promise to pay the price, the fact that the property is accidentally destroyed while in his possession does not relieve him from liability for the unpaid and subsequently accruing instalments of the price; and this is held true though the contract of sale did not contain an express promise on the part of the buyer to pay the price, the implied promise of the buyer in such a case being considered absolute to the same extent as though his note was given for the price or he had otherwise expressly promised to pay the same. The rule has been. carried to the extent of holding that where the seller retakes the property on the failure of the buyer to pay, and it is destroyed without fault of the seller while held by him as security for the price, the loss falls on the buyer. The reason for this view is that the buyer's right to the possession before default and his right to acquire the title by the payment of the agreed price constitute a valid consideration for his promise to pay which is not affected by the destruction of the property, and distinguishes the case from the ordinary executory contracts of sale under which the loss falls on the seller in case the property is destroyed before the title has passed. On the other hand, on the theory that the risk follows the title, the view is taken, in a number of jurisdictions, that, if the property is accidentally destroyed while in the hands of the buyer, the seller has no right to recover instalments of the price thereafter accruing; and this is held true

Va. 574, 75 S. E. 117, Ann. Cas. 1913D 335.

Notes: 89 Am. Dec. 129; 138 A. S. R. 903; 32 L.R.A. 458; 2 L.R.A. (N.S.) 99; 36 L.R.A.(N.S.) 595; 6 Ann. Cas. 685; 12 Ann. Cas. 711; Ann. Cas. 1913C 661; Ann. Cas. 1913D 338.

4. La Valley v. Ravenna, 78 Vt. 152, 62 Atl. 47, 112 A. S. R. 898, 6 Ann. Cas. 684, 2 L.R.A.(N.S.) 97.

3. Chicago Ry. Equipment Co. v. Merchants Nat. Bank, 136 U. S. 268, 10 S. Ct. 999, 34 U. S. (L. ed.) 349; Roach v. Whitfield, 94 Ark. 448, 127 S. W. 722, 140 A. S. R. 131; Hollenberg Music Co. v. Barron, 100 Ark. 403, 140 S. W. 582, Ann. Cas. 1913C 659, 36 L.R.A. (N.S.) 594; Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799, 138 A. S. R. 171; Burnley v. Tufts, 66 Miss. 48, 5 So. 627, 14 A. S. R. 540; Collerd v. Tully, 78 N. J. Eq. 557, 80 Atl. 491, Ann. Cas. 1912C 78; Tufts v. Griffin, 107 N. C. 47, 12 S. E. 68, 22 A. S. R. 863, 10 L.R.A. 526; Whitlock v. Auburn Lumber Co., 145 N. C. 120, 58 S. E. 909, 12 L.R.A. (N.S.) 1214; Lancaster v. Southern Ins. Co., 153 N. C. 285, So. 627, 14 A. S. R. 540; Tufts v. 6. Burnley v. Tufts, 66 Miss. 48, 5 69 S. E. 214, 138 A. S. R. 665; Har- Griffin, 107 N. C. 47, 12 S. E. 68, 22 ley v. Stanley, 25 Okla. 89, 105 Pac. A. S. R. 863, 10 L.R.A. 526; La Val188, 138 A. S. R. 900; Marion Mfg.

5. Hollenberg Music Co. v. Barron, 100 Ark. 403, 140 S. W. 582, Ann. Cas. 1913C 659, 36 L.R.A. (N.S.) 594. As a general rule, however, the retaking of possession by the seller releases the buyer from liability for the price. See supra, par. 785.

Co. v. Buchanan, 118 Tenn. 238, 99 ley v. Ravenna, 78 Vt. 152, 62 Atl. S. W. 984, 12 Ann. Cas. 707, 8 L.R.A. 47, 112 A. S. R. 898, 6 Ann. Cas. 684, (N.S.) 590; La Valley v. Ravenna, 78 2 L.R.A. (N.S.) 97.

Vt. 152, 62 Atl. 47, 112 A. S. R. 898, 7. Bishop v. Minderhout, 128 Ala. 6 Ann. Cas. 684, 2 L.R.A. (N.S.) 97; 162, 29 So. 11, 86 A. S. R. 134, 52 Exposition Arcade Corp. v. Lit, 113 L.R.A. 395; Tabbut v. American Ins.

though notes were given by the buyer and the right of the seller to recover on such notes as they fell due after the accidental destruction of the property has been denied. The parties may by express agreement determine where the loss shall fall in case of the destruction of the property before the price is paid. And, even though the accidental destruction of the subject matter of the sale will not ordinarily release the buyer from liability on his unconditional promise to pay the price, a distinction has been made in the case where it is contemplated by the parties that the price is to be paid from the earnings derived by the buyer from the use of the subject matter of the sale. Thus it has been held that the death of a stallion without fault of the buyer terminates further liability of the buyer for the price under a contract by which the title is to remain in the seller until the price is paid, and the price is to be paid out of the earnings of the animal.10

789. Receiver Appointed for Buyer.-Where locomotive engines were sold and delivered to a railroad company, notes to be given for the price, the title to the locomotives to remain in the seller until the notes were paid, and the receiver of the company subsequently surrendered them to the seller, the amount due for their use and injured condition when returned is only a general debt of the company, with no special equities in its favor. While ordinarily a receiver is not bound by the executory contracts of his predecessor unless he affirms or ratifies them, it has been held that receivers, who on taking possession of a railroad find there cars purchased by persons who assumed to act as receivers without authority, leaving the title in the seller to secure the price, cannot retain them without paying the contract price, and cannot acquire the title merely by paying what the property is worth.13

Rights of Buyer Generally

790. In General.-A buyer entitled to possession under a contract of sale, reserving title in the seller until the price is paid, has a special property in the subject matter of the sale which will entitle him to sue third persons for its wrongful taking, destruction or injury; 14

Co., 185 Mass. 419, 70 N. E. 430, 102 L.R.A. 395.
A. S. R. 3 3.

Notes: 14 A. S. R. 541; 22 A. S. R. 867; 139 A. S. R. 905; 32 L.R.A. 48; 2 L.R.A. (N.S.) 97; 6 Ann. Cas. 686; Ann. Cas. 1913D 338.

As to the general rule that the risk follows the title in ordinary executory contracts of sale. see supra, par. 310.

8. Bishop v. Minderhout, 128 Ala. 162, 29 So. 11, 86 A. S. R. 134, 52

9. Note: Ann. Cas. 1913D 338.

10. Swaney v. Alslott, 134 Ia. 63, 111 N. W. 406, 8 L.R.A.(N.S.) 1032.

11. Huidekoper v, Hinckley Locomotive Works, 99 U. S. 258, 25 U. S. (L. ed.) 344.

12. See RECEIVERS, vol. 23, p. 74. 13. Crawford v. Gordon, 88 Wash. 553, 153 Pac. 363, L.R.A.1916C 516. 14. Smith v. Gufford, 36 Fla. 481,

and in such a case he may, as a general rule, recover the full value of the property or to the full extent of the injury,15 and this is especially true as regards an injury to the subject matter of the sale when the seller appears as a witness for the buyer. 16 In this respect the buyer is regarded as occupying the same position as a bailee, with equal right to recover for the conversion or injury to the property.17 Thus it has been held that the consignment of a chattel through a common carrier to one who has purchased it on the understanding that the title thereto is not to vest in him until the price is fully paid gives him a special property in such chattel, and, if it is destroyed while in the carrier's possession, he is entitled to recover its full value from the latter.18 Also the legal presumption is that on the delivery of goods to a common carrier the title thereto vests in the consignee, and this presumption the carrier has a right to rely upon, in the absence of express notice from the consignor to the contrary, and the carrier, therefore, in the absence of such notice, has the right to settle with the consignee in case the property is lost, stolen, or destroyed; and this rule applies where goods are consigned by the seller to the buyer under a contract of sale reserving title in the seller until the price is paid; 19 and it has been held that the registration of the contract of sale, according to the provisions of a statute requiring such registration to render the reservation of title valid as against third persons, does not affect a carrier who has received the subject matter of the contract for transportation to the buyer, with notice of the fact that the title to the property is still in the seller, and hence, if the property is destroyed while in the carrier's hands, he may show, in bar of an action by the seller to recover its value, that a settlement has already been made with the buyer.20 If, after the injury to the subject matter of the sale, the seller retakes possession for the default of the buyer, this has been held to terminate the buyer's interest, and preclude him from thereafter suing for such injury.1

18 So. 717, 51 A. S. R. 37; Lord v. a bailee to sue for the conversion of Buchanan, 69 Vt. 320, 37 Atl. 1047, or an injury to the subject matter of 60 A. S. R. 933; Stotts v. Puget the bailment, see BAILMENTS, vol. 3, Sound Traction, etc., Co., 94 Wash. p. 127. 339 162 Pac. 519 L.R.A.1917D 214. Note: L R.A.1917D 217.

15. Smith v. Gufford, 36 Fla. 481, 18 So. 717, 51 A. S. R. 37; Lord v. Buchanan, 69 Vt. 320, 37 Atl. 1047, 60 A. S. R. 933.

Note: L.R.A.1917D 219.

16. Stotts v. Puget Sound Traction, etc.. Co., 94 Wash. 339, 162 Pac. 519, L.R.A.1917D 214.

17. Stotts v. Puget Sound Traction Co.. 94 Wash. 339, 162 Pac. 519, L.R.A.1917D 214. As to the right of

R. C. L. Vol. XXIV.-32. 497

18. Dyer v. Great Northern R. Co., 51 Minn. 345, 53 N. W. 714, 38 A. S. R. 506. As to the proper party plaintiff in actions against carriers of goods, see CARRIERS, vol. 4, p. 940 et

seq.

19. Dyer v. Great Northern R. Co., 51 Minn. 345, 53 N. W. 714, 38 A. S. R. 506. See CARRIERS, vol. 4, p. 941.

20. Dyer v. Great Northern R. Co., 51 Minn. 345, 53 N. W. 714, 38 A. S. R. 506.

1. Stotts v. Puget Sound Traction

791. Insurable Interest of Buyer.-One who purchases property under a conditional sale, the title to remain in the seller until full payment is made, has an insurable interest. Where the rule prevails that the destruction of the subject matter of the sale releases the buyer from further liability for the unpaid instalments of the price, it is held that, as the contract of insurance is one of indemnity only, the buyer cannot, on its destruction by fire, recover for the full value of the property, but only the sum which he has paid under the contract of sale, if there is nothing to show that he has suffered any damage other than the loss of his payments. It is otherwise, however, where the destruction of the property does not release the buyer from liability for the price. On the theory that a condition or warranty as to "unconditional and sole" interest or "ownership" merely requires that the interest of the insured be such that in case of the destruction of the property the entire loss will fall upon him, whether his title is legal or equitable, it has been held that, if the destruction of the subject matter of the sale will not release the buyer from liability for the unpaid part of the price, his interest is to be held sole and unconditional; it would be otherwise, however, where the rule prevails that the destruction of the property releases the buyer from further liability for the price; and, in a number of cases, the courts have held that the buyer could not be considered the sole and unconditional owner, even though his liability for the price would continue after the destruction of the property.9

792. Transfer by Buyer Generally.-Though it is the general rule that the buyer under contracts of sale by which the seller retains the title until the full price is paid cannot by a resale of the property,

Co., 94 Wash. 339, 162 Pac. 519, L.R.A.1917D 214 (explaining and distinguishing an earlier case to the above effect).

Note: L.R.A.1917D 218.

2. Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799, 138 A. S. R. 171; Tabbut v. American Ins. Co., 185 Mass. 419, 70 N. E. 430, 102 A. S. R. 353.

5. Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799, 138 A. S. R. 171.

6. See INSURANCE, vol. 14, p. 1052. 7. Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799, 138 A. S. R. 171; Lancaster v. Southern Ins. Co., 153 N. C. 285, 69 S. E. 214, 138 A. S. R. 665.

Note: 138 A. S. R. 670.

8. Tabbut v. American Ins. Co., 185 Notes: 20 Am. Dec. 513; 138 A. S. Mass. 419, 70 N. E. 430, 102 A. S. R. R. 670.

As to insurable interest in property generally, see INSURANCE, vol. 14, p. 910 et seq.

3. See supra, par. 788, as to the destruction of the property as affecting the buyer's liability for the price.

4. Tabbut v. American Ins. Co., 185 Mass. 419, 70 N. E. 430, 102 A. S. R. 353.

353.

9. Dumas v. Northwestern Nat. Ins. Co., 12 App. Cas. (D. C.) 245, 40 L.R.A. 358; Westchester v. Weaver, 70 Md. 536, 17 Atl. 401, 18 Atl. 1034, 5 L.R.A. 478; Dow v. National Assur. Co., 26 R. I. 379, 58 Atl. 999, 106 A. S. R. 728, 67 L.R.A. 479.

Notes: 138 A. S. R. 176; 7 Ann. Cas. 499.

even to a bona fide purchaser for value, affect the seller's rights,10 it is also held that the buyer has an interest which is capable of transfer so as to pass to his transferee his inchoate interest and enable the latter to perform the condition and perfect his title.11 And it has been held that though the contract provides that if the buyer shall sell, mortgage or pledge the property or fail in payments, the seller may take immediate possession, and hold the property free of all claims from the buyer, the latter may confer an interest on an assignee which will enable him to perfect the title by full payment of the price, and the attempted assignment does not forfeit all rights under the contract.12 If the buyer before acquiring a perfect title by paying the stated instalments sells or mortgages the property to a third person, the moment the title is perfected by him it passes to such third person.13 And for this reason it has been held that where the buyer executes a chattel mortgage on the property, and thereafter executes to the seller a new note and mortgage for the amount of the unpaid price, the latter mortgage extinguishes the reserved title of the seller and perfects that of the buyer, which inures to the benefit of the first mortgagee, giving his mortgage priority over the mortgage of the seller for the unpaid price, especially where the seller delays for some time in recording his mortgage.14 So where the seller takes judgment against the buyer for the price this confirms the title in the buyer and will enable one who has theretofore purchased the property from the buyer to hold the same as against the seller.15 After default, and the forfeiture of his rights under the contract, the buyer has no rights in the property which he can himself enforce or which he can transfer to a third person; 16 and it has been held that the buyer's right to the possession before default may be personal purely, as in case of other special bailments importing a personal trust, and where such is the case he cannot, even before default, transfer any right to retain the possession to a third person, and where he attempts to do so the

10. See supra, par. 752 et seq. 11. Fosdick v. Schall, 99 U. S. 235, 25 U. S. (L. ed.) 339; Thornton v. Findlay, 97 Ark. 432, 134 S. W. 627, 33 L.R.A. (N.S.) 491; Vincent v. Cornell, 13 Pick. (Mass.) 294, 23 Am. Dec. 683; Dame v. Hanson, 212 Mass. 124, 98 N. E. 589, Ann. Cas. 1913C 329, 40 L.R.A. (N.S.) 873; People's Furniture, etc., Co. v. Crosby, 57 Neb. 282, 77 N. W. 658, 73 A. S. R. 504; Bailey v. Colby, 34 N. H. 29, 66 Am. Dec. 752.

Notes: 23 Am. Dec. 685; 89 Am. Dec. 128; 40 L.R.A. (N.S.) 873; Ann. Cas. 1913C 332.

98 N. E. 589, Ann. Cas. 1913C 329, 40 L.R.A.(N.S.) 873.

13. Thornton v. Findlay, 97 Ark. 432, 134 S. W. 627, 33 L.R.A. (N.S.) 491.

Notes: 89 Am. Dec. 128; 40 L.R.A. (N.S.) 874; Ann. Cas. 1913C 332.

14. Thornton v. Findlay, 97' Ark. 432, 134 S. W. 627, 33 L.R.A. (N.S.) 491.

15. Francis v. Bohart, 76 Ore. 1, 143 Pac. 920, 147 Pac. 755, L.R.A. 1916A 922. See supra, par. 776, as to the effect of suing for the price on the right of the seller to retake posses. sion.

12. Dame v. Hanson, 212 Mass. 124,

16. Note: 89 Am. Dec. 129.