendered, namely, insol- 65 Vt. 37; Cutler v. Pope, 13 Me. vency of the buyer or non-payment 377; Conrad v. Fisher, 37 Mo. Ap. of the price when the credit ex- 352, 382; Pickett v. Bullock, 52 plred. In the case of the happen- N. H. 354, "The right of lien is to ing of either of these contingen- be deemed to be waived when the cies before the actual possession party enters into a special agree- of the lumber passed from the ment inconsistent with the exist- seller to the buyer, the vendor's ence of the lien or from which a lien which had been waived by a waiver of it may be fairly in- sale on credit, would revive, and ferred." the vendor might lawfully retain 65 — Robinson v. Morgan, 65 Vt. his possession until the price was 37; McElwee v. Metropolitan Lum- paid." This case even went so ber Co., 69 Fed. 302, "Delivery (by far as to say, if not to hold, that the seller) could not be refused the revived lien was not in turn unless one of two things should waived by a fresh term of credit. THE SELLER'S RIGHTS 117 becomes insolvent before he has taken actual possession. Hence a buyer who has become insolvent can not have possession, against the seller's will, even though he demands it before the original period of credit has expired. In the words of one court,®^ ''When the sale is upon credit, it is one of the implied conditions of the con- tract that the vendee shall keep his credit good ; his prom- ise to pay at a future day, involving an engagement on his part that he \yiU. remain, and then be, able to pay; which engagement is broken when he becomes insolvent, and unable to pay, and hence the right of the vendor to stop performance of the contract on his part. * * * It is true that, at that time (when payment is due) the vendee may again be solvent, and able to pay. There is no pre- sumption, or assurance, that he will. If any presumption arises, it is rather, that the insolvency will continue, which is more in accordance with the experience of the commercial world. "^''^ It makes no difference that the seller has accepted the buyer's notes or other evidences of indebtedness for the purchase price. It is a general principle that notes given and received are merely a form of evidencing the debt and are intended as such rather than as payment. In such case the obligation of the buyer to keep his credit good is unchanged, and his becoming insolvent entitles the seller to retain posses- sion of the goods until actual pajTuent.^^ If the notes 66 — Diem v. Koblitz, 49 O. S. 41. gone, notwithstanding his insol- 67 — Bohn Mfg. Co. v. Hynes, 83 vency." Thompson v. Baltimore Wis. 388, "Although, generally, & Ohio R. R. Co., 28 Md. 396; the purchaser of goods on credit White v. Welsh, 38 Pa. 396; Vogel- is entitled to the immediate pos- sang's Admr. v. Fisher, 128 Mo. session of them, that right is de- 386; Tuthill v. Skidmore, 1 N. Y. feated if he becomes insolvent be- S. 445; Pratt v. S. Freeman & fore he obtains actual possession; Sons Co., 115 Wis. 648, and fact in such case the vendor may re- that buyer again becomes solvent tain the goods and enforce his does not reinstate his credit, sell- lien thereon for the unpaid pur- er's lien continues; Dixon v. chase money. If, however, the Yates, 5 B. «S; Ad. 313. purchaser obtains the actual pos- 68 — Bohn Mfg. Co. v. Hynes, 83 session of the goods, the lien is Wis. 388; Thompson v. Baltimore 118 THE LAW OF SALES or other instruments have in fact been accepted in pay- ment of the indebtedness there will of course be no lien in case of insolvency. The buyer having paid the seller, the latter has no claim against him under the contract of sale.^^* The fact that the buyer's insolvency existed before the contract of sale was entered into does not affect the seller's lien, if he did not know of the insolvency. *'If there be a want of ability to pay, it can make no differ- ence, in justice or good sense, whether it was produced by causes, or sho^\^l by acts, at a period before or after the sale. ""''^ But if the seller knew of the buyer's insolvency at the time of the contract he would be held to have made the contract with that in mind and, by giving credit nevertheless, to have waived any right to possession. Evidence of Insolvency. — To prove a buyer's in- solvency "it is not necessary that he should have been declared a bankrupt or insolvent by a judicial tribunal, nor that he should have made an assignment of his prop- erty. If the fact exist, no matter how proved, if suffi- ciently and satisfactorily proved, the law requires no more.''^ Insolvency "means a general inability to pay, evidenced by the stoppage of payment, ' ^''^ and it may be proved by circumstances, such as the disappearance of the buyer and the protest or mere non-payment of his & Ohio R.R., 28 Md. 396; Vogel- road, 43 N. H. 580, Crummey v Bang's Admr. v. Fisher, 128 Mo. Raudenbush, 55 Minn. 426; Lan- 386; Tuthill v. Skidmore, 1 N. Y. caster Co. Bank v. Huver, 114 Pa, S. 445; Diem v. Koblitz, 49 O. S. 216. 41- 71— Benedict v. Schaettle, 12 69— Wisconsin Ins. Co. v. Filer, q. S. 515, 523, quoting from Hays 83 Mich. 496. v. Morille, 14 Pa. 48. 70-Loeb & Bro. v. Peters, 63 72_Chandler v. Fulton, 10 Ala. 243, 248; Benedict v. Schaet- rp^^ g tie, 12 O. S. 515: Reynolds v. Rail- ♦See Uniform Sales Act, Section 52, (1), (2). THE SELLER'S RIGHTS 119 notes. '^ Indeed, it is said that ''Actual insolvency of the vendee is not essential. It is sufficient if before the stoppage in transitu, he was either in fact insolvent, or had, by his conduct in business, afforded the ordinary apparent evidences of insolvency."'''* But a mere doubt of the buyer's solvency, though based on adverse reports from a credit agency, will not justify a refusal to deliver possession during the term of credit.'^ — — Effect on Lien of Suit for Price. — The lien is not lost by a seller 's efforts to enforce payment of the price as agreed. Thus he may receive a part payment,'^ or secure a judgment,"'"'^ or even satisfy in part a judgment for the price,'''^ without destroying his right to retain possession till paid the whole price. The judgment is not a settle- ment of the contract obligation, but a mere change in its form. The right to possession is not lost by proving a claim for the purchase price with the buyer's assignee in bankruptcy,''® nor with the administrator of his estate.^"* Effect of Receiving Security. — Neither is the lien lost because the seller has received other, additional, 73— TuthiU V. Skidmore, 1 N. Y. Co., 19 Weekly Rep. 388, A sold S. 445; Reynolds v. Railroad, 43 goods to B and shipped them to N. H. 580; Crummey v. Rauden- him by carrier, C. O. D. B refused bush, 65 Minn. 426. to accept and A recovered a judg- 74 Diem v. Koblitz 49 O. S. ment for the price which was paid 41_ In part. B then claimed posses- 75— Jewett Pub. Co. v. Butler, 159 Mass. 517; Kavanaugh Mfg. Co. V. Rosen, 132 Mich. 44, 92 N. W. 788. sion from the carrier and sued in detinue. The carrier was held to be A's agent and, as such, entitled to possession by virtue of A's lien which had not been destroyed. 76— Ante, p. 115. 79— Conrad v. Fisher, 37 Mo. Ap. 77— Rhodes v. Mooney. 43 O. S. 352; Rhodes v. Mooney. 43 O. S. 421; Waschow v. Waschow, 155 III. 421. Ap. 167. 80— Waschow v. Waschow, 155 78— Schrivener v. Gt. No. R. R. 111. Ap. 167. *See Uniform Sales Act, Section 56, (2). 120 THE LAW OF SALES security for the debt, unless the facts are such as to show that acceptance of the other security was inconsistent with the idea of a lien.^^ Effect of Seller's Attaching the Goods. — It seems probable that the seller will lose his lien if he attaches the goods or levies a judgment against them. There is, how- ever, a conflict of opinion upon this. His loss of the lien is placed on the ground that, "A lien is destroyed if the party entitled to it gives up his right to the possession of the goods. If another person had sued out execution, the defendant might have insisted on his lien. But Messer (the lienor) himself called on the sheriff to sell; he set up no lien against the sale; on the contrary, he thought his best title was by virtue of that sale. Now, in order to sell, the sheriff must have had possession; but after he had possession from Messer, and with his assent, Messer 's subsequent possession must have been acquired under the sale, and not by virtue of his lien."*^ This case was reviewed, with, others, in Lambert v. Nick- lass,®' and a contrary decision reached, on the theory that a lienor might properly hold possession by an agent and that the sheriff was to be looked upon as an agent of the lienor so far as concerned possession.®* General Principles. — These cases, holding that where title has passed a suit or judgment for the price does not affect the seller's right to possession, must be kept distinct from the holding that where possession has passed, but title has been retained till payment, a suit for 81 — Smith V. Greenop, 60 Mich. 84 — Lien lost by attachment, 61; Kimball v. Costa, 76 Vt. 289; Lawrence v. McKenzie, 88 Iowa Angus V, MacLachlan, 23 Ch. Div. 432; City National Bank v. Cra- 330; In re Taylor [1891], 1 Ch. han, 135 Iowa 230; Evans v. War- Dlv. 590. ren, 122 Mass. 303; Wingard v. ^ , ^ rM Banning, 39 Cal. 543, because the 82— Jacobs v. Latour, 5 Bing. ,. , . . , «5j •* attachment required an affidavit 130 that the demand was not secured 83—45 W. Va. 527. by any lien. THE SELLER'S RIGHTS 121 the purchase price has the effect of passing title.^^ The bases of the two propositions are entirely different, but one does occasionally find a tendency even in judicial utterance to confuse them. Since recovery of a judgment does not divest the sejler of his lien it conversely follows that he need not deliver possession to the buyer, nor even tender it, in order to bring his suit for the price, although he must be able and willing to do so. And this is, of course, consequent on the assumption that title may pass without change of possession, and that title, not possession, is the quid pro quo for the buyer's grant of the price.®^ The lien is not lost by mere failure to set it up as a reason for not delivering possession. "An examination of the authorities on the subject, from the early case of Boardman v. Sill, 1 Camp. 410, down, satisfies us that they all proceed upon principles essentially of equitable estoppel, and limit the application of the doctrine invoked by counsel to cases where the refusal to deliver the prop- erty was put on grounds inconsistent Avith the existence of a lien, or on grounds entirely independent of it, with- out mentioning a lien. Thus it has been repeatedly held that a lien is not waived by mere omission to assert it as the ground of refusal, or by a general refusal to sur- render the goods, without specifying the grounds of it, except in certain cases, where the hen was unknoAvn to the person making the demand, and that fact was known to the person on whom the demand was made. In such 85. — See ante, p. 103. think as the sale was perfect be- 86 — "But it would seem they, tween the Moffetts and Wade, the (the sellers), could not have an Moffetts could sue for the price action against Wade for the price, after the credit expired, without, even after the term of credit had a delivery or offer to deliver, be- expired, according to the rule in cause the law giving them a lien Noy's Maxims, until they had de- on the mule, it would be unreason- livered the mule to Wade, or tend- able to require them to relinquish ered him; and the case of Potter it before they were paid the price V. Cowand, Meigs, 26, above re- agreed." Wade v. Moffett, 21 III. ferred to, proceeds on this ground. 110. The other cases do not, and we 122 THE LAW OF SALES cases, if the ground of the refusal is one that can be removed, the other party ought in fairness to have an opportunity to do so. But no such state of facts exists in this case. While the defendant did not specify his vendor's lien by reason of plaintiff's insolvency, as the ground of his refusal, yet he never placed his refusal on any ground inconsistent with or independent of it. ' '^"^ Enforcement of Lien. — Resale. — A lien in its origin, as the derivation of the term from the root word meaning a *'tie" or "bond" indicates, gave no right to sell the goods subject to it. It was a right of possession merely. **The very notion of a lien is, that if the person who is entitled to the lien, for his own benefit parts with the chattel over which he claims to exercise it, he is guilty of a tortious act. He must not dispose of the chattel so as to give some one else a right of possession as against himself. The lien is the right of the creditor to retain the goods until the debt is paid."®^ If a ''seller's lien" were in fact a lien only, the only benefit it could be to him would be whatever he might find in the power of retain- ing possession of goods actually owned by another per- son — a dubious benefit in some circumstances. But the right of an unpaid seller who is still in posses- sion, while it is almost invariably called a lien, is in fact much more than a mere right of continued possession. He has a thoroughly recognized right to resell the property in case of an essential breach of the contract by the buyer. This right to resell was recognized as early as 1704 in Langfort v. Admx. of Tiler,^^ when the court said, ''After earnest given, the vendor cannot sell the goods to an- 87 — Crummey v. Raudenbush, and one who has claimed title 55 Minn. 426; Everett v. Coffin, 6 thereby loses his lien; Boardman Wend. (N. Y.) 603; Fowler v. Par- v. Sill, 1 Camp. 410, claim of title sons, 143 Mass. 401; White v. is inconsistent with that of a lien; Gainer, 2 Bing. 23; contra, Hanna of. Lord v. Jones, 24 Me. 439. V. Phelps, 7 Ind. 21; Hudson v. 88 — MuUiner v. Florence, 3 Swan, 83 N. Y. 552, a claim of title Q. B. Div. 484. Is Inconsistent with that of a Hen 89 — 1 Salkeld 113. THE SELLER'S RIGHTS 123 other, without default in the vendee ; and therefore if the vendee does not come and pay and take the goods, the vendor ought to go and request him ; and then if he does not come and pay, and take away the goods in convenient time, the agreement is dissolved, and he is at liberty to sell them to any other person. ' ' This statement of the court indicates that the resale, if made, is indication of a dissolution of the contract, and many other courts have spoken of the right of resale as founded on a ''rescission" of the contract. The actual decisions, however, do not bear out the idea. For the seller to dissolve, or rescind, the contract, in a proper sense of those terms, would put an end to its existence. He could not be sued, thereafter, but neither, the agree- ment having been rescinded, could he sue the ►buyer in assumpsit. Yet the decisions invariably recognize the right of a seller to sue the buyer on the contract despite his having enforced the lien by a resale of the goods. The theory on which resale is based, therefore, cannot really be that of a rescission of the contract and a revest- ing of title in the seller, who may thereupon resell his own property. It is rather, that the seller resells property of the buyer, which his lien gives him legal authority and power to do. ' ' His right is very nearly that of a pledgee, with power to sell at private sale in case of default. "^° In Sands v. Taylor,^^ the seller resold wheat, title to which had passed to the buyer, but which the buyer re- fused to take and pay for. He then sued the buyer for breach of the contract. The court allowed the suit on the theory that the resale was not a dissolution of the contract but was made by the seller as a ''trustee, or agent" for the buyer. The possession of the seller was, it must be noted, predicated in this case on abandonment by the buyer rather than on a lien.^^ 90 — Tuthill V. Skidmore, 124 92 — See discussion of this case N. Y. 148. in Moore v. Poter, 155 N. Y. 481. 91—5 Johns. ( N. Y.) 395. 124 THE LAW OF SALES In Conrad v. Fisher,®^ the court said specifically, *'We understand it to be the settled law that the right to en- force a vendor's hen, in respect of goods sold upon credit (sic), is not a right to rescind the contract of sale, but is a right to detain the goods until the indebtedness for the purchase price is discharged, at or before the expiration of the credit, and, if not so discharged to sell them and apply the proceeds of their sale to the liquidation of the indebtedness. ' '^** What Constitutes Default. — The fact that the seller may exercise a right of resale, by virtue of his lien, in case of essential default by the buyer, raises the ques- tion, what constitutes such a default. A repudiation of the agreement by the buyer is ob- viously a material breach. Thus a refusal by the buyer to receive the goods if tendered is a clear breach of con- tract and, seemingly without demur, is held to give the seller a right to resell and sue for the difference. Of course these cases do not often involve any question of seller's hen by name, since they arise out of an attempt by the seller to deliver possession, but they furnish a positive analogy as to what would constitute such a breach as to allow resale under the lien. The case of Langfort v. Admx. of Tiler,^® already re- ferred to, intimates that mere failure of the buyer to pay at the time set is not such a breach as will permit a re- 93 — 37 Mo. Ap. 352, 362. upon the resale." It was assumed 94 — Diem v. Koblitz, 49 O. S. 41; in this case that title had passed Maclean v. Dunn, 4 Bing. 722, "It to the buyer. Van Brocklin v. has never been decided that a re- Smeallie, 140 N. Y. 70, the right sale of the goods is a bar to an of resale is not limited to tangible action for damages for non-per- property, nor to perishable prop- formance of a contract to purchase erty, but applies to choses in a/> them * * * it is most convenient Hon and any type of merchandise, that when a party refuses to take Ames v. Moir, 130 111. 582; Arnold goods he has purchased, they v. Carpenter, IG R. I. 5G0. should be resold, and that he 95—1 Salkeld 113. should be liable to the loss, if any, ♦See Uniform Sales Act, Section 61, (1). THE SELLER'S RIGHTS 125 sale, but that thereafter ''the vendor ought to go and request him ; and then if he does not come and pay, and take away the goods in convenient time, * * * he (vendor) is at liberty to sell them to any other person." This idea that mere failure to pay is not an essential breach is "sustained by Martindale v. Smith,^^ in which, although the argument was as to the right to "rescind" the con- tract and revest title because of default in payment, the court said, "In a sale of chattels, time is not of the es- sence of the contract, unless it is made so by express agreement. ' ' The mere stipulation that payment was to be made "in twelve weeks from the date" of the contract was held not expressly to make that time of the essence.®''^ In Fancher v. Goodman,^* it was held that a seller had no right to resell by virtue of his lien merely because the buyer did not pay at the time set, but that he might property have resold if he had first given notice to the buyer that he would resell if payment were not forth- coming.^^ The failure of a buyer to keep his credit good revives the seller's lien and justifies him in refusing to deliver possession. But such failure is not a breach of the con- tract to buy. The fact that the buyer becomes bankrupt does not absolve the seller from his obligation to deliver the property, if the bankrupt or his assignee is in fact ready to perform at the time such performance is due. Non-payment by the buyer may, as indicated below, jus- tify the seller in reselling, but mere bankruptcy before the time of payment does not conclusively indicate that the 96—1 Q. B. 389. 98—29 Barb. (N. Y.) 315. 97 — This case very strongly im- 99 — Raymond v. Bearnard, 12 plies that the seller has no right Johns. (N. Y.) 274; Porter v. of resale at all, unless he shall Wormser, 94 N. Y. 431, there is no have truly rescinded the contract, right of resale while credit given It may possibly stand for the still exists; Greaves v. Ashlin, 3 proposition that non-payment does Camp. 426, mere failure of buyer not permit of a rescission, and to take away goods within a rea that resale by virtue of a lien is sonable time held not to justify a never allowed. resale. 126 THE LAW OF SALES buyer will not be able to pay when the time comes."" The buyer, however, cannot practically object to a resale by the seller, even though the seller has thereby rendered himself unable to perform, until he, the buyer, is himself ready to perform. The unauthorized resale is not in itself a breach. The- breach would be the seller's unjusti- fied refusal to deliver at the proper time and to predicate such breach the buyer would have to show that he was himself ready to perform.^"^ But, failure of a buyer to pay when agreed is quite an- other matter, and, as is intimated in the cases just re- ferred to, if, after the buyer's failure to pay at the time stipulated, the seller specifically notifies him that pay- ment is due, and the buyer thereafter refuses to pay, or so neglects it as to imply a refusal, there is a sufficient breach to justify the seller in reselling.^"^* If there has been no such breach by the buyer as would justify a resale by the seller, the buyer upon tender of pay- ment is, of course, entitled to possession of the goods. If the seller, by an unjustified resale, has put it out of his power to perform, the buyer may have an action against him, upon tender of his own performance at the proper time."' Application of Proceeds of Resale. — Assuming, merely, that the seller, by virtue of his lien, has not a 100— Kearney v. Union Pac. R. R. 498; Hayes v. Nashville, 80 Fed. Co., 97 Iowa 719, 59 Am. St. 434; 641; Maclean v. Dunn, 4 Bing. 722; Gibson v. Carruthers, 8 M. & W. Ogg v. Shuter, L. R. 10 C. P. 159; 321. 1 C. P. Div. 47. 101 — Diem V. Koblitz, 49 O. S. 103 — A buyer who has tendered 41; Rappleye v. Racine Seeder the amount due the seller under Co., 79 la. 220; Brassel v. Troxel, the latter's lien may bring an ac- 68 ni. Ap. 131; Pardee V. Kanaday, tion for conversion against the 100 N. Y. 121; Ex parte Chalmers, seller, Wright v. Andrews Co., 212 L. R. 8 Ch. Ap. 289. Mass. 186, 98 N. E. 798; Pardee v. 102— VanBrocklen v. Smeallie, Kanady, 100 N. Y. 121; Martindale 140 N. Y. 70; Olcese v. Mobile v. Smith, 1 Q. B. 389; compare Fruit Co., 112 111. Ap. 281; Nelson Gibson v. Carruthers, 8 M, & W. v. Hirsch & Sons Co., 102 Mo. Ap. 321. •See Uniform Sales Act, Section 60, (1), (2). THE SELLER'S RIGHTS 127 right of rescission, but only a right to resell in satisfac- tion of the indebtedness, a question is raised as to the party entitled to the surplus in the unusual event that the resale should bring more than the amount of the indebted- ness. Logically the buyer would be entitled to the excess. But if the seller who remains unpaid after title' has passed has a right to revest title in himself, by so acting he would become again the owner of the goods, and would be entitled to all they might bring upon a resale, just as though title had never passed to the buyer. In the event that a resale should bring more than the purchase price, it would probably be presumed, although no case involv- ing the precise question has come to the writer's knowl- edge, that the seller had chosen to revest the title in him- self, rather than to resell in mere enforcement of his lien. The real question, therefore, is whether a seller who has passed title but retained possession can revest title in himself upon the buyer's default in payment.^*'* The right to rescind contracts, other than those of sale, because of essential default on the part of the promisor is discussed in works on contract and does furnish an analogy for the proposition that the seller in possession may, if he choose, rescind and dissolve the contract in such a way as to revest himself \vith title, instead of pro- ceeding by way of enforcing his lien.* Failure to Resell. — The same question arises in another form also. If there has in fact been such a breach by the buyer as would justify a resale by the seller, in enforcement of his lien, does the buyer continue to be OA\Tier until such resale! In other words, is it absolutely necessary for the seller to resell in order to divest the buyer of title? "While no court appears to have decided 104 — There are cases in which these the title was in the seller resale has brought more than the on a different theory than rescis- original purchase price, but in sion. *See Uniform Sales Act, Section 61, (1). 128 THE LAW OF SALES the matter exactly, there are statements which intimate that the seller could revest title in himself on the buyer's default and need not resell the goods. Assuming in answer to these questions that the seller does have power to revest the title in himself, there arises the further question whether it is necessary for him to rescind the contract, in the precise sense of putting an end to it, to do this. We have seen that when title has not passed, the seller may keep the goods, which are already his own, and sue for damages, which are gener- ally the difference between the market value and the agreed price. We have seen also that the seller who has passed title can resell the goods, in a certain sense as the buyer's property, and sue for the difference. But can the seller who has passed title also keep the goods as his own and still sue for the difference between their market value and the agreed price? If, to revest title in himself, he has to abrogate the contract, there is then no contract ex- isting on which to base his action for this difference. This matter is much confused with the right of a seller who has not passed title to keep the goods as his own and sue for the difference between market value at time of breach and the agreed price. But in these cases the seller has continued in possession of the title all the time ; there is no question of retaking it from the buyer. Neverthe- less the authorities on this point, particularly Dustan v. McAndrew,^°^ are occasionally made the basis of state- ments, by both judges and text-writers, to the effect that a seller who has passed title can retake it without actually rescinding the contract. Thus, in Van Brocklin v. Smeal- lie,^°^ it is very clearly said, though as a matter of dictum only, that even where title has passed the seller still in possession may keep the goods as his own and sue for damages. But there are not enough cases in which the 105—44 N. Y. 72. 106—140 N. Y. 70. THE SELLER'S RIGHTS 129 matter has been clearly passed on for any real conclusion to be drawn.* Notice of Resale. — The method of reselling, the giving of notice and the like, are governed by the same rules as apply to resale in order to fix damages in case of the buyer's refusal to accept title. These rules have al- ready been discussed.^"'' In that discussion it was pointed out that one reason why the seller need not give notice of the resale was because he was reselling his own property for the purpose of getting evidence as to its market value, and lack of notice, therefore, could not affect the validity of the sale, but only the value of the evidence. In case of resale by a seller by virtue of his lien, he is selling property of another person. It might be supposed therefore that he would be required to give notice at least. In VanBrockhn v. Smeallie,^"^ however, the court said, — as a matter of dictum since notice had in fact been given — that, even though title had passed to the buyer, the resale ''need not be at auction, unless such is the customary method of selling the sort of property in question, nor is it absolutely essential that notice of the time and place of sale should be given to the vendee." In Pollen v. LeEoy,^°^ the sale was of specific property, and the court appears to have considered that title had passed, although its real opinion upon this point is not clear. Nevertheless, it held expressly that notice of the time and place of resale need not be given the buyer, saying, "The law regards him (the seller), it has been said in some of the cases, if in possession of the goods, as the agent quoad hoc of the vendee. But it is no part of such an agency, or of the duties involved in it, to notify the principal of the time and place at which the goods are to be sold, or exposed for sale. Indeed, in a majority of cases such a notice would be entirely impracticable, as it 107— Ante, p. 90. 109—30 N. Y. 549. 108—140 N. Y. 70. *See Uniform Sales Act, Section 61, (1). 130 THE LAW OF SALES would have been in this. Unless the sale is to be public and at auction, no notice of the time and place can be given. * * * There is no analogy in this particular be- tween this case and that of a pledge. The pledgee is not the owner nor the agent of the owner. He is clothed with the possession and with a right to sell the property, in order to repay himself a debt. Unless he resorts to judicial proceedings to extinguish the right of his debtor, he is bound to give notice to the latter * * * . A vendor, on the contrary, is simply an agent, if he elect to become such, of a vendee who refuses to complete his purchase ; an agent to sell the property fairly and to the best advan- tage. The only requisite to such a sale as a measure of the rights and the injury of the party, is good faith, in- cluding the proper observance of the usages of the par- ticular trade. ""° In these cases there had been notice to the buyer of the seller 's intention to resell, though the time, place or man- ner of the resale were not indicated. It is probable that this notice of intention to resell would be requisite to a resale by virtue of the lien,^" although it is not usually required in cases of resale merely to fix damages when title has not passed."^* If notice were not given, it might be a fair assumption that the seller had elected to rescind the contract and take back title to himself, if, as we have assumed above, courts permit revesting of title to be done. That is, failure to notify the buyer of the resale would indicate that the seller had chosen to resell the goods as his own. Stoppage in Transitu. — We have seen that a seller by delivering possession to the buyer loses his right of lien. 110 — Waples & Co. v. Overaker Mooney, 16 Ind. Ap. 362; Dill v. & Co., 77 Tex. 7; accd. Ridgley v. Mumford, 19 Ind. Ap. 609; New- Mooney, 16 Ind. Ap. 362. berger v. Rountree, 18 111. Ap. 610; 111 — Hayes v. Nashville, 80 Fed. Winslow v. Harriman Iron Co., 641; Davis Sulphur Ore Co. v. At- — Tenn. — , 42 S. W. 698. lanta Co., 109 Ga. 607; Ridgley v. U2—Ante, p. 90. *See Uniform Sales Act, Section 60. (1). (3), (4). (5), 61, (2). THE SELLER'S RIGHTS 131 There is, however, one real or apparent exception to this. If the goods have merely been given to a carrier for transportation to the buyer and arc still in transit, the seller is allowed to retake possession if it develops that the buyer is apparently insolvent. This right is called ''stoppage in transitu." Like the ''seller's lien"' the term presupposes that title has passed to the buyer.^^* A seller who has not yet passed title may retake posses- sion from a carrier because he is owner, just as an owner may keep possession if he chooses. But it is only when the right of repossession is exercised by a seller who has parted with title that the name "stoppage in transitu" is properly applied."** Origin. — This right to retake possession appears to have originated in equity, on the principle that if a seller could prevent the goods from actually coming into the hands of a bankrupt he ought to be allowed to do so. It was soon developed also as a principle of law.^^^ 113 — Reynolds v. Rr., 43 N. H. frequently raised as any other 580; Dickman v. Williams, 50 Miss, mercantile question within the 500; Rowley v. Bigelow, 12 Pick, last hundred years, it must be (Mass.) 307; Bolton V. Lancashire, owned that the principle on which etc. Co., L. R. 1 C. P. 430, 439. it depends has never been either 114 — Courts occasionally ne- settled or stated in a satisfactory gleet the true meaning of the manner. In courts of equity it phrase and use it in connection has been a received opinion that with retaking by an owner. Swan- it was founded on some principle wick V. Sothern, 9 Ad. & El. 895; of common law. In courts of law Cf. Pattison v. Culton, 33 Ind. 240. it is just as much the practice to The distinction is acted on in call it a principle of equity, which Kearney v. Union Pac. Rr. Co., 97 the common law has adopted." Iowa 719, 59 Am. St. 434. This opinion cites authority bear- 115 — Wiseman v. Vandeputt, 2 ing upon the conflicting theories Vernon 203; Burghall v. Howard, of origin and points out, also, the 1 H. Blackstone 365 N; D'Aquila v. existence of the right in other Lambert, 1 Ambler 399, 2 Eden 77; systems of law. Gibson v. Carruthers, 8 M. & W. That the right of stoppage orig- 321, "Although the question of inated neither in law nor in equity, stoppage in transitu has been as but was adopted from the Law *See Uniform Sales Act, Section 57. 132 THE LAW OF SALES When Right Arises. — The right of stoppage arises only when the buyer is discovered, after the shipment of the goods, to be insolvent. Since the title to the goods is in the buyer, the seller has no right to them, after he has parted with possession, save by virtue of this particular remedy. This right arose, as the expression of the early cases indicates, out of desire to protect the seller against obvious and inevitable loss, rather than from any logic- ally derived rule of law. ''It was determined, on solid reasons, that the goods of one man should not be applied in payment of another man's debts." It extends, there- fore, only to cases where the buyer is discovered, subse- quent to the sale, to be insolvent. The date on which the buyer became insolvent is immaterial; it is the date on which the seller becomes aware of it that matters. The right of stoppage is not derogated by the fact that the buyer was already insolvent at the time of shipment, or even at the time the contract of sale was entered into. ''If there be a want of ability to pay, it can make no dif- ference, in justice or good sense, whether it was produced by causes, or shown by acts, at a period before or after the sale.""« If the seller knew, actually or constructively, of the buyer's insolvency at the time of shipment, or, a fortiori, at the time of making the contract, there would be no rea- son for allowing him to stop in transitu. The fact that he shipped the goods, knowing the buj^er to be insolvent, would clearly imply an intent to give the buyer possession Merchant is stated in Kendall v. right as existing when title is in Marshall, 11 Q. B. D. 356. the buyer. It is obvious from the language 116— Loeh & Bro. v. Peters, 63 of the early cases that some idea Ala. 243, 248; Lancaster Co. Bk. of title not having passed at all v. Huver, 114 Pa. 216; Reynolds entered into the decision and the v. Rr., 43 N. H. 580, overruling seller was thought of as retaking Rogers v. Thomas, 20 Conn. 53; possession of his own goods, Buckley v. Furniss, 15 Wend. (N. rather than retaking title, or re- Y.) 137; O'Brien v. Norris, 16 Md. asserting a mere lien. But the 122; Blum & Co. v. Marks, 21 La. later cases clearly recognize the An. 268; More v. Lott, 13 Nev. 376. THE SELLER'S RIGHTS 133 despite that fact, and the reason for the exception to the rule that a seller can not retake possession after title has passed, would be gone. The courts so hold.^" As will be seen later,"' the exercise of the right to stop is not a rescission of the contract but a mere withholding of actual possession of the goods. As no more effect' than a delay in possession would result, the courts have been unanimous in holding that actual insolvency of the buyer is not necessary to justify the stoppage. Such an ap- pearance of insolvency as would lead a reasonable man to suppose insolvency existed is all that is necessary. The courts appear to make a distinction, although there is no statement to such effect, between the evidence of insolvency which will support a seller's right to keep possession, (as against an attaching creditor of the buyer, for instance,) and that which will protect him against a suit in damages for delay caused by his stoppage. For the one, actual insolvency is necessary, for the other only appearance of insolvency. This may explain some of the dissimilarity in holdings upon rather similar facts. ^^® But there must be a real appearance of insolvency at least and mere suspicion that the buyer is insolvent, or belief that, from other reasons than insolvency, he will not pay for the goods, will not justify a stoppage and a seller who has acted on any such reason is not entitled to possession and, moreover, will be liable in an action for damages by the buyer."® 117 — O'Brien v. Norris, 16 Md. 93 Wis. 250, failure to pay seller's 122; Buckley v. Fumiss, 15 Wend, claim and disappearance of buyer (N. Y.) 137; Blum & Co. v Marks, sufficient; More v. Lott, 13 Nev. 21 La. An. 268; Fenkhausen v. Fel- 376. lows, 20 Nev. 312; Evans etc. Co. 120 — Kavanaugh Mfg. Co. v. V. Missouri K. & T. Rr., 64 Mo. Rosen, 132 Mich. 44, 92 N. W. 788, Ap. 305. mere belief founded on unsatis- 118 — Post, p. 146. factory rating by a credit agency 119 — O'Brien v. Norris, 16 Md. not sufficient; Jewett Pub. Co. v. 122, "if a stoppage of payment by Butler, 159 Mass. 517, mere doubt the vendee be proved, it is suffi- not enough; Bayonne Knife Co. v. cient." Jeffris v. Fitchburg R. R., Umbeuhauer, 107 Ala. 496; Smith 134 THE LAW OF SALES The right of stoppage is not affected by the fact that the seller has received notes or other instruments for the price, or in other ways given credit, nnless such notes have been accepted in payment.^^^* Neither is it affected by part payment, although, of course, the debt for which the property could be held would be proportionately reduced.^^^ Does Not Exist Against Buyer's Possession. — The right of stoppage in transitu is, as its name indicates, a right to retake possession only while the goods are in transit to the buyer. The exception on which the right is founded does not go to the extent of permitting repos- session after the journey is ended. This point was raised in Conyers v. Ennis.^^' In that case it appeared that one Rousmaniere had ordered goods of the plaintiff which the latter duly shipped to him. He was insolvent at the time, although this was unknown to the plaintiif , and later committed suicide. The carrier dehvered the goods into the hands of his administrators, the defendants. The de- fendants resold the goods and the plaintiffs now claimed the proceeds. As there appeared to be no actual fraud on Rousmaniere 's part on which a rescission of the con- tract could be founded, the plaintiffs claimed a right of stoppage in transitu. Mr. Justice Story began his opinion by recognizing that ''this is a case of extreme hardship, and such as might well induce a court to strain after some mode of redress. ' ' & Co. V. Barker, 102 Ala. 679, fact 273; Hays v. Mouille & Co., 44 Pa. that buyer has absconded is not, 48, notes need not be tendered by itself, enough; Gustine v. Phil- back at time of stoppage; Ed- lips, 38 Mich. 674. wards v. Brewer, 2 M. & W. 375; 121— Newhall v. Vargas, 13 Me. Feise v. "Wray, 3 East 93. 93; Stubbs v. Lund, 7 Mass. 453; 122 — Newhall v. Vargas, 13 Me. Brewer Lumber Co. v. Bost. & Al. 93 ; Howatt v. Davis, 5 Mumford Rr., 179 Mass. 228, even though on (Va.) 34; Feise v. Wray, 3 East receipt of note bill is marked paid; 93. Clapp Bros. v. Sohmer, 55 Iowa 123—2 Mason 236, Fed. Cas. 3149. ♦See Uniform Sales Act, Section 52, (1), (2). THE SELLER'S RIGHTS 135 * * The principal point, ' ' he continued, ' ' which under these circumstances has been pressed at the bar, is that the right of a consignor to stop property in cases of insolv- ency, ought not to be confined to cases of stoppage in transitu, but in equity should extend to all cases where the property is not paid for and remains in the hands of the consignee. It is admitted that the decisions in Eng- land have confined the right of stoppage to cases where the property is in its transit. But it is suggested, that the point has not been solemnly adjudged in the United States, and that it is open for the court to adopt the more enlarged rule, hinted at by Lord Ilardwicke, in Snee v. Prescott}^^ * * * All argument of this sort is addressed in vain to this court. * * * Nothing is better settled, if an uninterrupted series of authorities can settle the law, than the doctrine that the vendor, in cases of insolvency, can stop the property only while it is in its transit. If it has once reached the consignee, there is an end of all right to reclaim it as a pledge for the pajTnent of the pur- chase money. "^''^ When Goods Are in Transit. — The issue is very often raised, therefore, as to just when the transit be- tween seller and buyer has ceased. In general it may be said that it is not at an end until the goods have come into the actual possession of the buyer or the possession of someone acting as the buyer's agent for the purpose of possession* Very broadly speaking the goods are in transit, whether in motion or at rest, whether in the hands of the original carrier or of some remote forwarder, so long as 124—1 Atk. 245. 44 Fla. 803, 33 So. 527. Even though 125 — This is true even though the carrier later takes possession the buyer personally is willing to from the buyer and goods are in give up the goods and admits that its hands at time of seller's at- he received them without intend- tempt to stop. Re Dancy Hard- ing to keep them. Smith v. Gail, ware Co., 198 Fed. 336. *See Uniform Sales Act, Section 58, (1), (2), (3), (4). 136 THE LAW OP SALES the bailee in whose possession they are has them by virtue of the seller's contract with the transportation agency. The transit does not end until the person in whose pos- session they are, holds, by virtue of some new agreement, under some contract relation with the buyer, or his privy.^^^ Mere length of time elapsed between the shipment and the attempt to stop in transitu does not itself terminate the transit, nor otherwise affect the right. ^^"^ The carrier, as such, is an agent for carriage and not primarily for possession and the transit is not at an end so long as the goods are in its possession as carrier. Even though they have come to their journey's end so far as the carrier's duty to transport is concerned, if the freight is still unpaid, or the carrier has another lien against them, and the carrier has not agreed with the buyer to hold under a new contract with him, they are still tech- nically in transit.'^^^ But the idea of transportation — not necessarily meaning motion — is essential ; if it is lacking, the agent is obviously an agent primarily for posses- sion.^^® The character of the carrier is immaterial. So long as it is acting as an agent for the purpose of transportation only and is not an agent of the buyer for purpose of pos- session, as such, the right of stoppage may be exercised.^'® 126 — It has been said that even Schneider, 13 Ind. Ap. 23; Harding actual physical possession by the Paper Co. v. Allen, 65 Wis. 576; buyer would not terminate the Kahnweiler v. Buck, 2 Pears. (Pa.) transit if without consent on his 69, even though carrier has made part. Heinekey v. Earle, 8 El. & tender of possession to the buyer; Bl. 410. 120 Eng. Rep. 153. Coleman v. N. Y., N. H. & H., 215 127 — Buckley v. Furniss, 15 Mass. 45, even though buyer has Wend. (N. Y.) 137, 40 days; Jeffris paid freight and taken samples. V. Fitchburg Rr., 93 Wis. 250, more 129— Rummel v. Blanchard, 216 than a year. js^ y 343 128- Jeffris v. Fitchburg R. R., i3o_Johnson v. Eveleth. 93 Me. 93 Wis. 250; Brewer Lumber Co. ^^^ ^^^^^^^ company as carrier; v. Bost. & Al. R. R.. 179 Mass. Muskegon v. Underbill. 43 Mich. 228; Wheeling & L. E. R. R. Co. v. ggg. implied. Koontz, 61 O. S. 551; Rogers v. THE SELLER'S RIGHTS 137 Even if the means of transportation is owned or chartered by the buyer, if it is used as a carrier for the purpose of transporting the goods to the buyer, the goods are in transit until they reach him, and are subject to stoppage. ^^^ If, however, they are delivered to a vessel or other'car- rier as though to a warehouse, or to an agent for posses- sion, then the transit between the seller and the buyer is at an end, despite the fact that the goods are to be car- ried to other points. The matter is well stated in Berndt- son v. Strang,^^^ the court saying, ''If a man send his o\vn ship, and orders the goods to be delivered on board his own ship, and the contract is to deliver them free on board, then the ship is the place of delivery and the trausitiis is at an end, just as much * * * as if the pur- chaser had sent his own cart, as distinguished from hav- ing the goods put into the cart of a carrier. Of course there is no further transit us after the goods are in the purchaser's own cart. There they are at home, in the hands of the purchaser, and there is an end of the Avhole delivery. The next thing to be looked to is, whether there is any intermediate person interposed between the vendor and the purchaser. Cases no doubt may arise, where the transitus may be at an end although some person may intervene between the period of actual delivery of the goods and the purchaser 's acquisition of them. The pur- chaser, for instance, may require the goods to be placed on board a ship chartered by himself and about to sail on a ro\'ing voyage. In that case, when the goods are on board the ship everything is done; for the goods have been put in the place indicated by the purchaser and there is an end of the transitus." The question of whether the delivery to the carrier is for transportation between the seller and buyer, or is a delivery to a representative of the buyer for transporta- 131— NewliaU v. Vargas, 13 Me. parte Falke, 14 Ch. Div. 446, 7 App. 93; Stubbs v. Lund, 9 Mass. 453; Cas. 573. Ilsley V. Stubbs, 9 Mass. 65; Ex 132— L. R. 4 Eq. 481. 138 THE LAW OF SALES tion elsewhere, is really one of fact in each case and not one that can be solved by the application of any rule.^^' The truest test, although one not expressed by courts is, that if the possessor of the goods holds them through contract with the seller, the goods are in transit, while if contract relation with the seller has terminated, or the possession has been delivered without contract relation, the transit is ended. ^^* The coming of the goods into other hands than those of the original carrier does not necessarily terminate the transit, if the original contract still exists. The delivery by the carrier to a wharfinger or ware- houseman does not terminate the transit, if such recipient is the carrier's agent, or a public agent, to hold the goods until actual or constructive delivery, to the buyer. Such a warehouseman is merely a link in the chain of trans- portation under the seller's original directions.^'* 133— Bethell & Co. v. Clark, 20 Q. B. Div. 615. 134 — Newhall v. Vargas, 13 Me. 93; Stubbs v. Lund, 9 Mass. 453; Berrendson v. Strang, L. R. 4 Eq. 481; Cf. Schotsmans v. Lancashire & Y. R. R., L. R. 2 Ch. Ap. 336. Id Bethell & Co. v. Clark, 20 Q. B. Div. 615, the contract of sale was silent as to delivery but the buy- er's subsequent order was to "con- sign * * * to the 'Darling Downs', to Melbourne * * *". The issue was whether transit ended with delivery on board the Darling Downs. The court held that it did not 80 end, that where the transit "has been caused either by the terms of the contract or by the di- rections of the purchaser to the vendor, the right of stoppage in transitu exists" and that the "busi- ness moaning" of the order in this case was, not that the goods were to be delivered to the Darling Downs as to a warehouse, thence to be sent further by the buyer, but to her as a carrier which would transport them to Mel- bourne. The Darling Downs ap- pears to have been a general ship, scheduled to sail to Melbourne in- dependently of the buyer. In. Rowley v. Bigelow, 12 Pick. (Mass.) 307, the goods were or- dered delivered to the ship "Lion", which the buyer owned himself, and which he had himself appar- ently ordered to proceed to Boston. It was held that the transit ended on delivery aboard the Lion. 135— Reynolds v. R. R., 43 N. H. 580; Calahan v. Babcock, 21 O. S. 280; Mottram v. Heyer, 5 Denio (N. Y.) 629, delivery to customs ofTicers; Donath v. Broomhead, 7 Pa. 301, idem. THE SELLER'S RIGHTS 139 Neither is the original transit terminated by dehvery from one carrier to another so long as both are actors in the originally contemplated journey."^ But the transit is ended when the original carrier delivers them, even to another carrier, if the delivery is at the buyer's order and was not a part of the transit originally contemplated as necessary to get them to the buyer. The second carrier then holds them as the buyer's representative in posses- sion. Thus, in Li re Patterson Co.,^^''^ C ordered goods of B, who in turn ordered them of A. A thereupon shipped them to B, at St. Louis. On their arrival there B reconsigned them to C, in Arkansas. The court held the transit to have ended with B's reconsignment, as the original journey to the buyer was ended in St. Louis, even though the sellers knew they were ultimately to go fur- ther on, and had tagged the goods with C's name and address.^^^ A fortiori, the transit is not ended through mere deliv- ery of the goods to a warehouseman whose duty is to send the goods still further on their journey. And this is so even though the orders as to the rest of the journey are to come from the buyer himself. Although it does not expressly appear in the cases, a distinction would un- doubtedly be made if the parties had not clearly contem- plated the place of the further journey at the time of shipment. That is to say, the holdings that a ware- houseman in whose care goods have been consigned is not a possessory agent of the buyer seem to be founded 136— White v. Mitchell, 38 Mich. R. R. Co., 108 Ga. 70, 79 Am. St. 390, delivery by carrier to a 26, a sub-buyer laid his hands on carter; Re Burlte & Co., 140 Fed. the goods while in the freight 971, idem; Bethell v. Clark, 20 house at their original destination Q. B. Div. 615. and ordered them sent to his own 137 — 186 Fed. 629. buyer; yet the original seller was 138 — Cf. Muskegon Booming Co. allowed to retake possession. In V. Underbill, 43 Mich. 629; Brooke Lewis v. Sharvey, 58 Minn. 464, a Iron Co. V. O'Brien, 135 Mass. 444; mere order from the buyer to the Norfolk Co. V. N. Y., N. H. & carrier to deliver to another per- il. R., 202 Mass. 160. son in the same place was held But in Bravan v. Atlanta, etc. not to terminate the transit. 140 THE LAW OF SALES on the fact that at the time of consignment it was con- templated that tliey had still to go to some definite place before reaching the buyer, although the buyer was to direct their getting there. Thus, where goods were con- signed to the buyer at Malone, in care of a warehouse- man at Plattsburg, it was obvious that a journey beyond Plattsburg was contemplated, even though the means of getting them from Plattsburg to Malone was left to the buyer's arrangement. In that case it was held that the goods had not come to the end of their transit in the warehouseman's hands.^^* Delivery by the carrier, even to a recipient who has nothing to do with the transportation, does not end the transit if the recipient does not in any way represent the buyer, as agent or otherwise.^*" But the right is lost if the recipient represents the buyer, as, for instance, the administrator of a deceased buyer's estate.^" To recapitulate, the fact that the goods are or are not in motion seems to have no effect in determining whether or not they are in transit. Neither does the character of the person in possession — i. e., his character as a trans- porter, a forwarder, or a warehouseman — have any 139 — Buckley v. Furniss, 15 method of getting to original one; Wend. (N. Y.) 137; Blackman v. Bethell v. Clark, 20 Q. B. Div. 615. Pierce, 23 Cal. 508; Hepp v. Glov- no-Kingman & Co. v. Deni- er, 15 La. 461; Hause v. Judson, ^^^^ g^ ^.^^^ g^g^ ^^ L. R. A. 347, 4 Dana (Ky.) 7; Chandler v. Ful- ^^^.^^^^ ^^ mortgagees of the buy- ton, 10 Tex. 2, buyer's instructions ^„ „ , „ , „ , +„i,„„ r,^oc,^oc;^« ^* er who had taken possession of to intermediary to "hold onto the ■.. „^^-.^ goods until he should order them g^^ ^^ assignee or trustee in away- held not to end transit, ^^j^kruptcy does represent the Frame v. Oregon Liquor Co., 48 ^^^^^^ ^^ ^^^^.^ g^^^^^^ 258 Fed. Ore. 272, goods in hands of a teamster ordered by buyer to get them from the freight depot to which they had been consigned held still in transit. This case goes further than others. Hays v. Mouille & Co., 14 Pa. 48; Cablen v. 141— Jacobs v. Bentley, 86 Ark. Campboll, 30 Pa. 255, distinction 186; Conyers v. Ennis, 2 Mason between new destination and 236. 688; McElroy v. Seery. 61 Md. 389; Cf., however, Tufts v. Syl- vester, 79 Me. 213, holding a "bankruptcy messenger" not to represent the buyer. THE SELLER'S RIGHTS 141 apparent effect on the decision. The one really indica- tive circumstance that can be deduced from the cases is the contract relation through which the holder of the goods is in possession. If his possession is one of con- tract, directly or indirectly, with the seller it indicates that he holds as a link in the transit. If his possession is under a contract with the buyer, it strongly indicates that the buyer, has received possession — through his agent — and the transit is at an end. If the goods are not consigned to the buyer at all, but to a buyer from him, to whom he has ordered them shipped, they would nevertheless seem technically to be in transit, so far as the right of stoppage is concerned, until they reach the possession of the person to whom they are consigned. This case occurs when the buyer gives instructions for the seller to make delivery to some third person instead of to the buyer himself. In such case the third person would seem to stand in place of the buyer, and the goods to be in transit until they have come into the possession of such representative of the buyer. Thus, if the original buyer has resold and thereafter directs the seller to ship to his buyer, the transit is between the original seller and the second buyer ; but until the goods have reached the sub-buyer it can not be said that they have come into the hands of either the buyer or of any possessory agent of his. They are, therefore, logically still in transit.'^*^ The decided cases, however, are against this position, and hold that the right of stoppage does not exist after shipment to the sub-buyer.^" 142 — Compare Ex parte Golding, directly to the sub-buyer. In the 13 Ch. Div. 628. former case, there is no doubt, 143 — There are two ways in from the authorities already cited, which the case might arise: — the but that the goods would be sub- buyer might order the goods sent ject to stoppage any time before to some agent or representa- they reached the consignee named, tive of his, instead of to him- Such a transit is truly one be- self; or the buyer, having resold tween the seller and buyer as the goods, might order them sent represented by his agent. But in 142 THE LAW OF SALES Termination of Transit of Part of the Goods. — De- livery to the buyer, or his possessory agent, of a part of the goods does not necessarily put an end to the transit of the rest of a single shipment. If, however, the delivery of the part is of symbolic import from which can be im- plied a new contract under which the carrier holds the rest no longer as carrier for the seller, but as possessory agent — even though still a carrier — of the buyer, then the transit is at an end because the goods are in the actual possession of the buyer through the possession of his agent for that purpose.^** Transit as Affected by Acts of Outsiders.— The fact that the goods have been taken from the actual possession of the carrier, by some one other than the buyer or his agent, does not terminate the transit. The most usual case of this is the attachment by creditors of the buyer of goods still in the carrier's hands, and the consequent taking possession of them by the sheriff or other legal officer. It is uniformly held that such attachment and change of possession does not defeat the seller's right to retake in case of the buyer's insolvency. It makes the second case there is doubt, seller have not reached the pos- The spirit of the rule certainly session of anyone, other than the justifies stoppage in such a case, carrier, they must still be in tran- The goods are just as logically in sit to the buyer or his representa- transit from seller to buyer when tive. The authority is scanty, but the consignee is one to whom the what exists holds that the right buyer has sold them as when the to stop does not exist in such consignee is one whom the buyer cases. The theory of the decisions has authorized otherwise to repre- is not clear. Neimeyer v. Burling- sent him. There is no question ton, etc. R. R., 54 Neb. 321; Shep- involved of the equity of such sub- ard v. Burroughs, 62 N. J. L. 469; buyer, because the courts have Eaton v. Cook, 32 Vt. 58; Memphis consistently held that one who etc. R. R. Co. v. Freed, 38 Ark. buys from a buyer not in posses- 614; Treadwell v. Aydlett, 9 sion even of a bill of lading gets Heisk. (Tenn.) 388. no equity that will defeat the orig- 144 — Buckley v. Furniss, 15 inal seller's right to stop in tran- Wend. (N. Y.) 137; Tanner v. Bit. The question is, therefore, Scovell, 14 M. & W. 28; Ex parte solely one of the transit. Logi- Falk, 14 Ch. Div. 446; 7 App. Ca. cally, since the goods sent by the 573. THE SELLER'S RIGHTS 143 no difference at what time the debts of the attaching creditors accrued — unless they were misled by a bill of lading in the buyer's hands, a matter which is discussed hereaftcr.^'*^ If before the seller acts, the goods have been sold under the attachment proceedings, the right of the seller still attaches to the money in the hands of the court. ^*'' If the seller himself takes the goods on attachment against the buyer the result is not certain. It is said that by so doing he does not preclude a stoppage, since stoppage does not affect the buyer's title and is not inconsistent with attaching them as the buyer's goods. ^^'^ The stoppage in transitu does, however, revest the seller w^tli his lien, and it might w^ell be said that attach- ment is inconsistent with a lien.^*^ If, however, the goods should be taken from the carrier by the buyer himself, or his representative, the transit would have come to an end even though the destina- tion originally intended had not been reached.^** Carrier's Lien. — The seller's right to possession is subordinate to the carrier's lien for freight on the partic- ular shipment, although superior to a carrier's general lien for other freight. ^^° In this connection, an unusual 145 — Post, p. 221. But compare Fox v. Willis, 60 Tex. 146— O'Brien v. Norris, 16 Md. 373; Woodruff v. Noyes, 15 Conn. 122; Blum & Co. v. Marks, 21 La. 335. An. 268; Bayonne Knife Co. v. Um- 148 — See ante, p. 120. benhauer, 107 Ala. 496; Hepp v. 149 — Hays v. Mouille & Co., 14 Glover, 15 La. 461; Hause v. Jud- Pa. 48; Walsh v. Blakely, 6 Mont, son, 4 Dana (Ky.) 7, attaches to 194; Cabeen v. Campbell, 30 Pa. money made by sale; Smith v. 254; Halff v. Allyn, 60 Tex. 278; Goss, 1 Camp. 282; Calahan v. Mecham & Son v. N. E. R. R. Co., Babcock, 21 O. S. 281; Frame v. 48 Scot. L. R. 987, applying statute; Oregon Liquor Co., 48 Ore. 272, Whitehead v. Anderson, 9 M. & unaffected by sale of goods under W. 518. attachment proceedings; Hays v. 150 — Rucker v. Donovan, 13 Mouille & Co., 14 Pa. 48; White v. Kan. 251; Farrell v. Richmond, etc. Mitchell, 38 Mich. 390. R. R., 102 N. C. 390, 3 L. R. A. 647, But cf. Couture v. McKay, 6 general lien; U. S. Steel Co. v. Manitoba L. R. 273. Great Western Rr., L. R. 1 A. C. 147— Allyn v. Willis, 65 Tex. 65; 189, general lien. 144 THE LAW OF SALES case was decided by the English court in Booth Steam- ship Co. V. Cargo Fleet Co.^^^ The action was by the carrier against the seller to recover freight charges. The seller had ordered the delivery witliheld from the buyer, but showed no desire to get possession of the goods from the carrier. As the goods had been shipped in the name of the buyer and as his property, there was no contract for freight between the seller and the carrier. The buyer, however, was insolvent and, because of the stoppage, not entitled to possession, and the carrier's lien as against his goods for freight was practically worthless. The court treated the matter as ' ' a novel and interesting point of law, of some interest to carriers and merchants," mthout analogous precedent, and by viewing the merits of the case declared the seller to be liable. Exercise of Right. — An attempted stoppage by the seller gives him no right against the goods if, despite his attempt, they have come into the buyer's possession, at least in the absence of actionable wrong-doing of the buyer. That is to say, so far as the right of repossession of the goods is concerned, stoppage in transitu means an actual retaking of the goods before they reach the buy- er's possession, and not a mere attempt to retake pos- session.^^^ In the event of unsuccessful attempt, the seller must look to the carrier for recompense for the latter 's wrong- 151—115 L. T. R. 199. Mottram v. Heyer, 5 Denio (N. Y.) 152 — See authorities in preced- 629. Northey v. Field, 2 Esp. 613. ing notes. But in Litt v. Cowley, This position would be sound if 7 Taunton 168, it was precisely it were the rule that stoppage in held that the seller's attempt, by transitu, or an attempt to stop, notification to the carrier, to stop amounted to a rescission of the the goods amounted to such a res- contract. The accepted rule, how- cission of the contract as deprived ever, is that it does not revest title the buyer, to whom at^tual delivei-y in the seller but merely re-estab- was made, of the right of posses- lishes his lien, slon. Apparently approved in THE SELLER'S RIGHTS 145 ful action in delivering despite the seller 's order to stop. But to fix any such liabiUty on the carrier the seller must have given him notice not to deliver to the consignee. This proposition is so obvious and elementary that it seems to have given rise to no litigation. ^^^ The notice to the carrier need not be accompanied with a demand for possession ; mere notice not to deliver to the consignee is sufficient to bind the carrier.^^* The seller may of course give notice through his own agent, as in other cases,^^^ and **if the carrier is clearly informed that it is the intention and desire of the vendor to exer- cise his right of stoppage in transitu, the notice is sufficient "."« The notice must be brought home to the principal per- son in possession of the goods, but the customary rules of agency apply here and fix the relations of the various persons connected with the carriage and notice to an agent is notice to the principal. So, "notice to the agent of the carrier, who in the regular course of his agency is in actual custody of the goods at the time the notice is given, is notice to the carrier. ' '^" There is surprisingly little authority in respect to the mode of giving notice and the persons to whom and through whom it must be given. Beyond the fact that notice must be given to the carrier, whether individual or association, in possession of the goods, in reasonable time for it to get instructions to its employees to with- 153 — That the carrier is liable charge the carrier." Jones v. for delivery after notice to with- Earl, 37 Cal. 630; Reynolds v. hold it, see Rosenthal v. Weir, 170 R. R., 43 N. H. 580. N. Y. 148, and this liability is founded in tort, regardless of the contract for carriage. Booth 155— Reynolds v. R. R., 43 N. H. 580; Newhall v. Vargas, 13 Me. 93, notice by unauthorizd agent Steamship Co. v. Cargo Fleet Iron ^„„ , „ ^„*-«..j. /->u j, t-. i may be ratified Chandler v. Ful Co., 115 L. T. R. 199, 201; The Tigress, 8 L. T. R. 117; Pontifex ton, 10 Tex. 2, 60 Am. Dec. 188; ^. „ Whitehead v. Anderson, 9 M. & W. V. Midland Ry., 3 Q. B. Div. 23. g^,^ 154 — "A notice by the vendor, without an express demand to re- 156- Jones v. Earl, 37 Cal. 630. deliver the goods, is suflScient to 157 — Jones v. Earl, 37 Cal. 630. 146 THE LAW OF SALES hold delivery, nothing definite can be said. As to what employees can receive notice so as to bind the employer; when notice given to one carrier will bind another car- rier cooperating in the transit; how far the carrier is obliged to notify another; what is reasonable time; and kindred matters, the accepted rules of agency are undoubtedly guiding analogies."^* Effect of Stoppage.— The effect of a stoppage in transitu was at one time in some doubt and some early decisions are in marked conflict with the later ones. There was among the former a tendency to treat a stop- page, even without actual retaking of possession, as a rescission of the contract, whereby the title was auto- matically revested in the seller.^^^ The rule now accepted, however, is without question that neither an attempted nor accomplished stoppage is a rescission of the contract, but that the right to stop delivery and retake possession is a m.ere extension of the seller's lien, that is to say, of his right to retain possession till paid. The history of this rule is discussed in Babcock v. Bonnell,^^*^ and the conflict of authority pointed out. In conclusion that court says, "The question has never been, that I am aware, definitely decided in this State. As an original question the doctrine of rescission commends itself to my judgment as being more simple, and, in most cases, more just to both parties than the notion that the act of stop- page is the exercise of a right of lien, but in deference to the prevailing current of authority, I should hesitate in attempting to oppose it by any opinion of my own. ' '^^^^ 158 — Time must be allowed for 159 — Ante, p. 144. the notice to be passed on from 160 — SO N. Y. 244. the person receiving it to the 161 — Resumption of lien, only, person actually in control of Chandler v. Fulton, 10 Tex. 2; the goods, Whitehead v. Anderson, Allyn v. Willis, 65 Tex. 65; Dough- 9 M. & W. 517. erty Bros. v. Central National Bk., ♦See Uniform Sales Act, Section 59, (1), (2). tSee Uniform Sales Act, Sections 57, 61. THE SELLER'S RIGHTS 147 Since stoppage in transitu merely reinstates the seller in the position of a lienor, his rights thereafter are iden- tical with those already discussed as appertaining to an unpaid seller's lien and need not be again set out here.^^* 4. Neither Title nor Possession Retained ' Recovery of Price. — When the seller has parted with both title and possession he has the same right to sue the buyer for the purchase price as in any case when the title has passed.^^^ Recovery of Possession. — He has no longer, however, any right at all in respect to the goods themselves. All his right of possession has ceased with his loss of actual possession. Though the buyer may flatly refuse to pay and even though he may have become insolvent and un- able to pay, the seller can not retake possession, in the absence of fraud.^^* This is true even in equity ;^^^ and even though the buyer was insolvent at the time the con- tract was entered into, and knew himself to be insolvent, the seller who has parted with both title and possession can not retake the goods. ^^^ The whole idea is that the buyer has become the owner of the property and the seller a mere creditor to the 93 Pa. 227; Jordan v. James, 5 v. Lewis, 218 Pa. 141; Thompson O. 88, 99; Newhall v. Vargas, 13 v. Conover, 32 N. J. L. 466, even as Me. 93; Diem v. Koblitz, 49 O. S. to goods delivered in part per- 41; Kearney v. Union Pac. Rr. Co., formance only; Makaness v. Long, 97 Iowa 719, 59 Am. St. 434. 85 Pa. 158; Neal v. Boggan, 97 162-See ante, p. 122. ^^^- ^^^' Holland's Assee. v. Cin- cinnati Co., 97 Ky. 454. 163— See ante, p. 109. He is not 165— Godwin v. Phifer, 51 Fla. limited to the actual value of the 442. goods. Brown v. Harris, 139 Mich. I66— Bell v. Ellis, 33 Cal. 620; 2'^2- Houghtaling v. HiHs, 59 Iowa 287; 164— Smith Lumber Co. v. Scott Franklin Sugar Co. v. Collier, 89 County Co., 149 Iowa 272, 30 la. 69; Freeman v. Toplds, 1 Marv. L. R. A. (n. s.) 1184; Kramer v. (Del.) 174; Walsh v. Leeper Co., Messner, 101 Iowa 88; Thomp- Tex. 50 S. W. 630; Talcott v Bon V. Wedge, 50 Wis. 642; Freeh Henderson, 31 O. S. 162. 148 THE LAW OF SALES amount of the purchase price. As the seller has no pos- session of the goods, he is in no better position than is any other creditor. He is simply an unsecured creditor with the rights and remedies of all unsecured creditors. ^^' Recovery of Value of Goods. — The seller can not in such circumstances sue even for the value of the goods. He has become entitled to the purchase price, as a debt owing from the buyer, and he is restricted to the cus- tomary methods of suing on account of this debt.^^^ If, however, the seller has only in part performed an entire contract at the time of the buyer's breach, he is not yet entitled to the full purchase price. In such case, if he does not choose to sue simply for his damages for breach of contract, he may bring an action, on the order of quasi-contract, for the actual value of such goods as have passed to the buyer.^^^ Rescission Because of Fraud. — ^When, however, the sale has been induced by the fraud of the buyer, the seller can rescind the whole transaction and revest title to the property in himself, and having revested title in himself he can maintain replevin or otherwise repossess himself of the goods, as owner. When the issue is between the seller and buyer, with- out relation to third persons, the courts seem to be in some confusion as to whether or not the effect of the fraud is such as to make the sale void, so that no title at all ever passed to the buyer, or merely voidable, so that title 167 — This has been ameliorated 168 — Woodward, Quasi C o n- by statute in some states to the tracts, sec. 263. extent of providing that statutory 169 — Wilson v. Wagar, 26 Mich, exemptions shall not apply to 452; Willston Coal Co. v. Frank- property for the purchase price of lin Paper Co., 57 O. S. 182; which the judgment was secured. Thompson v. Gaffey, 52 Neb. 317, Howell V. Crawford, 77 Ark. 12; option to sue for breach of con- Roach V. Johnson, 71 Ark. 344, tract or quantum valebit; U. S. right to sequester pendente lite; v. Molloy, 127 Fed. 953; Bartholo- Bartou v. Sitlington, 128 Mo. 164. mew v. Markwick, 15 C. B. (n. s.) 711, 109 Eng. Com. L. 711. THE SELLER'S RIGHTS 149 does pass to the buyer but subject to defeasance by the seller if he so desires. It is very common expression of the courts to refer to the sale as "void", but often, too, it is spoken of as "voidable". It is in fact, however, treated as "void" in many decisions, notably those which allow a suit in replevin to be maintained without any formahty of rescission, even by way of demand upon the buyer.^'^'^ On the other hand, it is very evident in some cases that, even as between the parties, the courts consider a title to have passed, subject to defeasance.^'^ Such are the cases in which it is held that a defrauded seller who might, on account of the fraud, have rescinded the contract has lost his right to repossession of the goods because of undue delay in acting. The courts do not give specific reasons for this, but the only harmoniously logical basis for it must be that title passed by virtue of the original contract; that the right to defeat it was lost by the delay and not that it passed by the delay. ^""^ That title did pass by virtue of the agreement, although sub- ject to avoidance, must be the basis also of those cases recognizing suit for the purchase price as an affirmance of ih.e buyer's title; and of those similar cases in which the seller is held to have "ratified" the contract so as to fix title in the buyer.^''^' The net result appears to be that, as between the par- 170 — Butters v. Haughewat, 42 Missouri Pac. R.R., 52 Mo. Ap. 407; III. 18; Oswego Starch Co. v. Len- McDonald v. Goodkind, 22 Mont, drum, 57 Iowa 573; Root v. 491; Smith v. Chadron Bank, 45 French, 13 Wend. (N. Y.) 570; Neb. 444; Wertheimer etc. Co. v. Hunter v. Hudson River etc. Co. Faris, Tenn., 46 S. W. 336; Load 20 Barb. (N. Y.) 493; Loeffel v. v. Green, 15 M. & W. 216. Pohlman, 47 Mo. Ap. 574. 173— Moller v. Tuska, 87 N. Y. 171— When the rights of third 166; Conrow v. Little, 115 N. Y. persons are under consideration 387; Little Rock Bk. v. Frank, 63 there is no doubt but that the Ark. 16; Gallup v. Fox, 64 Conn, transaction is considered as hav- 491; Mapes v. Burns, 72 Mo. Ap. ing passed a title. See jyost. p. 225. 411; Chadron Natl. Bk. v. Tootle, 172— World Pub. Co. v. Hull, 81 59 Neb. 44; Seeley v. Seeley-Howe Mo. Ap. 277; Johnson etc. Co. v. Co., 130 Iowa 626. 150 THE LAW OF SALES ties, the court will treat the title as not having passed at all if the seller wishes it so treated, and acts thereon in time, or as having actually passed, if the seller desires so to consider it.^'* What Constitutes Fraud. — ^What acts of the buyer will amount to a fraud upon the seller is a question of law to be decided by the court; whether those acts were in truth committed by the buyer is a question of fact for the jury.^'^ As we have already seen, mere concealment of insolvency is not of itself such fraud as will permit rescission.^'^ An intent, existing at the time of purchase, not to pay for the goods is, however, such fraud. The intent must be not to pay at all. "A mere intent not to pay for the goods when the debt becomes due is not enough; that falls short of the idea. The inquiry is not whether the buyer had reasonable grounds to believe he could pay the debt at some future time, and in some way, but whether he intended in point of fact not to pay it."^''"' If he did not intend to pay, there is such fraud as will justify rescission.^''^' And the fact that a buyer knows he is insolvent at the time of purchase mil be considered as evidence in respect to his intention. It ''bears upon the question of quo animo, the intent, the fraudulent purpose.""^ 174— Clough V. London & Nw. 175— Freeman v. Topkis, 1 Marv, Ry. Co., L. R. 7 Ex. 26, p. 34. It (Del.) 174. should be noted that the seller can 176 — Ante, p. 147. not so far treat the transaction as 177 — Burrill v. Stevens, 73 Me. void but that he must return to 395. the buyer, before he can insist on 178 — Osvi^ego Starch Factory v. possession of the goods sold, what- Lendrum, 57 Iowa 573; Belding v. ever of value he has received. Frankland, 8 Lea (Tenn.) 67; Doan V. Lockwood, 115 111. 490; Hennequin v. Naylor, 24 N. Y. Moriarity v. Stofferan, 89 111. 528. 139; Talcott v. Henderson, 31 O. But an unnegotiated note is not S. 162. considered as a thing of value in 179 — Rowley v. Bigelow, 12 Pick, this sense, Thurston v. Blanchard, (Mass.) 307; Talcott v. Hender- 22 Pick. (Mass.) 18; Nichols v. son, 31 O. S. 162; Belding v. Michael, 23 N. Y. 264. Frankland, 8 Lea (Tenn.) 67. THE SELLER'S RIGHTS 151 While mere concealment of insolvency is not fraud, any positive misrepresentation, either express or by implication, may amount to fraud."° This is true even though the buyer be really solvent."^ Misrepresentation in respect to financial condition is, of course, not the only fraud that will make a sale void- able. This is simply the most frequent type of case. In general, any actual fraud in the inducement of the con- tract will permit of its rescission. 180— Schweizer v. Tracy, 76 111. 345; Weitheimer etc. Co. v. Faris, Tenn., 46 S. W. 336; Skinner v. Michigan Hoop Co., 119 Mich. 467; Seeley v. Seeley-Howe Co., 130 Iowa 626. 181 — Richardson etc. Co. v. Goodkind, 22 Mont. 462. CHAPTER IV Buyer's Remedies and Rights 1. Neither Title nor Possession Acquired The discussion of the seller's rights and remedies has necessarily suggested the lack of right in the buyer which is the converse of the seller's rights. Obviously, for instance, if the seller has a right of continued possession until payment, the buyer has no right of possession until payment. Likewise, whenever the seller has no right to rescind a sale and take back the goods because of non- payment the buyer has a right to keep the goods with- out paying for them. These so obvious converse rights need not be repeated by positive expression. On the other hand, a discussion of other rights and remedies of the buyer will develop by their implied converse cer- tain lack of right in the seller which was not referred to under the particular topic heading. Breach of Contract. — If neither title nor possession has passed to the buyer, he has acquired no right in respect to the property itself. If the seller fails to perform according to the terms of the contract, the buyer is lim- ited to an action against him personally for breach of contract. Having no title, the buyer can not bring replevin or other possessory action on the ground of title, and the law recognizes no other right of possession as a result merely of the contract of sale.* Even equity 1— Deutsch V. Dunham, 72 Ark. contract, by refusing or failing to 141; Backhaus v. Buells; 43 Ore. give the plaintiffs possession of 558; Chellis v. Grimes, 72 N. H. the property ♦ * * did not trans- 104, "The mere fact that defend- fer the title to the plaintiffs. Their ants committed a breach of their refusal to deliver the property was 152 THE BUYER'S RIGHTS 153 will not grant specific performance except in certain cases of sale of an absolutely unique chattel.** Measure of Damages. — If the buyer does sue for breach of contract his measure of damage is, in accord with the general rule of damages, the sum which mil put him in the same position financially as though the contract had been carried out. But this basic principle is, as usual, modified by the rule that the buyer must mitigate his damage so far as possible and must accordingly be pre- sumed to have protected himself as soon after the seller's breach as he could reasonably be expected to do and by all reasonable means. Accordingly, the measure of his damage will be the difference between the price at which the seller had contracted to sell and the price at which the buyer could buy precisely similar goods in the market within a reasonable time after his knowledge of the seller's breach.'* not equivalent to a performance on their part. * * * Nor did the plaintiffs have the legal right of possession, since that right fol- lowed the title, which they never had." Carpenter v. Glass, 67 Ark. 135; Platter v. Acker, 13 Ind. Ap. 417; Gibson v. Roy, 28 Ky. L. R. 444. 2 — There is some conflict, how- ever, as to whether or not equity will decree specific performance In cases where the buyer has paid his money and the seller has be- come Insolvent. Livesley v. Johns- ton 45 Ore. 30, "When, therefore, an award of damages would not put the party seeking equitable re- lief for the delivery of personalty In a situation as beneficial as if the agreement were specifically performed, or where compensa- tion and damages would fall short of the redress to which he is en- *See Uniform Sales Act, Section titled, the jurisdiction (of equity, for specific performance) is prop- erly invoked, otherwise not. * * * Insolvency of the party against whom relief is sought, standing alone, will not confer jurisdiction to enforce specific performance. * * * The fact of insolvency, when combined with other causes for equitable interposition, may, however, become a potent or even controlling factor in determining the fact of jurisdiction." As to unique chattels see, Lowther v. Lowther, 13 Ves. 95, painting; Falcke v. Gray, 4 Drew. 651 ; Pusey V. Pusey, 1 Vern. 273. 3 — Saxe v. Penokee Lumber Co., 159 N. Y. 371; Austrian & Co. v. Springer, 94 Mich. 343; Goodrich V. Hubbard, 51 Mich. 530; Grand Tower Co. v. Phillips, 23 Wall. 471, price at nearest available place of purchase plus increased cost of 68. 154 THE LAW OF SALES This rule is based on the assumption that the buyer could purchase similar goods on the market reasonably- soon after the breach, and thus protect himself from damage naturally consequent upon his failure to receive the goods from the seller. If, however, he could not procure similar goods soon enough with reasonable effort, the rule of damages as stated could not be applied. In such case the amount of damage would be the finan- cial loss, at least, resulting as a normal consequent upon the seller's failure to perform. But the burden of proof that similar goods could not have been reasonably pro- cured is on the plaintiff. As illustration, in Parsons v, Sutton* the claim was that Parsons had contracted to sell to Sutton certain paper to be used for printing a frontispiece for a magazine; that Parsons had failed to furnish it at the time agreed; that Sutton could not get other paper like it and had therefore to print his maga- zine without a frontispiece; and that because of this he had suffered financial loss in decrease of circulation, waste of printed matter which was to have accompanied the frontispiece and other normally consequent results, 'the court stated that ''the ordinary rule of damage * * * is the difference between the contract price and the market price at the time and place of delivery. When the buyer can go into market and buy the article which the seller has failed to deliver, this is the only rule, as it offers the buyer full indemnity." The court further rec- ognized that "special damages are allowed when this rule will not furnish full indemnity. If there is no market for the article where it is to be delivered, and it can not be had there with reasonable diligence, and the buyer suffers transportation; Schmertz v. Dwy- As to delivery by installments, er, 53 Pa. 335; David v. Witmer, see Long Pole Co. v. Saxon etc. 46 Pa. Super. 307; Tuttle etc. Co. Co., 108 Va. 497; Hewson-Herzog V. Coaldale Co., 136 Iowa 382; Co., v. Minnesota Brick Co., 55 Holliday v. Hyland, 43 Ind. Ap. Minn. 530. 342; Crescent Mfg. Co. v. Slattery, 4—66 N. Y. 92. 132 La. 917. •«ee Uniform Sales Act, Section 67, (1), (2), (3). THE BUYER'S RIGHTS 155 damage because of the seller's failure to deliver, which is the proximate and natural consequence of such fail- ure, such damage can be recovered." But the buyer **must not, by inattention, want of care or excusable negligence, permit his damage to grow and then charge it all to the other party." In the particular case, Parsons was ready to deliver a few days after the time set, and there was no positive showing that delivery at that time would have been too late. Furthermore, the court said, "There is no proof that such paper as this contract called for is not usually to be found in the market, or that it could not, in the small quantity required, be delivered in a few days by manufacturers. All (Sutton) did was to go to deal- ers in paper a day or two after (the date for delivery) and try to buy paper like that which (Parsons) was to deliver, and they could find none. It does not appear that they made any further efforts. It does not appear that they could not find paper which would answer sub- stantially the purpose. No reason is given why they did not try more than once to find the paper. ' ' Accord- ingly the court refused to allow recovery of the special damage. The case demonstrates clearly the breadth of the rule that, in general, only the difference between the contract price and the price at which the buyer can secure similar goods can be recovered as damage for the breach. ' ' Very rarely, indeed, can there come a case where the vendee suffers special damages if, at the time and place of delivery, there was a market value for the article purchased by him. A market value at a given place presupposes that merchandise of that character was at that time and place sold or offered for sale, and thus the opportunity is presented the vendee of bujang the article in the open market to be used for the special purpose intended, and of recovering of the defendant the differ- ence between such market value and the contract price. ' '® 5 — Saxe v. Penokee Lumber Co., 159 N. Y. 371. 156 THE LAW OF SALES But the buyer need only act reasonably in protecting himself after the seller's breach. Thus, in Austrian & Co. V. Springer,® the seller announced early in May that he would not be able to fulfill his contract, which called for shipment on May 15th. The contention of the defend- ant, the seller, was that the price of glass in May was lower than in June, during the latter part of which the plaintiff had protected himself by purchasing similar goods. Evidence showed, however, that while dealers would give a "market price" during May and early June, they would not agree actually to furnish goods at such prices ; in short, that dealers were dodging definite orders in expectation of a rise in price. This the court held sufficient to justify fixing the measure of damages by the market prices of late June or July. The ''market price" means market price at which the buyer could purchase. In reversing a case because the trial court had instructed the jury to allow the plain- tiffs the difference between the contract price and the ''wholesale" price at time of breach, the Supreme Court said, "The question is not one of wholesale price or retail price, and an instruction to measure the damage by either might be erroneous. The true test of proper compensation in such cases is what it would have cost the plaintiffs to procure at the point of dehvery and at the time or times when it was reasonable for them to supply themselves, lumber of the kind and quahty they were to receive on the contract. * * * So large an amount of lumber as was covered by this contract, they might, perhaps, have been able to procure at cargo prices ; but we have no right to presume this, and if it were imprac- ticable to supply themselves, except at retail rates, they were entitled to demand those rates of defendants."'' Similarly it has been held that if the buyer has actually protected himself by a purchase below the reported "market value" he can recover only the difference 6—94 Mich. 343. 7— Haskell v. Hunter, 23 Mich. 305. THE BUYER'S RIGHTS 157 between the contract price and what he actually had to pay.8 For a full discussion of the amount and proof of dam- age the reader is referred to works on damages. The discussion here is necessarily incomplete and is intended only to cover the broad principles, and the citations, while chosen to present as wide a variation of circum- stances as possible, do not touch every type of case. Recovery of Money Paid. — If the buyer has already paid a part of the price, or all of it, he may still, upon the seller's failure to pass title, sue to recover compensation for damage from the breach of contract.^ But, further- more, he may disregard damages as such, which might be more or less than the exact amount of the purchase price, and sue specifically to recover the money which he paid.^° If he has received a part of the goods, and the amount of the purchase price which they represent is not definitely fixed by the contract, he must return such part before he is entitled to recover anj^thing in such a suit." Inspection Before Accepting Title. — Although the buyer who has not received title cannot compel the seller to pass the title, on the other hand, he can not be made to take title to goods which he did not agree to buy. If the seller tenders goods which the buyer did not contract for, the buyer is in no way guilty of breach of 8— Arnold v. Blabon, 147 Pa. 10— Joyce v. Adams, 8 N. Y. 291; 372, approved in Theiss v. Weiss, Hayes v. Stortz, 131 Mich. 63; 166 Pa. 9. WiUiams v. Allen, 10 Humph. 9 — In such case the amount of (Tenn.) 337; Altschul v. Koven, recovery w^ould be adjusted to 94 N. Y. S. 558; Dalton v. Bentley, cover what he had paid; if he had 15 111. 420, but he can not maintain paid the full price, his recovery both actions; Meader v. Cornell, would be the full market value, 58 N. J. L. 375; Cleveland v. Ster- Instead of the mere difference be- rett, 70 Pa. 204. tween the two. Hill v. Smith, 32 11— Miner v. Bradley, 22 Pick. Vt. 433; Winside Bank v. Lound, (Mass.) 457; Clark v. Baker, 5 52 Neb. 469. Mete. (Mass.) 452. 158 THE LAW OF SALES contract if he refuses to accept them, nor, of course, is the buyer liable to pay for them. ''The delivery of prop- erty corresponding with the contract is a condition prece- dent to the vesting of the title in the vendee. The par- ties understand that the vendee is not bound to accept the property tendered, except upon this condition. * * * The latter is not bound to receive and pay for a thing that he has not agreed to purchase. * * * "^^ When the contract has been in regard to a described, but not specifically identified, chattel, title, as we have seen, can not pass because of the lack of identity of the chattel. When thereafter the seller selects a particular chattel as the one to which he intends to pass title accord- ing to the contract, this of itself does not thrust title upon the buyer. He, the buyer, still has a right to say whether or not he mil take the title. If what the seller offers is just what the buyer agreed to take, it will be a breach of contract for the buyer to refuse the title. But if what the seller offers is not what the buyer agreed to take, obviously the buyer is not at fault in refusing title to it.* Right to Inspect. — The buyer can not be compelled to accept or refuse title until he has had opportunity to see what the seller offers. This is obvious justice. Were he compelled to accept title to whatever unseen thing the seller should offer he might find himself saddled with title to what he did not contract for. On the other hand, were he to play safe, by refusing the proffered title, he might be guilty of breach of contract. There- fore the law allows him an opportunity to see what the seller offers before it mil hold him guilty of breach of contract for refusing to accept title to it. This is often called the right of inspection. f 12— Reed v. Randall, 29 N. Y. 361; Chanter v. Hopkins, 4 M. W. 399. •See Uniform Sales Act, Section 11, (1), (2). tSee Uniform Sales Act, Section 47, (1), (2). THE BUYER'S RIGHTS 169 Thus, in Charles v. Carter,^^ the plaintiff, who had contracted to sell potatoes to defendant, sued for dam- ages for breach of contract, because the defendant had refused to receive the potatoes from the carrier and refused to pay for them. The contract was for potatoes not specifically identified at the time. On shipment the plaintiff took a bill of lading in his own name and, as the court held, thereby kept title in himself. The defend- ant was notified of the arrival of the shipment and signi- fied his willingness to take the title and possession, and to pay the price, if an inspection of the potatoes showed them to be such as he had contracted for. The privilege of inspection was refused by the railroad company and the defendant refused to receive the potatoes. The court held, that, if these circumstances were found as facts by the jury, the defendant was not guilty of a breach of contract, saying, as a proper instruction to the jury, **If you find that the conduct of the plaintiff and his agents at Kansas City was such that they de- clined and refused to permit an inspection of the pota- toes by the defendant within a reasonable time after their arrival in Kansas City, and an inspection thereof was, in consequence, not made, then it was no longer the duty of the defendant to take such potatoes".^* Expense of Inspection. — The inspection of goods to ascertain if they are in fact what the contract of sale, or its correlated contract of warranty, stipulates they shall be, is a right of the buyer. But it is solely for his benefit as a matter of protection. There is no force- ful reason why the seller should pay the expense incurred 13 — 96 Tenn. 607. he had an opportunity to inspect it 14 — Livesly v. Johnson, 45 Ore. in order to ascertain whether it 30; Harper v. Baird's Admr., 3 was such as appellees stipulated Penna. (Del.) 110; Deutsch v. to saw." Osborn v. Gantz, 60 Dunham, 72 Ark. 131, "The con- N. Y. 540; Croninger v. Crocker, tract being executory, it is clear 62 N. Y. 151; Lorymer v. Smith, that appellant could not be com- 1 Barn. & Cress. 1, polled to accept the lumber until 160 THE LAW OF SALES by the buyer in thus protecting himself. If he tenders the precise goods contracted for, in the manner agreed upon, he has performed his contract. If the buyer chooses to go to expense in making sure of this per- formance, it is the buyer's right to do so, but it should also be at his cost. This seems to be assumed as the rule, since no attempts by a buyer to recover such expense are found in the cases.*^ There are, however, some cases in which inspection has revealed that the seller did not perform his contract, in which the buyer has been allowed to recover the cost of the inspection. The theory of this recovery — whether on the ground of damages from the seller 's breach, quasi- contract, or otherwise — is not clear. The results are obviously just, at least. If the examination develops the fact that the seller has not performed his contract, but is guilty of a breach, any damage which the buyer suffered by the breach is, logically, recoverable. Damage suf- fered through use of an article which does not conform to the terms of the contract, before that non-conformity is discovered, should come mthin this rule. So also, even if there be no damage from use of the defective article, the expense to which the buyer has reasonably put him- self on the supposition that the seller has properly per- formed should be recoverable, as a consequence of the seller's breach.^^ 15 — In Lincoln v. Gallagher, 79 apparently as damages from the Me. 189, there is a dictum to the seller's breach of the contract of effect that the seller must bear sale. the expense of providing the buy- In ascertaining whether the er with a reasonable opportunity goods do conform to the contract to inspect. or not, it may happen that the 16— That this is the rule, is in- buyer will necessarily have used dicated in Ruben v, Lewis, 46 N. or otherwise have destroyed a cer- Y. S. 426, buyer's expense for tain amount of the goods tendered, transportation held recoverable; If the goods should turn out not to Stafford v. Pooler, 67 Barb. (N. Y.) conform to the agreement and the 143, limited to necessary ex- buyer should therefore reject penses; Phila. Whiting Co. v. De- them, question might arise as to troit Lead Works, 58 Mich. 29. the seller's right to compensation THE BUYER'S RIGHTS 161 Waiver of Right. — The buyer may waive this right of inspection if he chooses. That is, he may accept the title without looking at the goods, or he may refuse the title without claiming an opportunity to inspect. In the one case he gets title to the goods whether they con- form to the contract or not ; in the other, ho is guilty of breach of contract if thoy do conform to the contract. But he can not be deprived of the opportunity nor legally refused it. Effect of Seller 's Delivery to a Carrier. — The mere fact that the goods, as specified by the seller, were ac- cepted by a carrier for delivery to the buyer does not imply any intent on the buyer 's part to accept them, nor any legal (constructive) acceptance by him, unless they do conform to the conditions of the contract. We have seen that if goods conforming to the terms of the contract are delivered to a carrier for the buyer, title, if not already passed, is presumed to pass then. If the theory behind this passing of title be, as w^as suggested in that discussion, that the carrier is legally the agent of the buyer to accept title, then the carrier might also be the buyer's agent to inspect. But whether this be so, or not, the carrier is not so far the buyer's agent that receipt of goods which are not the ones contracted for will vest title in the buyer. It can not be dogmatically stated whether this right of inspection does not exist when proper goods are delivered to a carrier, or whether it does exist and is exercised by the carrier as the buyer's for those destroyed. In Philadel- course, that he could not recover phia Whiting Co. v. Detroit Lead the contract price, as such. His Works, 58 Mich. 29, the court said right to recover in quasi-contract specifically that in such case the appears not specifically to have seller "would be liable for all been decided, except in the case necessary charges and expenses just mentioned, and the analogous in testing the article", and held propositions in quasi-contracts are that he could not recover the value themselves so much in dispute as of the goods used in making the to leave that authority an open test which showed the seller's queston. breach of contract. It is clear, of 162 THE LAW OF SALES agent. But at least it seems reasonably clear that title passes on delivery of proper goods to the carrier, with- out further act on the buyer's part; and that title does not pass on delivery to the carrier of goods which are not those contracted for. ''To constitute a delivery to the carrier a delivery to the consignee so as to pass the title and make the consignee hable for goods sold and deliv- ered, the goods must conform in quantity as well as qual- ity with those named in the order. ' '^' Hence, if the goods 17 — Barton v. Kane, 17 Wis. 38; Diversey v. Kellogg, 44 111. 114; Pierson v. Crooks, 115 N. Y. 539. Occasional dicta Imply that some sort of a "conditional title" does pass on delivery to a carrier, which may be "rescinded" by the buyer. Kuppenheimer v. Wert- heimer, 107 Mich. 177; Magee v. Billingsley, 3 Ala. 679. This proposition is not logi- cal. The whole theory of the law is that title can not be vested in a buyer without his consent. His agent, the carrier, has no author- ity to assent to title in anything but the goods contracted for. The buyer himself cannot logically be said to have assented to taking title in goods not contracted for until he has had a chance to learn that other goods than those con- tracted for have been offered to him. If the proper goods have been offered, the buyer's inspec- tion does no more than verify the validity of the carrier's assent. But if other goods have been delivered the buyer's inspec- tion is the first opportunity for his assent to be given at all; until such inspection there is no assent, and without assent there can not logically be title in the buyer. The inaccuracy of the state- ments referred to is further indi- cated by the case of Gardner v. Lane, 12 Allen (Mass.) 39. One Wonson had contracted to sell to the plaintiff 131 bbls. of jjl mack- erel. On pretended performance of this contract he delivered to plaintiff a number of barrels, which in fact contained 83 mack- erel and some which contained no mackerel at all but only salt. At a proper time the plaintiff exam- ined the barrels and elected to take title to the goods despite non- conformity with the contract. Be- fore this inspection, however, though after the delivery to the plaintiff, the defendant, as a credi- tor of Wonson, had levied on the goods as Wonson's property. The court held that it was Wonson's property at the time of the levy, despite the plaintiff's possession of it and his subsequent willing- ness to keep it, because at that time the plaintiff had never con- sented to the vesting of title in him. Accord, Alamo Cattle Co. v. Hall, 220 Fed. 832; Dube v. Lib- erty Clothing Co., 153 N. Y. S. 577, 91 Misc. 64. Of course, if the goods delivered to the carrier do conform to the terms of the contract, title passes at that time, not because the sell- er can thrust even a temporary THE BUYER'S RIGHTS 163 selected by the seller and consigned to the buyer are found on inspection not to conform to the terms of the contract, the buyer may refuse to accept them, or to pay for them, on the ground that he did not buy them." Waiver Through Delay. — Even if the buyer him- self receives possession of them, he is not presumed to have waived their non-conformity with the contract and to have taken title anyhow, until he has had a reasonable time and opportunity to find out that they do not con- form to its terms. ''And what is a reasonable time is usually a question of fact, and not of law, to be determined by the jury upon all the circumstances, including as well the situ- ation and liability of injury to the vendor from delay as the convenience and necessities of the vendee."^® In the particular case from which the quotation is taken, the delay in examining the quality of iron in certain hoops was ten days after the carrier had unloaded them, and the court said, this *Svas not so great that the court can say, as a matter of law, that it was unreasonable, and we are concluded by the finding of the referee from re-examining the question of fact." In Philadelphia Whiting Co. v. Detroit Lead Works^° the sale was whiting, to be of the best quality for use in making putty. The title on an unwilling buyer, but That this last proposition is cor- because the carrier, as buyer's rect, see, Skinner v. Griffith & agent, accepts the title. If one Sons, 80 Wash. 291, 141 Pac. 693. accepts the theory of the carrier's 18 — Livesly v. Johnston, 45 Ore. agency to accept title to goods 30; Diversey v. Kellogg, 44 III. which conform to the contract — 114; Pierson v. Crooks, 115 N. Y. and this is the only theory which 539; Scranton v. Mechanics Trad- the decisions will harmoniously ing Co., 37 Conn. 130; Croninger v. support — there is nothing incon- Crocker, 62 N. Y. 151, tender of sistent in the proposition that goods to which the seller's title title to goods not conforming to was defective; Columbian Iron the contract does not pass at all Works v. Douglass, 84 Md. 44; until the buyer's inspection and Fogel v. Brubaker, 122 Pa. 7. acceptance, but that title to goods 19 — Pierson v. Crooks, 115 N. Y. which do conform to the contract 539. passes on delivery to the carrier. 20 — 58 Mich. 29. 164 THE LAW OF SALES buyer received the shipment and used 42 barrels, out of the 300 bought, at the rate of 3 or 4 per day. After such use the buyer began to receive complaints as to the quality of its putty and thereupon notified the seller that it would hold the remaining barrels as the seller's property. The court held that it had been prop- erly left to the jury to say whether or not the duration and character of the examination were reasonably necessary to determine the quality of the whiting, and that if the jury found that such examination was reason- able, the buyer had not lost its right to refuse title to the rest of the goods.^^* If the court, or jury, decides that the buyer has kept the goods tendered for an unreasonable time, without inspecting them or objecting to them, then it is assumed that he has chosen to keep them despite the difference between what they are and what they should have been. ''The delivery of property corresponding Avith the con- tract is a condition precedent to the vesting of the title in the vendee. The parties understand that the vendee is not bound to accept the property tendered, except upon this condition. * * * The latter is not bound to receive and pay for a thing that he has not agreed to purchase ; but if the thing purchased is found on examination to be unsound, or not to answer the order given for it, he must immediately return it to the vendor, or give him notice to take it back, and thereby rescind the contract, or he Avill be presumed to have acquiesced in its quality. "^^ 21 — Reuben v. Lewis, 46 N. Y. if the retention of possession is S. 426; Saunders v. Jameson, 2 perfectly consistent with the idea C. & K. 557; Gordon v. Waterous, of the buyer's rejection and of title 36 Up. Can. Q. B. 321, delay justi- still resting in the seller. Thus, fled by fact that, seller having in Blackwood v. Cutting Packing failed to deliver as expected, buy- Co., 76 Cal. 212, the buyer's acts er had secured other goods and did not preclude him from denying had no reason to open seller's title, because they had been ac- packages at once. companied with a notice that he 22 — Reod v. Randall, 29 N. Y. was acting in the seller's interest 361. This result does not follow only. Cf. Zabriskie v. Central *See Uniform Sales Act, Section 48. THE BUYER'S RIGHTS 165 A pointed illustration is the case of Cream City Gas Co. V. Friedlander.2^ The plaintiff sued to recover money it had paid defendant for certain soda ash. The ash when delivered was inspected by the plaintiff and found not to conform to the implied terms of the contract and the plaintiff notified the seller that it would not accept. Thereafter, however, the plaintiff ''made a prac- tical test of the material by trying to make glass there- from, ' ' and demonstrated that it did not accord with the contract terms. This action, the court held, amounted to an acceptance of the ash and precluded the plaintiff from rejecting it. ''It seems clear," said the court, "that the plaintiff was entitled to a reasonable time after actual receipt of the material to exercise the right of rejection in case the goods did not conform to the contract. If this fact could only be ascertained by a practical test, the plaintiff also had the right, mthin such reasonable time, to make such practical test, using only so much of the material as was reasonably necessary for the purpose, mthout thereby losing the right of Vermont R. R., 131 N. Y. 72; Gold some of them held an acceptance. Ridge Mining Co. v. Tallmadge, Pullman Car Co. v. Metropolitan 44 Ore. 34. Rr. Co., 157 U. S. 92; Coplay Iron As to the presumption of accept- Co. v. Pope, 108 N. Y. 232; Fisher ance of the goods as tendered, see v. Samuda, 1 Camp. 190; Doan v. also, Barton v. Kane, 17 Wis. 38, Dunham, 79 111. 131; Titley v. "When goods prove defective in Enterprise Co., 127 111. 457; quality, it is, in general, incumbent Thompson v. Libbey, 35 Minn. 443. on the purchaser to notify the In Diversey v. Kellogg, 44 111. seller of his non-acceptance on 114, it is suggested that the reten- that ground, else he is deemed tion of the goods would make the to waive the objection, and to con- buyer liable for their value, as dis- sent to keep and pay for them ac- tinct from their contract price, cording to the terms specified. In 9o also. Basin & Co. v. Conley, 58 such case, it is considered suflBl- Md. 59. cient evidence of acceptance that Unreasonable retention, and the purchaser has not returned or use, of a part of the goods tend- offered to return the goods, or ered was held to constitute an ac- notified the seller of his non-ac- ceptance of the whole of the ceptance." Freedman v. Shoe Mfg. goods, in Emmery Thompson Co. v. Co., 122 Pa. 25, keeping shoes in Graves, 91 Conn. 71, 98 Atl. 331. stock for two months and selling 23 — 84 Wis. 53. 166 THE LAW OF SALES rejection. But this test is plainly for the purpose only of enabling the purchaser to decide whether the material conforms to the contract. If the fact can be determined by inspection alone, the test is not necessary, and the use of the material, therefore, clearly injustifiable. Now in this case, the plaintiff's officers determined at once, and upon inspection alone, that the material was unfit for their purposes, and so notified the defendant, and rejected the entire lot. They did not claim to need any test, they took their position definitely. After that act they could not deal with the property in any way incon- sistent with the rejection, if they proposed to insist upon their right to reject. They must do no act which they would have no right to do unless they were owners of the goods. Under these rules it is evident the plaintiff had no right to use up a quantity of the material several weeks after the rejection. By the rejection it became defendant's property if such rejection was rightful. Plaintiff had no right to use any part of it. It is* claimed that the use was simply for the purpose of providing evidence of unfitness for the purpose of the trial of this case; but one has no right to use his opponent's prop- erty for the purpose of making evidence. The act was an unmistakable act of ownership, and entirely incon- sistent with the claim that the material had been re- jected and was owned by defendant. ' ' Inspection Before Payment. — There is a right of in- spection whose purpose is entirely different from the one just discussed, but which is often confused with it. This is the right to inspect as a condition precedent to payment. The right of inspection just discussed exists in order that the buyer may know whether the goods offered are those he contracted for, before he takes or refuses the title to them. It presupposes that the con- tract has been in respect to unidentified, though described, goods so that title did not pass at the time of making the THE BUYER'S RIGHTS 167 contract, or that, for some other reason, title has not already passed to the buyer. But when the parties have contracted concerning a specifically identified chattel, the rule is that title pre- sumably passes at the time the contract is made, regard- less of payment or change of possession. When, there- fore, the possession of such a chattel is offered to the buyer and payment demanded, the buyer's inspection or non-inspection can not affect the title — title is already in the buyer. If he has contracted to pay at a certain date, prior to delivery of the goods to him, he would break the contract by refusing to pay. But if delivery of the chattel is to precede, or to be concurrent with, payment, he need not pay until the very chattel he bought is delivered or of- fered to him. Furthermore, he need not take the seller's word that the chattel offered is the one contracted for; he has the right to see for himself. If this opportunity to see. for himself is not given, he is not in breach of the contract if he refuses to pay.* The title is none the less in him, but he does not have to pay until he receives possession, and he does not have to take possession with- out knowing that he is getting the chattel he contracted for. This right to inspect before payment may, like the right to inspect before taking title, be waived, and such waiver may be implied from the terms of the contract and the acts of the parties. An agreement, for instance, that the goods are to be sent to the buyer ''C. 0. D." may preclude his right to any inspection before payment. Such may be the effect of a failure to examine the goods at a reasonable time, or contracting for their delivery in such a way that inspection before coincident pa^nnent is impracticable.^*^ 24 — Sawyer v. Dean, 114 N. Y. S. 793, agreement to pay on pre- 469; Whitney v. McLean, 38 N. Y. sentation of bill of lading; Law- *See Uniform Sales Act, Section 47, (1), (2). tSee Uniform Sales Act, Section 47, (3). 168 THE LAW OF SALES This waiver of inspection before payment, however, does not necessarily affect title to the goods. If title has already passed, at the time of the contract, or by seller's dehvery to a carrier of goods conforming to the contract, inspection or failure to inspect does not affect it ; it is in the buyer and remains in him. On the other hand, if the goods received by the buyer are not in fact the goods he contracted for, neither his mere physical acceptance of them, as we have seen, nor his payment for them, neces- sarily implies a willingness to take title despite the sell- er's failure to perform. Performance of Conditions by Seller. — Both of these rights of inspection are for the purpose of giving the buyer opportunity to learn whether the thing offered by the seller is in fact what the buyer contracted to take. This, then, involves a question in each case of just what it was that the seller agreed to transfer and the buyer to accept. What Conditions Are. — ^Whether or not the seller has tendered the goods contracted for by the buyer de- pends obviously on the terms of the contract; that is to say, upon those terms of the contract which relate to the identity of the goods intended to be covered by it. These terms of identifying description, to which goods tendered must conform to be the goods contracted for, are usually called '' conditions. '"^^ ton & Sons Co. v. Mackie Grocery which the buyer may refuse them. Co., 97 Md. 1, agreement to pay Scranton v. Mechanics Trading on delivery to a named place; Co., 37 Conn. 130; Norrington v, Polenghi Bros. v. Dried Milk Co., Wright, 115 U. S. 188. 49 Sol. Jr. 120. But, as some courts allow re- 25 — Although the term "war- jection of title of goods which are ranty" is usually applied to those indubitably those contracted for, terms of description which do not but which do not conform to the affect the precise identity of the terms of the contract in other re- goods contracted for, it is some- spects than identity, (see p. 182) times used of those parts of de- the use of the word "warranty" Bcription for non-conformity to itself indicates nothing. THE BUYER'S RIGHTS 169 Furthermore, it may be possible that the seller tenders to the buyer precisely the goods contracted for, in in- herent nature, but does not tender them at the place agreed upon, or at the right time, or in the right way, etc. In such case, if the matter failed in is of essential importance in the agreement, the seller has not performed his agreement. And not having himself performed, he cannot sue the buyer if the latter refuses to pay. It might be said that, in these cases the very goods described in the contract having been tendered, title would be pre- sumed to have passed, although the buyer incurs no "lia- biUty" as to payment until the seller shall have per- formed according to the terms. But, on the other hand, the goods not having been specific at the time of the mak- ing of the contract, title could not have passed then and would not pass thereafter without some actual or con- structive assent of the buyer. The buyer not having accepted the goods, the title would not be in him, what- ever might have been his reason for refusing to take it. The question of title is not specifically raised in the cases involving these circumstances, but the courts do agree that, at least, there is no liahility on the part of the buyer. These provisions of the contract, also, since they must be complied with to make the buyer liable, are called ' ' con- ditions." And, indeed, in some cases such terms as the time and place of delivery — which seem normally related to performance rather than to identity — are said to be essential to the identity of the goods. Thus one court says, ''The date of the shipment is a material element in the identification of the property. ' '^® Other courts treat them as having the same effect, without specifically saying that they do affect the identity. For example, the Supreme Court says,^'' ''A statement descriptive of the subject matter, or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a war- 26— Clark v. Fey, 121 N. Y. 470. 27— Norrington v. Wright, 115 U. S. 188. 170 THE LAW OF SALES ranty, in the sense in which that term is used in insurance and maritime law, that is to say, a condition precedent, upon the failure or non-performance of which the party aggrieved may repudiate the w^hole contract. ' '^^ It seems unavoidable, therefore, to discuss both kinds of these con- ditions, viz., those relating to performance as well as those affecting identity, on whose performance by the seller the buyer's liability depends, without particular distinction. What Are Conditions. — This brings us to the in- quiry, what terms in the contract are "conditions" to which the seller must conform to render the buyer liable. When the contract is for the sale of an article specifically identified at the time, a tender by the seller of that par- ticular article would seem clearly to be a performance of his agreement, so far as his part in the transfer of title is concerned, no matter what statements he may have made in regard to the character or qualities of that article. This is fully sustained by the authorities which hold that title to a specific chattel is presumed to have passed at the time of the contract,^^ in conjunction mth those 28— "The quality Is a part of the N. Y. 366; Rommel v. Wingate, description of the thing agreed to 103 Mass. 327; Cromwell v. Wil- be sold, and the vendor is bound kinson, 18 Ind. 365; Filley v. Pope, to furnish articles corresponding 115 U. S. 213, "The term 'ship- with the description. If he tenders ment from Glasgow' defines an articles of an inferior quality, the act to be done by the sellers purchaser is not bound to accept at the outset, and a condi- them." Pierson v. Crooks, 115 tion precedent to any liability N. Y. 539; "What is sold is not of the buyer." Van Valken- 300 tons of rice in gross, or in berg v. Mason, 45 Neb. 654. Quan- general. It is 300 tons of Madras tity also may be a condition pre- rlce to be put on board at Madras cedent, Tamvaco v. Lucas, 1 El. during the particular months", & El. 592; Downer v. Thompson, Bowes V. Shand, 2 App. Cas. 455; 2 Hill (N. Y.) 137, delivery of too Salmon v. Boykin Co., 66 Md. 541, much; Cunliffe v. ITarrison, 6 quantity and place of shipment; Exch. 903, idem; Hoffman v. Crane v. Wilson, 105 Mich. 554; King, 58 Wis. 314. Cf. Brownfield Cleveland Rolling Mill v. Rhodes, v. .lohnson. 128 Pa. 254. 121 U. S. 255; Pope v. Porter, 102 2^— Ante, p. 19 ff. THE BUYER'S RIGHTS 171 which hold that a specific chattel so sold can not be re- turned to the seller in the absence of fraud.^° The converse of this is equally true ; a contract to sell a specific chattel is not satisfied by a tender of some other chattel, even though the one tendered has all the qualities ascribed to the one contracted for. Thus, in Columbia Iron Works v. Douglass,^^ the contract was for the sale of steel scrap from the plates of certain boats which the seller was building. The court held that a tender of steel scrap which was not from the plates of those boats was not performance of the contract, even though that which was tendered was of precisely equal quality. ''It was/' said the court, "an agreement for the purchase by the appellee and for the sale by the appellant of a spe- cific, designated thing; and that thing was not steel of a described grade free from a named percentage of sulphur and phosphorous, but steel scrap from the plates, beams, and angles of the United States cruisers built by the ap- pellant. This was the named and designated — the specific and identical — thing contracted for ; and the substitution of any other or different material, no matter what its quality or chemical test might be, was a clear breach of the undertaking entered into by the parties. When a per- son buys a particular thing, he can not be compelled to take some other thing, even if like the thing he bought. He has a right to insist on the terms of his contract." When the contract relates to goods not existing, or not specific, at the time, then all terms in the description which are reasonably necessary to identify the goods tendered with the goods intended by the contract are con- ditions and must be comphed with. In general, all terms which the parties may reasonably be supposed to have considered essential to the correct identification are a part of the description which must be complied with. If, for instance, one agree to sell "blue vitriol, sound, and ZO—Post, p. 177. Cf. also, Web- Iowa 37; Scott v. Buck, 85 III. 333. ster, Gruber Co. v. Dryden, 90 31—84 Md. 44. 172 THE LAW OF SALES in good order," his contract is not performed by a de- livery of vitriol, however sound and in good order, which is not blue vitriol. ' ' Saltzberger, " or "green," vitriol does not suffice. ^^ It is impossible to formulate a rule as to just which terms of a contract are essential to the iden- tification of the goods intended and which are mere de- scription of character or quality collateral to the identifi- cation.^^ Whether a particular term is in fact an essential part of the contract of sale, or is only an obligation col- lateral to the matter of passing title, is a matter that will be decided by each court to suit itself in the particular case. For precedent decisions, which may by the similar- ity of their facts influence a particular judge, one must refer to the digests. Opinions as Conditions. — A statement of opinion as to the characteristics or qualities of the goods con- tracted for, is not a part of the identifying description, even though, in expression, it may be interwoven with the description. It is not a condition precedent to per- formance, therefore, that the goods shall actually conform to that statement of opinion. The great difficulty is to distinguish precisely between description for the purpose of identification and mere coincident expressions of opinion. There are no rules for determining this — it is a question of particular conclu- sion. But if this question be settled in the particular case, the law is certain; description must be complied with, opinion is immaterial.^* 32— Hawkins v. Pemberton, 51 drover to an experienced market N. Y. 98. man that his hogs were "suitable 33 — As to the effect of state- for New York market" was a mere ments, by way of description or expression of opinion; Farrow v. otherwise, in regard to goods Andrews, 69 Ala. 96; Power v. which are specific and identified Barham, 4 Ad. & EI. 473, "It was, at the time of sale, see the discus- therefore, for the jury to say, sion under "warranty," post, p. 182. under all circumstances, what was 34— Bartlett v. Iloppock, 34 N. the effect of the words, and wheth- Y. 118, a statement by a hog- er they implied a warranty of gen- THE BUYER'S RIGHTS 173 Implied Conditions. — An important proposition in respect to these conditions, or terms of the description, is that they need not be wholly express. Terms which must be complied mth to constitute performance may be im- plied by the other provisions of the contract.* ThuS; ''It is understood of every contract for the future sale and delivery of an article of merchandise, (not specific at the time), even A\dthout express terms, that it shall be of merchantable quality." And this is a con- dition precedent.^^ Howard v. Hoej^,^^ arose out of a sale of ale. On delivery it was discovered to be sour, ropy and unfit for use and the buyer refused to keep it. The seller contended that there was no express statement in the contract that it should not be sour. But the court held an express statement to be unnecessary, saying, ''It stands conceded, that, where the contract is execu- tory,, or, in other words, to deliver an article not defined at the time, * * * the promisee can not be compelled to put up satisfied with an inferior commodity. The con- tract always carries an obligation that it shall be at least merchantable — at least of medium quality and goodness. If it come short of this it may be returned after the vendee has had a reasonable time to inspect it. * * * There is always a warranty or promise implied that the indeterminate thing to be delivered should, at least, not have any remarkable defect."" The implication is not that the goods othermse described shall be of the best quality, but only that they shall be of a normally good ulneness, or conveyed only a de- This is a question for the jury, scription, or an expression of Hawkins v. Pemberton, 51 N. Y. opinion." Jendwyn v. Slade, 2 198, 10 Am. Rep. 595; Allen v. Esp. 572. Lake, 18 Q. B. 560. The frequency with which state- 35— Reed v. Randall, 29 N. Y. ments by the seller in regard to 361. the goods are held to be only ex- 36—23 Wend. (N. Y.) 350. pressions of opinion is vigorously 37 — Farren v. Dameron, 99 Md. condemned by the Supreme Court 323. of Kansas, in Foote v. Wilson, 104 Kan. 191, 178 Pac. 430. *See Uniform Sales Act. Sections 12, 13, 14, 15. 174 THE LAW OF SALES quality.^* Usually, in cases where goods are to be shipped, the implied statement is as to their quality and condition at time of shipment only. This is usually the time of constructive dehvery to the buyer.^^ Other terms that may be implied from the circum- stances are discussed under the topic of ''Warranties".**' Waiver of Performance of Conditions. — Assuming that some particular term in the contract is identifying description of the goods, and therefore a condition prece- dent to the seller's exact performance, the question may arise — what is the result if the buyer chooses to accept title despite the defect? Does he, by accepting the goods tendered in place of the ones contracted for, waive all right to recover dam- ages suffered through the seller's failure to tender the goods described? In other words, does he, by accepting the goods actually tendered, legally accept them in full satisfaction of the seller's obligation? Authority is very much confused upon this point. The New York courts rather indicate that if the term with which compliance has been waived is truly a condition, the waiver extends not only to the passing of title but to all claims for damage as well, if the acceptance is made with knoivledge that the condition is not complied with. Occasional decisions in other jurisdictions intimate a similar rule.*^ There is tendency of the courts, however, to hold, in 38— Sweat v. Shumway, 102 well v. Lee, 34 Minn. 411; Cheboy- Mass. 365; Harris v. Waite, 51 Vt. gan Paper Co. v. Eichberg, 184 481; Tennessee Co. v. Leeds, 97 Mich. 30; America Theater Co. v. Tenn. 574. Siegel, Cooper & Co., 221 111. 145; 39— Leopold v. Van Kirk, 27 but of.. Underwood v. Wolf, 131 III. Wis. 152; Mann v. Everston, 32 425; Athletic Club v. Lumber Co., Ind. 355. 18 Tex. Civ. Ap. 161; Hurley- 40— Posf, p. 189. Mason Co. v. Stebbings, 79 Wash. 41— Reed v. Randall, 29 N. Y. 366, 140 Pac. 381. But cf., Spring- 358; Coplay Iron Co. v. Pope, 108 field Shingle Co. v. Edgecome Mill N Y. 232; Carleton v. Lombard. Co., 52 Wash. 620. Ayres & Co., 149 N. Y. 137; Max- THE BUYER'S RIGHTS 175 one way or another, that the buyer does not lose his right to damage for non-performance by accepting title to the goods as tendered.*^* The matter is, however, rather hopelessly confused by terminology. Those terms of the description which serve to identify goods contracted for must be complied with before the contract of sale can be properly per- formed; they are truly conditions precedent. Those terms which may describe, but do not identify, the goods are not conditions, and are usually called "warranties." They do not relate to the passing of title. As a war- ranty, in this narrow sense, does not relate to title, the goods could not be rejected by the buyer for breach of it — they would still be the identical goods he agreed to take. Hence the right to recover damages for breach of ''war- ranty" is not lost by acceptance. Consequently it is possible for courts to give mouth-honor to a rule that no right of action for damages from breach of conditions \vill survive acceptance of the goods, and yet in fact allow action for breach of what even themselves would call a condition if the buyer had chosen to reject the goods as tendered, but what, for the purpose of allomng the action, they do choose to call a "warranty." The fact therefore that courts say "conditions do not sur- vive acceptance" does not necessarily put them in the position of so holding in fact.*^ 42 — Boston Woven Hose Co. v. is allowed to survive. Kendall, 178 Mass. 232; Under- Morse v. Union Stock Yards, 21 wood V. Wolf, 131 111. 425; Dalton Ore. 289, 14 L. R. A. 157, 28 Pac. 2; v. Bunn, 137 Ala. 175. Lewis v. Rountree, 78 N. C. 323; 43— Cf., Springfield Shingle Co. Morse v. Moore, 83 Me. 473, 23 V. Edgecome Mill Co., 52 Wash. Am. St. 783, 22 Atl. 362. 620, and Hurley-Mason Co. v. Steb- In Day v. Poole, 52 N. Y. 416, bins, 79 Wash. 366, 140 Pac. 381; the court got around the rule Fairbank Co. v. Metzger, 118 N. Y. largely on the argument that the 260, where the statement concern- buyer had accepted the goods on ing the goods is clearly part of the the seller's promise that he would identifying description, but Is make good for the defect, called a "warranty" and as such The subject of "wairanties", ♦See Uniform Sales Act, Section 11, (1), 49. 176 THE LAW OF SALES 2. Possession, but not Title, Acquired The rights of a buyer who has received possession of the goods but not title to them are, of course, consistent with the seller's rights. These latter have already been discussed under the appropriate heading.** Right to Keep Possession.— So long as the buyer is not in default, if the contract provides, expressly or im- pliedly, that he shall have possession he is entitled to keep possession and can sue the seller for any trespass upon that right.*^ The buyer's right of possession is not opposed to the seller only, but he can maintain actions of trespass, replevin, etc., against other persons who unlawfully inter- fere with his possession.*^ Right to Acquire Title.— The buyer also has the right to acquire title by payment, or performance of whatever may be the condition, according to the terms of the contract. A buyer who is not in possession can not acquire title, unless he can get a decree of specific performance in equity, without some act of passing title on the part of the seller. But when the buyer is in pos- session of the goods, his mere tender of payment, or of performance of other conditions, is sufficient to vest title ■what they are, when they exist, some courts hold that the seller rights arising therefrom, etc., is can not retake possession without discussed post, p. 180. a demand for performance, New 44 — Ante, p. 99. Home etc. Co. v. Bothane, 70 Mich. 45— Clark v. Clement, 75 Vt. ^'^^• 417; Richardson V. G. W. Mfg. Co., 46— Harrington v. King, 121 3 Kan. Ap. 445; Wellden v. Witt, Mass. 269; Aldrich v. Hodges, 164 145 Ala. 605, 40 So. 126; Western Mass. 570, even though the seller Union Sewing Mach. Co. v. Sachs, also has brought an action for 67 N. Y. S. 2; Cushman v. Jewell, conversion against the same de- 7 Hun. (N. Y.) 525, even after de- fendant; Freedman v. Phillips, 82 fault, if the seller has waived the N. Y. S. 96; Lord v. Buchanan, 69 default. Vt. 320, 60 Am. St. 933; Messen- Even if the buyer is in default, ger v. Murphy, 33 Wash. 353. THE BUYER'S RIGHTS 177 in himself.*'' This right to acquire title he can also transfer to other persons." Even after the buyer has lost possession through the retaking by the seller, it has been held that the right to acquire title by tender of payment is still in him.*® ^ But this must presuppose that the seller's retaking has not been by way of a proper rescission of the contract. Right to Return the Goods. — If the buyer is in default, he can not avoid further performance of the contract by returning the possession of the goods, against the seller's mil. The obligation, or promise, to return the goods in case of default is for the benefit of the seller, not of the buyer, and it does not authorize the buyer to return the goods and escape further payments.^" "Whether the seller, who of his own volition retakes possession of the goods, can thereafter hold the buyer liable for further payments, has already been discussed." Right to a Return of Money Paid. — If the seller exer- cises his right to retake possession he need not, ex- cept as provided by statute, return any of the buyer's payments as a condition precedent to the retaking.^^ 47— Birmingham Ry. Co. v. Mass. 445; Cushman v. Jewell, 7 Bowers, 110 Ala. 322; Currier v. Hun. (N. Y.) 525. Knapp, 117 Mass. 324; Hervey v. 49 — Miller v. Steen, 30 Cal. 402; Dimond, 67 N. H. 342, 68 Am. St. Foundry Co. v. Pascagoula, 72 673, 39 Atl. 331; Albright v. Mere- Miss. 608. dith, 58 O. S. 194; Christenson v. But the buyer can not vest title Nelson, 38 Ore. 43, 63 Pac. 648, in himself by tender of payment even though the tender be made after the goods have been de- tefore performance is due; Cush- stroyed while in the seller's re- man v. Jewell, 7 Hun. (N. Y.) 525, possession. Hollenberg Music Co. idem; Pease v. Teller Corp., 158 v. Barron, 100 Ark. 403. Cal. 807. 50 — Robinson's Appeal, 63 Conn. 48— Bailey v. Colby, 34 N. H. 26. 290; Finlay v. Ludden & Bates Co., 66 Am. Dec. 752; Christenson v. 105 Ga. 264; Smalback v. Wolffe, Nelson, 38 Ore. 43, 63 Pac, 648. 46 N. Y. S. 968; Ainsworth v. The sub-buyer will acquire title Rhines, 60 N. Y. S. 876. upon the original buyer's tender 51 — Ante, p. 106. of payment, Day v. Bassett, 102 52 — Ante, p. 103. See also White 178 THE LAW OF SALES The buyer's right after such retaking to get back what he has paid, less reasonable compensation for use, is another matter and is recognized by some decisions. A number of courts, notably in jurisdictions which require "disaffirmance" as a condition precedent to retaking of possession, lean toward the feeling that "To permit the so-called 'lessor' (seller) to resume posses- sion of the property, and declare all payments forfeited, when perhaps all but one may have been paid, is con- trary to the fundamental principles observed in courts of equity. ' '^* The theory is probably the same one often given as reason for not allowing the seller to enforce further payment after retaking possession, namely, that such retaking amounts to a rescission of the contract.^* 3. Title, but not Possession, Acquiked When title has passed to the buyer, he has, of course, the concomitant right of immediate possession, unless his agreement with the seller provides otherwise, or unless the rights of the seller, as already set forth, give the seller a temporary right of possession. The seller has a lien until payment, unless he has given credit, and conse- quently the buyer can not enforce dehvery of possession in such case until he has paid. On the other hand, if the V. Oakes, 88 Me. 367; Thulby v. N. C. 377; Snook v. Reglan, 89 Ga. Rainbow, 93 Mich. 164, if buyer 251, buyer may sue for money terminates contract by wrongful had and received, and recover resale, demand must first be made sum paid less reasonable rent, by seller, to show a "disaffirm- etc.; Foundry Co. v. Pascagoula ance" of the contract; Sewing Ice Co., 72 Miss. 608, "the reserva- Mach. Co. V. Bothame, 70 Mich, tion of the title is but as security 443, but this was a hard case such for the purchase price, and if the as tend to shipwreck principles, property is recovered by the sell- Cf. Tufts V. D'Arcambal, 85 Mich, er, he must deal with it as secur- 185; Colcord v. McDonald, 128 ity, and with reference to the Mass. 470. equitable right of the purchaser." Contra, Hayes v. Jordan, 85 Ga. 54— Snook v. Raglan, 89 Ga. 251; 741; Kotchum v. Cummings, 53 Preston v. Whitney, 23 Mich. 260. Miss. 596. Contra, Tufts v. D'Arcambal, 85 53— Puffer & Sons v. I.ucas, 112 Mich. 185. THE BUYER'S RIGHTS 179 seller has given credit, the buyer is entitled to possession, regardless of payment, if his credit is still good. As this right of possession of the buyer is merely the complement of the seller's right of possession after title has passed, and as that latter right has already been fully discussed,^^ it is unnecessary to discuss it further in this place. Titular Action. — If the buyer does have the right of possession, he is invested with all the remedies such as replevin or trover, available to any owner who is kept from his lawful possession.* This right of the buyer to have possession when he has acquired title exists, so far as practically enforcible, even in those cases where the sale has been of an undi- vided part of a larger mass. We have already seen that while there can be no title to unspecified property at all, the parties can pass a particular interest in some specific larger mass if they desire to do so, and that such a desire will be presumed in this country in case of sale of an unseparated part of a larger mass of fungible goods. ^® In such cases it is settled that the buyer, whether or not he be called owner, can maintain a possessory action of some sort against the seller.^''' The buyer who has acquired title, but not yet received possession, may lose his title and right to possession through the wrongful acts of the seller, in certain cases. This matter is discussed under the topic of rights of third persons.^* Breach of Warranty. — We have seen that statements, either express or implied, in regard to the goods may 55 — A7ite, p. 115. replevin; Hurff v. Hires, 11 Vroom. 56 — See ante, p. 63. (N. J.) 581, trover; Kimberly v. 57— Piazzek v. White, 23 Kan. Patchin, 19 N. Y. 330, trover; H^ll 621, replevin; Halsey v. Sim- v. Boston & W. R. R., 14 Allen monds, 85 Ore. 324, 166 Pac. 944, (Mass.) 439, conversion, replevin ; Seldomridge v. Bank, 87 58 — Post, p. 212. Neb. 531, 30 L. R. A. (n. s.) 337, *See Uniform Sales Act, Section 66. 180 THE LAW OF SALES be treated as part of the identifying description of the goods. In such case goods which do not conform to the statements are not the goods contracted for by the buyer and he need not take title to them unless he so chooses. These statements which serve to identify the goods con- tracted about are properly called ** conditions. " What a Warranty Is. — But the seller may make statements about the goods contracted for which, while they serve to characterize the goods, are not in fact re- lated to the identity of the goods. For instance, the con- tract of sale may refer to some specific article whose identity is so fixed, not by description only, but by actual demonstration, that there can be no doubt as to just what tangible thing is concerned in the contract. But at the same time the seller may make a positive statement as to the character, or quality, or nature generally of the article. Such a statement, while in a sense descriptive of the article, does not in the least serve to identify the subject matter of the contract. In a sense there is a conflict of description — the oral description of char- acteristics of the article does not accord with the visual description by demonstration. But obviously, since it is a tangible, visible thing that is contracted about, rather than a mere conceptual thing, the demonstration should dominate the inconsistent oral statements, so far as concerns the identity of the thing to which the parties probably intended to transfer title. These parts of descriptions which do not affect the real identity of the thing contracted about are called * Svarranties ".^® The name warranty is not limited to them, however. We have seen that if a buyer chooses to 59 — "A warranty is an express Hurley-Mason Co. v. Stebbins, 104 or implied statement of something Wash. 171, 140 Pac. 381. which a party understands shall "When the subject matter of a be a part of a contract, and, sale is not in existence, or not ae- though part of the contract, col- certained at the time of the con- lateral to the express object of it." tract, an undertaking that it THE BUYER'S RIGHTS 181 accept title to goods tendered, despite their non-conform- ity to the identifying description, or other conditions, he does not, in some states, waive all his rights growing out of the breach. He may still sue to recover damages resulting from the breach. These terms of the des