§ 34. What Are Goods, Wares, and Merchandise? The first question to be asked is, What are "goods, wares, and merchandise"? Originally these words were employed in their material sense as comprising corporeal, movable property, and the statute was held not to apply to sales of shares of stock, nor claims, nor choses in action, but today, at least in the United States, the words are construed to include all forms of personal property, whether tangible or existing only in contemplation of law, and also things in connection with the land, such as trees and growing crops, which are to be severed and title to which is to be given after the severance. That a share of stock fell under the classification of "goods, wares, and merchandise, was so decided in the case of Tisdale v. Harris.1 This was a case based upon a contract for the sale of shares in a manufacturing corporation. Chief Justice Shaw, one of the greatest judges that ever sat in an American court, delivered the opinion of the court, in the course of which he said:

"This being a contract for the sale of shares in an incorporated company, for the price of more than ten pounds, and no part having been delivered, and no purchase money or earnest paid, the question is whether it can be allowed to be good, without a note or memorandum in writing signed by the parties to be charged with it. This depends upon the question whether such shares are 'goods, wares, and merchandise' within the true meaning of the statute. We are inclined to the opinion that the weight of authorities in modern times is that contracts for the sale of stocks and shares in incorporated companies for more than ten pounds, are not valid, unless there has been a note or memorandum in writing, or earnest, or part payment.

"Supposing this a new question now for the first time calling for a construction of the statute, the court are of the opinion that as well by its terms as its general policy, stocks are fairly within its operation. The words, 'goods and merchandise' are both of very large significance. 'Bona', as used in the civil law, is almost as extensive as personal property itself, and in many respects it has nearly as large a significance in the common law. The

1 20 Pick. 9.

word 'merchandise', also including in general objects of traffic and commerce, is broad enough to include stocks or shares of incorporated companies."

§ 35. Does the Statute Cover Executory Contracts? The expression in the statute, "no contract for the sale of any goods", etc., soon gave rise to conflict of opinion as to whether it referred only to an executed contract of sale conveying immediate title, or whether it referred to an executory agreement of sale also, that is, agreements for future delivery. The controversy was closed in England by the passage of what is known as Lord Tenterden's Act (1829), which specifically provided that "the provisions of the seventeenth section should extend to all contracts for the sale of goods, even though the delivery was to be at a future time, and although the goods at the time of the contract were not in existence." As an example of the need of this statute, the case of Towers v. Osborne,2 may be mentioned. This was an action brought on an agreement to make and furnish a chariot or carriage. As the contract involved the delivery in the future of an article not in existence at the time the contract was made, it was held that it did not fall within the statute. Lord Tenterden's Act brought such cases within the terms of the statute.

CONTRACTS OF SALE OR CONTRACTS FOR LABOR AND MATERIALS

Many controversies arose under the statute in England upon the question whether a contract was one for the sale of goods, or one to provide labor and materials. A contract to provide labor and materials would not fall within the statute. Suppose a printer enters into a contract to print a second edition of a work, previously published by him for the same party, the printer to furnish the paper and materials. Is this a contract for the sale of a book to be delivered at a future time, or a contract for the production of a thing to be sold when completed, or a contract for work, labor, and materials? In Clay v. Yates,3 it was held that the contract was for work and labor, and

21 Strange 506.

3 25 L. J. Ex. 237.

did not fall within the statute. The test applied has been called the "essential ingredient" test, and was so expressed in the opinion of the court. The true criterion is, whether work is of the essence of the contract, or whether it is the materials supplied.

§ 36. Tests Employed in the United States. Whether a contract is one of sale or a contract for labor and materials has caused in this country also great diversity of opinion, and has resulted in the adoption of different rules or tests for settling the question. The most widely accepted rules are known as the "English Rule", laid down in 1861; the "Massachusetts Rule", laid down in 1839; and the "New York Rule", laid down in 1871. Maryland and a few other States have adopted rules of their own. Missouri alone appears to have fully accepted the English Rule.

English Rule. It was not until 1861 that the English doctrine was finally established in the case of Lee v. Griffin. This was an action brought by a dentist to recover twenty-one pounds for two sets of artificial teeth made for a lady who had died before the teeth had been finally fitted for her. The teeth were not delivered nor tendered, until after the death of the lady ordering them. Her executor pleaded that the contract was void under the Statute of Frauds, meaning that there should have been part payment, or part delivery and acceptance, or some note or memorandum of the transaction. The dentist maintained that it was a contract for work, labor, and skill, the materials furnished being secondary matter. The court held the contract to be within the statute, that it was a sale of "goods, wares, and merchandise", and that the plaintiff was not entitled to recover. The English doctrine laid down in that case by Crompton, J., is as follows:

"When the contract is such that a chattel is ultimately to be delivered by the plaintiff to the defendant, when it has been sent, then the cause of action is goods sold and delivered."

4 30 L. J. Q. B., 252, 1 Best & Smith 272.

And by Blackburn, J., in the following language:

"If the contract is such that it will result in the sale of a chattel the proper form of action, if the employer refuses to accept the article when made, would be for not accepting. But if the work and labor be bestowed in such a manner as that the result would not be anything which could properly be said to be the subject of sale, then an action for work and labor is the proper remedy."

Massachusetts Rule. The Massachusetts rule was laid down by Chief Justice Shaw in Mixer v. Howarth," which involved the building of a carriage, in the following language:

"It is very clear, we think, that by this contract no property passed to the defendant. The carriage contemplated to be sold by the plaintiff to the defendant, did not then exist. It was to be constructed from materials, partly wrought indeed, but not put together. It was, therefore, essentially an agreement by the defendant with the plaintiff, to build a carriage for him, and on his part to take it when finished and pay for it, at an agreed or at the reasonable value. This is a valid contract and made on a good consideration, and therefore binding on the defendant. But it was not a contract of sale, within the meaning of the Statute of Frauds, and therefore need not be proved by a note in writing.

"When the contract is a contract of sale, either of an article then existing, or of articles which the vendor usually has for sale in the course of his business, the statute applies to the contract, as well where it is to be executed at a future time, as where it is to be executed immediately. But where it is an agreement with a workman to put materials together and construct an article, to be completed in future, it is not a sale until an actual or constructive delivery and acceptance; and the remedy for not accepting is on the agreement.

New York Rule. The New York doctrine will be found first laid down in the case of Parsons v. Loucks. The facts were that the plaintiffs ordered of the defendants, who were paper manufacturers, ten tons of book paper, to 5 21 Pickering (Mass.) 205. € 48 N. Y. 17, 8 Am. Rep. 517.

be manufactured and delivered by the defendants within a certain future time. The question was whether the contract for goods to be manufactured thereafter came within the statute. The court, in rendering this decision, through Hunt, C., said:

"The paper to be delivered was not in existence at the time of the making of the contract in October, 1862. It was yet to be brought into existence by the labor and the skill of the defendants. Of the 20,000 pounds to be delivered, not an ounce had been manufactured. It was all of it to be created by the defendants, and at their mill. In such a case, it is well settled that the Statute of Frauds does not apply to the contract. The distinction is between the sale of goods in existence, at the time of making the contract, and an agreement to manufacture goods. The former is within the prohibition of the statute, and void unless it is in writing, or there has been a delivery of a portion of the goods sold or a payment of the purchase price. The latter is not. The statute reads, 'every contract for the sale of any goods, chattels or things in action, for the price of $50 or more, shall be void unless, etc.," the statute alludes to a sale of goods, assuming that the articles are already in existence.”

Four years later this rule was affirmed in the case of Cooke v. Millard,8 in which an action was brought to recover the price of certain lumber sold and delivered. At the time of the contract the lumber was not in a deliverable condition and needed to be cut into proper sizes and dressed to comply with the defendant's order. After this was done, and while the lumber was on the dock awaiting shipment, it was destroyed by an accidental fire.

Rules Compared-Cooke v. Millard. The New York doctrine is so fully explained in this case and compared with the Massachusetts and the English rules that we quote a large part of the opinion of the court delivered by Dwight, Commissioner, a scholarly and learned jurist:

"The contract was plainly executory in its nature. There were no specific articles upon which the minds of the buyer 8 65 N. Y. 352, 22 Am. Rep. 619.

72 R. S. 136, § 3.