consideration for such transfer consists partly of goods and partly of money, it seems that the contract is a contract of sale.1 When a statute refers in terms to contracts of sale (as, for instance, the Statute of Frauds and the Stamp Act), it seems clear that it would have no application to contracts of exchange. Sect. 5 of Factors Act, 1889, post, p. 132, for its special purpose, draws a distinction between sales and exchanges. But, apart from statute, it seems that rules of law relating to sales apply in general to contracts of barter or exchange; but the question has been by no means fully worked out.2 The Bill originally contained a clause applying its provisions mutatis mutandis to exchanges, but the clause was cut out by the Commons Select Committee. The distinction between sale and exchange seems a universal one. Its effects in France are discussed at length by Pothier.3 In Roman law the matter was long a subject of controversy, but it was eventually settled by imperial rescripts.+ "It is important," says Mr. Moyle, speaking of Roman law, "to distinguish between sale (emptio venditio) and exchange ( permutatio) for they belong to different classes of contract, and their respective vincula juris are imposed by different causa. Permutatio is onc of the innominate contracts; there is no obligatio till one of the two exchanging parties has done what he has promised; but in sale which is consensual, the obligatio is independent of part performance. It is not, however, necessary that the whole price shall be in money (Dig. 18, 1, 79); and if after the contract is concluded the vendor changes his mind and agrees to take goods in lieu of the purchase money, it remains sale, and does not become exchange.5 Sect. 1. 1 Aldridge v. Johnson (1857), 27 L. J. Q. B. 296; Sheldon v. Cox (1824), 3 B. & C. 420, where the goods had been delivered and the action was brought for the money balance. Cf. Forsyth v. Jervis (1816), 1 Stark. 437; Bull v. Parker (1842), 12 L. J. Q. B. 93; Harman v. Reeve (1856), 25 L. J. C. P. 257; South Australian Ins. Co. v. Randell (1869), L. R. 3 P. C. 101 (alternative consideration). 2 Cf. Fairmaner v. Budd (1831), 7 Bing. 574; Emanuel v. Dane (1812), 3 Camp. 299 (warranty); La Neuville v. Nourse (1813), 3 Camp. 350 (caveat emptor); Pothier, Contrat de Vente, No. 620, citing the rule permutatio vicina est emptioni; French Civil Code, arts. 1702-1707. 3 Pothier, Contrat de Vente, No. 620, and see arts. 1702-1707 of the French Civil Code, which now regulate the matter. Moyle's Sale in the Civil Law, pp. 3-5; Moyle's Justinian, p. 420. 5 Moyle's Justinian, p. 420. By art. 1703 of the French Civil Code, the contract of exchange is made consensual like sale. As to the origin Relation of sale to contract Sect. 1. Pothier points out that the contract of sale is consensual, bilateral (synallagmatique), and commutative.1 In part it is governed by principles peculiar to itself, and in part by principles common to all contracts of the description above referred to. The Act, except generally. incidentally, deals only with the first - mentioned principles. The principles of law which govern the contract of sale, in common with all other consensual contracts, are outside its scope. But they are expressly saved by sect. 61, post, p. 113. If the law of contract were codified, the present Act would form a single chapter in the code. The present work is limited in the same manner as the Act. The contract of sale must be founded on mutual consent, and it may be avoided for fraud or illegality. But as regards these matters, and such matters as substituted performance, rescission, or what constitutes a valid tender, the reader is referred to general works on the law of Contract. Conditional Sub-sect. 2. As the contract of sale is consensual, it follows that it may be either absolute or conditional, as the parties may please. The conditions inserted by the parties may be either conditions precedent or conditions subsequent. In the more apt phraseology of the French lawyers, a contract of sale may be either a sale pure and simple, transferring the property absolutely to the buyer, or it may be subject to a "suspensive or "resolutive" condition.2 The division of conditions into those which are suspensive and those which are resolutive is convenient, because those terms mark clearly the distinction between an agreement for sale which is to become an actual sale on the fulfilment of a particular condition, and an actual sale passing the property to the buyer, but subject to defeasance on the happening of some specified event. When goods are sold by weight or measure, the weighing and measuring are suspensive conditions, and if goods be sent on approval, the approval of the buyer constitutes a suspensive condition (see sect. 18, post, pp. 41, 42). But if goods be sold by auction with a condition that they may be re-sold if not paid for within twenty-four hours, the condition is resolutive.3 of sale in exchange, and how the two contracts were differentiated, see Dig. 18, 1, 1. 1 See also Moyle's Sale in the Civil Law, pp. 1-3. As to right of seller to sell at a loss to undersell a rival in trade, see Ajello v. Worsley (1898), 1 Ch. 274. 2 French Civil Code, arts. 1583, 1584; cf. Moyle's Sale in the Civil Law, p. 165. 3 See Lamond v. Davall (1847), 9 Q. B. 2030; Head v. Tattersall (1871), 7 L. R. Ex. 7. For a peculiar resolutive condition containing a term for novation, see Grissell v. Bristowe, L. R. 4 C. P. 36. A mortgage is sometimes called a conditional sale, but, as Cave, J., has pointed out, a sale with a condition for re-sale to the original seller need have nothing to do with a mortgage.1 A mortgage of goods may be defined as a transfer of the general property in goods from mortgagor to mortgagee in order to secure a debt.2 This Act has no application to any mortgage, even though clad with the form of a contract of sale; see sect. 61 (4), post, p. 113. If a mortgage of goods be in writing, it comes within the Bills of Sale Acts, 1878 and 1882. But it seems that goods may be mortgaged by parol.3 Such a mortgage apparently comes under neither this Act nor the Bills of Sale Acts; for the latter Acts strike only at documents, and not at the transactions themselves.4 Sect. 1. Mortgage of goods. tinguished. Sub-sect. 3. The term contract of sale includes both actual sales and Sale and agreements for sale. It is important to distinguish clearly between agreement the two classes of contracts. An agreement to sell, or, as it is often to sell discalled, an executory contract of sale, is a contract pure and simple; whereas a sale, or, as it is called for distinction, an executed contract of sale, is a contract plus a conveyance. By an agreement to sell a jus in personam is created, by a sale a jus in rem is transferred. Where goods have been sold, and the buyer makes default, the seller may sue for the contract price, but where an agreement to buy is broken, the seller's remedy is an action for unliquidated damages. If an agreement to sell be broken by the seller, the buyer has only a personal remedy against the seller. The goods are still the property of the seller, and he can dispose of them as he likes; they may be taken in execution for his debts, and, if he becomes bankrupt, they pass to his trustee, who may disclaim the contract. But if there has been a sale, and the seller breaks his engagement to deliver the goods, the buyer has not only a personal remedy against the seller, but also the usual proprietary remedies in respect of the goods themselves, such as the actions for conversion and detinue. In many cases, too, he can follow the goods into the hands of third parties. Again, if there be an agreement for sale, and the goods are destroyed, the loss, as a rule, falls on the seller, while, if there has been a sale, the loss, as a rule, falls upon the buyer, though the goods have never come into his possession. 1 Beckett v. Tower Assets Co. (1891), 1 Q. B., at p. 25; cf. sect. 61 (2). 2 Ex. p. Hubbard (1886), 17 Q. B. D., at p. 698, per Bowen, L.J. 3 Maughan v. Sharp (1864), 34, L. J. C. P. 19. 4 North Cent. Wagon Co. v. Manchester Ry. (1887), 35 Ch. D., at p. 207, C. A. 5 Cf. Austin's Jurisprudence, p. 1001. Sect. 1. to sell passing into sale. Sub-sect. 4. By sect. 62, post, p. 119, the term "sale" includes a bargain and sale, as well as a sale and delivery.1 According to the Agreement Civil Law which, with some statutory modifications, prevailed in Scotland before the Act, the property in the goods sold did not pass to the buyer until delivery. But English law has rejected the objective test of delivery, and has adopted the rule that the property in the goods may be transferred by the contract itself if the parties so intend.3 The parties may make whatever bargain they please, and the law will give effect to it. When the parties express their intention clearly no difficulty arises. The contract may pass the property at once, or at a future time, or contingently on the performance of some condition. But in many cases the parties either form no intention on the point, or fail to express it. To meet such cases the Courts worked out a series of more or less artificial rules for determining when the property is to be deemed to pass, according to the imputed intention of the parties. These rules are now reproduced in sect. 18 of the Act, post, p. 41. M. Viollet, in an interesting chapter in his "History of French Law," traces the steps by which French lawyers gradually discarded delivery as the means of passing the property, and arrived at a rule similar to our own.5 Quasi-Contracts of Sale. The Act deals only with contracts of sale, properly so called. But there are certain quasi-contracts of sale which require to be noted. By a quasi-contract of sale is meant a transaction to which, independently of the will of the parties, the law annexes consequences similar to those which result from a sale. For example: 1 As to the old distinction between the action for goods bargained and sold and the action for goods sold and delivered, sce Bullen and Leake, Prec. of Plead., 3rd ed., pp. 8, 9. 2 See McBain v. Wallace (1881), 6 App. Cas., at pp. 695, 608; and Moyle's Sale in the Civil Law, p. 110. 3 See Blackburn on Sale, pp. 187-197, who finds traces of the rule as far back as the time of Edward 4. The history of the question is treated exhaustively in the judgment in Cochrane v. Moore (1890), 25 Q. B. D. 57, C. A. (gift of a horse). 4 See Blackburn on Sale, p, 167; Johnson v. Macdonald (1812), 9 M. & W. 600 (sale of goods to arrive); McEntire v. Crossley (1895), A. C., at p. 463 (hire-purchase). 5 Viollet, Histoire du Droit Français, pp. 515–523. See now French Civil Code, art. 1583. As to quasi-contracts, see Anson on Contract, 6th ed., p. 357. (1.) Where in an action for trespass to, or the conversion or wrongful detention of goods, the plaintiff recovers the full value of the goods as damages, and the defendant satisfies the judgment, the transaction operates as a sale of the goods from the plaintiff to the defendant as from the time when the judgment is satisfied.1 "The theory of the judgment in an action of detinue," says Jessel, M.R., "is that it is a kind of involuntary sale of the plantiff's goods to the defendant. The plaintiff wants to get his goods back, and the Court gives him the next best thing, that is the value of the goods. If he does not get that value then he does not lose his property in the goods.' It has been suggested that when the judgment is satisfied the defendant's title relates back to his wrongful act,3 but the doctrine of relation is not in accordance with the general principles of English law. An unsatisfied judgment does not transfer the property. 12 (2) Again, it has been held that where a plaintiff has been induced, by the fraud of a third person, to sell goods to an insolvent buyer, and such third person has afterwards obtained the goods himself, the plaintiff may waive the tort, and treat the transaction as a sale to such third person.* Sect. 1. Satisfied judgment in trover, trespass, or detinue. Sale induced by fraud. (3) So, too, there may be a sale by estoppel. Suppose a defendant Sale by sells specific goods to one person, and the documents of title to the estoppel. goods to another person, he would be liable to both, though a doubt might arise as to which person would be entitled to the goods. So too a person by holding himself out as the buyer may be liable as such. For further instances of quasi-contract, see notes to next section. Jenkins' 4th Cent. Cas., No. 88, as to trespass, citing the maxim, "Solutio pretii emptionis loco habetur"; Cooper v. Shepherd (1846), 3 C. B. 226, 15 L. J. C. P. 237; Brinsmead v. Harrison (1871), L. R. 6 C. P. 584, at p. 588, as to trover or conversion; Ex p. Drake (1877), 5 Ch. D. 866, C. A., as to detinue; cf. Eberle v. Jonas (1887), 18 Q. B. D., at p. 468. 2 Ex p. Drake (1877), 5 Ch. D. 866, at p. 871. C. A. Benjamin on Sale, 4th ed., p. 58; Hill v. Perrott (1810), 3 Taunt. 274; Roscoe's N. P., 15th ed, p. 493. 5 Cornish v. Abington (1859), 28 L. J. Ex. 262. As to property by estoppel, see Blackburn on Sale, 2nd ed., p. 190; Coventry v. Great Eastern Railway Co. (1883), 11 Q. B. D. 776 (two delivery orders for same goods); cf. Henderson v. Williams (1895), 1 Q. B. 521. |