LAW OF SALES

OF

PERSONAL PROPERTY.

CHAPTER I.

THE NATURE AND FORMALITIES OF THE CONTRACT.

§ 1. Sale and Contract to Sell.

1. THE law of sales of personal property includes contracts of bargain and sale,' and contracts for a future sale. By each of these contracts the seller, in the absence of stipulations or circumstances modifying his obligation, passes or engages to pass the general property in a thing, and to deliver possession thereof to the buyer, for a price paid or promised.2 Un

1 The Uniform Sales Act discards the phrase "contract of sale," which is employed in the English statute, and which has abundant judicial authority on both sides of the Atlantic. The draftsman of the Act has expressed the opinion that "Blackburn's adoption of the phrase for the title of his book on Sales is probably responsible for the currency of the expression." Unfortunately for this suggestion, the expression was current in text books and judicial opinions long before the publication of Blackburn on Sales. This book appeared in 1845. Kent had used "Contract of Sale" as early as 1832 in his Commentaries (Vol. 2, p. 492). It was used by Shaw, C. J., in Rowley v. Bigelow, 12 Pick. 307; 23 Am. Dec. 607 (1832), and in Mixer v. Howarth, 21 Pick. 205; 32 Am. Dec. 256 (1839); by Savage, C. J., in Bement v. Smith, 15 Wend. 493 (1836); and by many other judges prior to the appearance of Lord Blackburn's treatise.

2 "In every contract of sale, there is on the part of the vendor an obligation, not only to transfer the property in the thing sold, but also to deliver possession to the buyer." Calcutta Co. v. De Mattos, 32 L. J. Q. B. 322, 335, Cockburn, C. J. (1863). "By the general rule of law, the vendor on a sale of chattels is bound to deliver them to the vendee at the place where they are at the time of the sale, on performance by the latter of the terms of sale, although the contract is silent on the subject of delivery." Gray v. Walton, 107 N. Y. 254, 258, Andrews, J. (1887); Bur

doubtedly, the seller's engagement to deliver possession may be modified or even negatived by the express or implied terms of the contract. If A pays twenty dollars to B for a mare, which has strayed or been stolen from B's pasture, and A is "to run his own risk as to finding her," B is under no obligation to make actual delivery of the animal, while title and right to possession vest at once in A.1 Such a case, however, is, by the consent of the parties, taken out of the general rule of law, that the seller engages to deliver possession of the subjectmatter of the sale to the buyer, as well as to vest title thereto in him.

2. Time of performing these Engagements. - These two engagements may be performable at the same time or at different times. If the parties agree upon a present sale of a horse, or of any other specific chattel, which the purchaser is to take at once, but for which he is to pay at a stated future time, the title and possession pass immediately upon the formation of the contract. It may be stipulated, however, that the title shall pass at once, but that the seller may retain possession of the thing until a part or the whole of the price is paid. When it is expressly stated that the engagements to pass title and to give possession are to be performed at the same time, or at different times, no difficulty is experienced by the courts in dealing with them. But whether they are to be performed at the same time, or at different times, is often a matter of inference. In such cases the judges have not always kept in mind the distinction between the two engagements, and their confusion of thought has been fruitful of erroneous dicta,2 and even of un

dick's Cases on Sales, 633; Julius Kessler & Co. v. Lally, 109 Minn. 238; 123 N. W. 921; 124 N. W. 213 (1909); holding that the consideration for notes for the price of goods had failed because the seller had not made delivery, though title had passed.

1 Webber v. Davis, 44 Me. 147 (1857); Burdick's Cases on Sales, 635; Patrick v. Watson, 55 Wash. 76; 104 Pac. 144 (1909); a written contract for the sale of all horses of a certain brand on a particular farm, or wherever found.

2 In Olyphant v. Baker, 5 Den. 379 (1848), Whittlesey, J., said: "In many cases of sales of personal property it is a very nice and difficult question to determine whether there has been a delivery, whether title has passed." Throughout his opinion he treats these questions as identical.

sound decisions. This is noticeably true in actions growing out of cash sales.1

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3. Executed and Executory Contracts. It is a fundamental doctrine of this branch of English law, that in the case of a bargain and sale the engagement to pass the general property is executed by the formation of the contract, while in the case of a contract for a future sale it is to be executed thereafter. Hence a present sale, passing the general property in a thing, is often called an executed contract of sale; while a contract to pass the general property in the future is spoken of as executory.3

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4. Their Respective Characteristics. These are distinctly marked, and are to be borne in mind throughout our discussion. (1) A bargain and sale is confined to ascertained, existing goods of the seller, title to which can pass at once; while a contract to sell can apply either to such goods, or to those which are to be ascertained, or are to be acquired or manufactured by the seller. (2) The latter contract confers upon the buyer a right in personam; and its non-performance entitles him to an action for a breach of contract only. A bargain and sale vests title to the specified goods in the buyer. Upon the seller's default in transferring possession, the buyer may sue him for a breach of contract, or in tort, and may even recover

1 Infra, ch. ii. § 4.

2 Clark v. Shannon & Mott Co., 118 Ia. 645; 91 N. W. 923 (1902). "It is a general rule of the common law as to sales of chattels that, as between vendor and vendee, no actual delivery is necessary; the completion of the bargain being all that is requisite to pass the title, though not the possession, until the price be paid or satisfactorily arranged." Fisher v. Eng. Lumber Co., 158 N. C. 61; 73 S. E. 121 (1911).

3 Walti v. Gaba, 160 Cal. 324; 116 Pac. 963 (1911). The words "I have this day sold" were construed as an agreement to sell, because the contract was indivisible and related to goods a part of which was not then in a deliverable state. Herrin v. Scandinavian-American Bank, 65 Wash. 569; 118 Pac. 648 (1911). An executory contract to buy stock.

4 Cunningham v. Ashbrook, 20 Mo. 553 (1855); Burdick's Cases on Sales, 1; Haille v. Smith, 1 Bos. & Pul. 563 (1796); Walti v. Gaba, 160 Cal. 324; 116 Pac. 963 (1911).

Fletcher v. Livingston, 153 Mass. 388; 26 N. E. 1001; Burdick's Cases on Sales, 4; New Iberia Sugar Co. v. Lagarde, 130 La. 387; 58 So. 16 (1912).

• Chinery v. Viall, 5 H. & N. 288 (1860).

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the goods from third parties,1 save in exceptional circumstances. (3) In the case of a bargain and sale, the subsequent gain 2 or loss belongs to the buyer; while under a contract to sell, until title has passed from the seller, the goods are at his risk, unless this rule is varied by the agreement of the parties.

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4. (a) Absence of Contract. Unless there is a true contract between the parties, a sale does not result. The transaction may be a mere negotiation for a sale; or an offer to sell, or it may fall short of being a sale because the language of the parties is too indefinite to create an enforceable obligation, or because of one party's mistake as to the existence of the other." But an agreement to sell a definite quantity of cotton at a fixed price per pound is not invalid because it does not specify the quality or grade of cotton.

4. (b) Louisiana Doctrine. - In Louisiana, a contract of sale

1 Meade v. Smith, 16 Conn. 346 (1844); infra, ch. v. § 8.

2 Groat v. Gile, 51 N. Y. 431 (1873); Burdick's Cases on Sales, 5. Terry v. Wheeler, 25 N. Y. 520 (1862); Burdick's Cases on Sales,

121.

4 Montgomery Ward & Co. v. Johnson, 209 Mass. 89; 95 N. E. 290 (1911); an order for goods from the defendant, in accordance with his circular, "does not ripen into a contract of sale until the defendant's acceptance of the order."

Malle & Nutt v. Watkins, 132 Ga. 700; 64 S. E. 999 (1909); New England Box Co. v. Prentiss, 75 N. H. 246; 72 At. 826 (1909); Pike County v. Spencer, 192 Fed. 11 (1911). An offer by plaintiff, to sell to defendant county a safe and certain other office fittings at prices stated, was not accepted so as to create a contract by the passage by the county board of a resolution, that the county make a contract with plaintiff for the purchase of the articles at the prices named in the offer, but payment to be made in instalments extending over four years at a stated rate of interest."

• McAllister Lumber & Supply Co. v. Eldora Resort & Power Co., 51 Colo. 91; 116 Pac. 1038 (1911). "All that can be said with any certainty is that the parties agreed to buy and sell timber. . . such timber and to such an amount as the one party may desire to deliver and the other to receive." Price v. Stifek, 39 Mont. 426; 104 Pac. 195 (1905); Elmore, Quillian & Co. v. Parrish Bros., 170 Ala. 499; 54 So. 203 (1911). "100 bales of cotton," with nothing as to weight or identity of bales, at a "price to be mutually agreed on."

7 John L. Whiting & Sons Co. v. Barton, 204 Mass. 169; 90 N. E. 528 (1910). "Whiting representing the plaintiff acted under a mistake, and supposed he made a contract, when he made no contract, because the party that he supposed he was contracting with was not in existence."

8 Whiteley v. Willingham & Bell, -Ala. —; 57 So. 816 (1912). The seller in such a case is bound to deliver a merchantable article.

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is defined as "an agreement by which one gives a thing for a price in current money, and the other gives the price in order to have the thing itself. Three circumstances must concur to the perfection of the contract, to wit: the thing sold, the price, and the consent.' The sale may be perfect without payment of the price or delivery of the thing.2 But an element of confusion was introduced by another code provision to the effect that "a promise to sell amounts to a sale, when there exists a reciprocal consent of both parties, as to the thing and the price thereof." This provision, literally interpreted would create sales by operation of law, but the Supreme Court of Louisiana has refused to put upon it such interpretation. In an early case, it said: "We understand Art. 2437 (now 2462) to mean that a promise to sell, when the thing to be sold and the price of it are agreed upon is so far a sale that it gives to either party a right to claim recta via the delivery of the thing or payment of the price; but such a promise does not place the thing at the wish of the promisee, nor does it transfer to him the ownership or dominion of it." This judicial view continued to prevail 5 and the article has been amended to accord with it. § 2. The Property in Chattels may pass without a Contract.

5. Although there is no true sale of a chattel without a contract between the seller and buyer, the general property therein

1 Revised Civil Code of La., Art. 2439; Adams Machine Co. v. Newman, 107 La. 702; 32 So. 38 (1902).

2 Revised Civil Code of La., Art. 2457.

3 Ibid., Art. 2462. This provision is found in the Code Napoleon, Art. 1589.

McDonald v. Aubert, 17 La. 448 (1841).

Peck v. Bemiss, 10 La. Ann. 160 (1855). Garrett v. Crooks, 15 La. Ann. 483 (1860); White v. White, 50 La. Ann. 104; 23 So. 95 (1898); Gerault v. Feucht, 117 La. 276; 41 So. 572 (1906); Whited & Wheless v. Calhoun, 122 La. 100; 47 So. 415 (1908).

Acts of 1900, Second Extra Session, Act No. 3, p. 6. This amendment originally appeared in Acts of 1910, Act No. 249, p. 417, but had no enacting clause. The amended article reads as follows: "A promise to sell, when there exists a reciprocal consent of both parties as to the thing, the price and terms, and which if it relates to immovables is in writing, so far amounts to a sale as to give either party the right to enforce specific performance of same."