faith in the refusal to accept is upon the seller; the buyer, when he refuses to accept the article on the ground that it was unsatisfactory, is not required to show that he acted in good faith in rejecting the article or that it was not in fact satisfactory to him.15 In other cases the view is taken that where it is stipulated that an article to be furnished shall, unqualifiedly, be satisfactory to the buyer, the right to reject the article, as not being satisfactory, cannot be inquired into; but the party's own determination must be taken as final and conclusive; that in such case it is supposed, and such is the construction, that the party has reserved to himself an unqualified option, and is not willing to leave his freedom of choice to any contention, or to be subject to any investigation whatever, and the court has no right or power to say that the article was of a quality or character that ought to have been accepted as satisfactory; that is a matter expressly reserved to the buyer to decide for himself, and the motive for his decision, whether good or bad, is placed by the contract beyond question or investigation.16 730. Approval by or Satisfaction of Third Person Generally.-Even though the rule prevails that the motive of the buyer in rejecting the article cannot be inquired into where the provision is that the article is to be satisfactory to him, this principle does not apply, in its unqualified form, in a case where the contracting parties have stipulated that the article to be supplied shall be such, in respect to the quality or otherwise, as shall be approved by or satisfactory to some third person, though that third person may be an agent or an employce of one of the partics to the contract. In such case, though it is made a condition precedent that the article shall be approved by the person designated, yet if it can be shown that the approval has been withheld from motives of selfish interest, bias, partiality or corruption, the party prejudiced by such action may notwithstanding the absence of such approval recover on the contract for the nonacceptance of the article furnished. In such contracts, it is an implied condition that the person designated to approve shall act with entire good faith to both of the contracting parties.18 It is not essential, 12 Ann. Cas. 387, 8 L.R.A. (N.S.) 1140; Hollingsworth v. Colthurst, 78 Kan. 455, 96 Pac. 851, 130 A. S. R. 352. 18 L.R.A. (N.S.) 741; Livesley v. Johnston, 45 Ore. 30, 76 Pac. 13, 106 A. S. R. 647, 65 L.R.A. 783; Adams Radiator, etc., Works v. Selinader, 155 Pa. St. 394, 26 Atl. 745, 35 A. S. R. 893. Notes: 33 Am. Rep. 354; 54 Am. Rep. 713; 45 A. S. R. 871; 17 L.R.A. 210. 15. Inman Mfg. Co. v. American R. C. L. Vol. XXIV.-28. 433 Cereal Co, 133 Ia. 71, 110 N. W. 287 12 Ann. Cas. 387, 8 L.R.A. (N.S.) 1140. 16. Baltimore, etc., R. Co. v. Brydon, 65 Md. 198, 3 Atl. 306, 57 Am. Rep. 318; Wood Reaping, etc., Mach. Co. v. Sn.ith, 50 Mich. 565, 15 N. W. 906, 45 Am. Rep. 57. See also Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741. 17. See the next preceding para18. Baltimore, etc., R. Co. v. Bry graph. where the article is rejected by such third person in bad faith, that the rejection should have been procured through any action of the buyer or any collusion between him and such third person; and the rejection may be in bad faith though it may not have proceeded from a design to injure, deceive, or defraud the seller, but it is sufficient to constitute a fraudulent rejection if it was made to advance some interest of the third person or unjustly to benefit the buyer.19 Thus where a railroad company entered into a contract for the purchase of coal and it was provided that the coal to be furnished should be satisfactory to its master of transportation, the judgment of such officer in rejecting the coal tendered must be exercised fairly and honestly; and the same has been held true when a contract for the purchase of ice after providing for the delivery of good stock of a certain thickness further provided that the ice tendered should be approved by an agent of the buyer. The burden is on the seller to prove that the third person's rejection was in bad faith and such proof must be clear and satisfactory. This is in pursuance of the general principle that the presumption is always against fraud, and that it is not to be assumed. on doubtful evidence, but the facts constituting it must be clearly and satisfactorily established. The fact that no reasonable grounds for the third person's rejection existed has been held insufficient to show that the rejection was fraudulent or in bad faith.4 · 20 731. Reasonableness of Third Person's Grounds for Rejection.-As regards the reasonableness of the rejection of the article tendered the better view is that in the absence of fraud or bad faith in the conduct of such third person, in respect to the fact of his approval or the withholding it, his judgment or determination is to be accepted as final and conclusive. No mere error or mistake of judgment will vitiate his determination. The very object of his appointment is to prevent and exclude contention and litigation; hence nothing short of fraud or mala fides in the exercise of his power to reject or approve don, 65 Md. 198, 611, 3 Atl. 306, 9 Atl. 126, 57 Am. Rep. 318; Livesley v. Johnston, 45 Ore. 30, 76 Pac. 13, 106 A. S. R. 647, 65 L.R.A. 783; Barrett v. Raleigh Coal, etc., Co., 51 W. Va. 416, 41 S. E. 220, 90 A. S. R. 802. 19. Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741 (holding that it was reversible error to instruct that to constitute fraud the jury must find that the rejection proceeded "from a design to injure, deceive or defraud" the seller). 20. Baltimore, etc., R. Co. v. Brydon, 65 Md. 198, 611, 3 Atl. 306, 9 Atl. 126, 57 Am. Rep. 318. 1. Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741. 2. Inman Mfg. Co. v. American Cereal Co., 133 la. 71, 110 N. W. 287, 12 Ann. Cas. 387, 8 L.R.A. (N.S.) 1140; Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741. 3. Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741. 4. Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741. As to whether reasonable grounds for the rejection by the third person must exist, see the next following paragraph. the article contracted for will dispense with the strict legal effect of the condition precedent. Likewise his approval, in the absence of fraud or bad faith, is conclusive on the buyer. 732. General Duty of Buyer as to Care, Use and Return.-Ordinarily where personal property is delivered upon the understanding that if it proves satisfactory or suitable to the wants of the receiver he will keep it and pay for it, but if unsatisfactory he will return the identical property, a mere bailment is created, and title does not pass until he has exercised his option, or until the fixed or a reasonable time in which to exercise it has elapsed. And for the reason that the title does not pass, any loss or damage from any cause except through negligence of the buyer rests upon the seller. If the buyer notifies the seller that the article is unsatisfactory he is not required, it seems, to make an actual return of the article unless so required by the contract but may hold it subject to the order of the seller. If, however, the contract provides for a return of the goods if not satisfactory, the buyer cannot relieve himself of liability for the price unless he returns or offers to return them, and the offer to return must be unconditional, and ordinarily the buyer has no right to retain possession as security for a claim he may have against the seller growing out of the contract.10 Where the buyer agrees to pay for the article. at the expiration of a certain time on condition that it is satisfactory the contract to pay becomes absolute at the expiration of that time, unless within a reasonable time he offers to return it and gives notice of his dissatisfaction.11 And if the buyer keeps the article, without notice of his dissatisfaction, he cannot recoup damages in an action for the price by reason of its failure to work as it ought, but is bound to pay the full price.12 733. Duty as to Trial of Article.-Where machinery is sold and guaranteed to work satisfactorily to the buyer, it is ordinarily the 5. Lynn v. Baltimore, etc., R. Co., 60 Md. 404, 45 Am. Rep. 741; Livesley v. Johnston, 45 Ore. 30, 76 Pac. 13, 106 A. S. R. 647, 65 L.R.A. 783; Barrett v. Raleigh Coal, etc., Co., 51 W. Va. 416, 41 S. E. 220, 90 A. S. R. 802. 6. Nofsinger v. Ring, 71 Mo. 149, 36 Am. Rep. 456. 7. Sturm v. Boker, 150 U. S. 312, 14 S. Ct. 99, 37 U. S. (L. ed.) 1093; Gottlieb v. Rinaldo, 78 Ark. 123, 93 S. W. 750, 6 L.R.A. (N.S.) 273. Note: 6 L.R.A. (N.S.) 273. 8. Sturm v. Boker, 150 U. S. 312, 14 S. Ct. 99, 37 U. S. (L. ed.) 1093; Gottlieb v. Rinaldo, 78 Ark. 123, 93 S. W. 750, 6 L.R.A. (N.S.) 273 (loss while in the hands of the carrier by whom the buyer reshipped to the seller). Note: 6 L.R.A. (N.S.) 273. It is otherwise when the contract is one of "sale or return," under which the title vests in the buyer, subject to a right merely to return. See supra, par. 725. 9. Note: 1 L.R.A. 646. 10. Note: 50 L.R.A. (N.S.) 809, 811. 11. Dewey v. Erie Borough, 14 Pa St. 211, 53 Am. Dec. 533. 12. Campbell Printing Press Co. v. Thorp, 36 Fed. 414, 1 L.R.A. 645. Note: 50 L.R.A. (N.S.) 813. duty of the buyer to test the machine fairly.18 And it seems that where the contract requires the trial of the machine for a certain period of time, it is the duty of the purchaser to give the machine this trial. And ordinarily, he cannot reject it before the expiration of the entire time fixed for the trial, on the ground that it does not comply with the agreement and it is useless to proceed.15 Where a contract for the sale and installation of a heater for a dwelling house, to be satisfactory to the buyer, further provides that it shall have a fair and reasonable trial, this contemplates a trial by the householder under the supervision and attendance of the ordinary household servants and does not require that the buyer employ skilled plumbers and engineers to operate it.16 Where an article was delivered under an agreement to try it within a specified time according to directions, and to pay for it if it works according to representations, it has been held that the buyer is not required to make the test before returning the article, where, from a test of a similar article by others, it is conclusively demonstrated that the article is incapable from its construction of complying with the agreement.' 17 734. What Constitutes Approval by Buyer Generally.-Where the time within which the buyer is to be permitted to try or test the article and express his disapproval and give notice thereof is fixed by the contract, he must comply with such requirements; otherwise his retention of the property after the time fixed will be considered as an approval and acceptance making the sale absolute.18 And while the buyer, if no time is fixed for the rejection of the article as unsatisfactory, has a reasonable time to act, 19 he is entitled to try it for a reasonable time only, and if he uses it for an unreasonable time, such use constitutes an acceptance.20 And though the contract contains no express provision for notice by the buyer of his dissatisfaction or rejection, he is required to give such notice within a reasonable time; otherwise he will be deemed to have accepted.1 Ordinarily one purchasing property on trial for a certain period of time has the full period agreed on for the trial, and in the absence Note: 50 L.R.A. (N.S.) 810. 15. Note: 50 L.R.A.(N.S.) 810. 16. Adams Radiator, etc., Works v. Schnad r, 155 Pa. St. 394, 26 Atl. 745, 35 A. S. R. 893. 17. Note: 50 L.R.A.(N.S.) 810. 18. Buckstaff v. Russell, 151 U. S. 1. Notes: 50 L.R.A. (N.S.) 808, 4 of any stipulation on the point, he has a reasonable time after the expiration of it in which to reject the article. A requirement that the article purchased shall be returned "at once" if unsatisfactory has been held to be complied with if returned as soon as this can reasonably be done, under the circumstances. Whether, under the facts and circumstances of the case at bar, the use of property beyond the time fixed for its return was such as to constitute a waiver of the right to rescind is generally a question for the jury. It has been held that including in a mortgage by a corporation to its president, to secure him against liability upon indorsements made for its benefit, a machine which had been bought on approval to be returned if it did not prove satisfactory does not, if made before the test to determine whether it was satisfactory or not was completed, conclusively show acceptance of the machine, so as to preclude its return. Ordinarily, however, a sale or mortgage of the property by the buyer would be conclusive evidence of his acceptance of the same as satisfactory. 735. Effect of Continued Use.-After the buyer subjects the property to the specified tests or has notified the seller of his disapproval and intention not to accept the article, he must hold it as the property of the seller, and he cannot thereafter exercise rights with respect to it inconsistent with his repudiation of the sale, and at the same time rely on his right to reject, and ordinarily if he does so, he will be held to have accepted and approved the article. Thus where a buyer of an engine on approval, who tried it, and then, after notifying the seller's agent that he would not accept it, with no special exigency to make its use unavoidable, used it to finish a job, it has been held that he thereby exercised his election to retain the engine, and could not subsequently repudiate the contract, even though he had further time to try it under the contract, if he declared he did not so desire, and the subsequent use was not for trial. If, however, the continued use of the article is at the request of the seller to give it a further trial, the buyer's right to reject it as unsatisfactory is not lost.9 2. Note: 50 L.R.A. (N.S.) 809. 3. Note: 14 Ann. Cas. 331. 4. Cedar Rapids Nat. Bank v. Weber, (Ia.) 164 N. W. 233, L.R.A. 1918A 432. 5. Harrison v. Scott, 203 N. Y. 369, 96 N. E. 755, 38 L.R.A. (N.S.) 1035. 6. Note: 38 L.R.A. (N.S.) 1035. 7. Fred W. Wolf Co. v. Monarch Refrigerating Co., 252 Ill. 491, 96 N. E. 1063, 50 L.R.A. (N.S.) 808; Fox v. Wilkinson, 133 Wis. 337, 113 N. W. 669, 14 L.R.A. (N.S.) 1107. Notes: 14 L.R.A. (N.S.) 1107: 36 L.R.A. (N.S.) 469; 50 L.R.A. (N.S.) 812. 8. Fox v. Wilkinson, 133 Wis. 337, 113 N. W. 669, 14 L.R.A. (N.S.) 1107. 9. Notes: 14 L.R.A. (N.S.) 1108; 50 L.R.A. (N.S.) 812. |