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These rules are framed according to circumstances as they may be, for it is from such circumstances that the intention must be inferred when the parties do not in words express their intention. In usual cases these rules would constitute the true indicia of intention; for that reason they are established as rules. But the intention of the parties to the contrary will overcome the rules, 50a
Sec. 56. RULES FOR ASCERTAINING INTENTION OF THE PARTIES: THE FIRST RULE. Unless a different intention appears, "where there is an unconditional contract to sell specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment, or the time of delivery, or both, be postponed." 51
If at the time of contract, the goods are ascertained and are then in a deliverable shape, the presumption is that the title is then to pass, though perhaps credit is given and the goods are not yet delivered. This presumption may be overcome by contrary evidence.
Example 20. A says “I will sell you this horse for $50." B says "I will take him” and it is arranged that B shall come the next day and pay for and get the horse, the presumption is that the horse immediately becomes B's.52
Sec. 57. RULES FOR ASCERTAINING INTENTION OF THE PARTIES. SECOND RULE. Unless a different intention appears "where there is a contract to sell specific goods, and the seller is bound to do something to the goods,
50a. Ellis & Myers Lumber Co. v. Hubbard, 96 S. E. (Va.) 754. 51. Uniform Sales Act, Sec. 19, Rule 1. 52. See Case v. Little Falls Lumber Co., 47 Minn. 422.
for the purpose of putting them into a deliverable shape, the property does not pass until such thing be done.” 58
As long as the seller must do something to the property for the purpose of putting it in a deliverable state, the presumption is that title has not passed.
Example 21. A contracted for sale of corn in cribs to B. A to shell it, haul it to elevator and there weigh it. Corn is not B's until these things have been done, unless facts show a contrary intention.54
There is a difference of opinion whether if weighing and measuring is to be done for the purpose of ascertaining the price, title will pass, these being otherwise in deliverable shape. The better rule seems to be, and it is the view permitted, though perhaps not made mandatory by the sales act, that the mere fact that the seller must measure or weigh will not prevent passing of title where the goods are otherwise in deliverable shape, so that title would pass, were there no question of weighing or measuring merely to ascertain the price. This rule that title does not pass so long as anything remains to be done to put into deliverable state is a rule of presumption only and title may pass before that time if the parties so intend.55
Sec. 58. RULES FOR ASCERTAINING INTENTION OF THE PARTIES. THIRD RULE. Unless a different intention appear “(1) When goods are delivered to the buyer 'on sale or return,' or on other terms indicating an
53. Uniform Sales Act, Sec. 19. Rule 2. 54. Orient Ins. Co. v. McKnight, 96 111. Ap. 525. 55. Ellis & Meyers Lumber Co. v. Hubbard, 95 S. E. (Va.) 754. intention to make a present sale, but to give the buyer an option to return the present goods instead of paying the price, the property passes to the buyer on delivery, but he may re-vest the property in the seller by returning or tendering the goods within the time fixed in the contract, or if no time has been fixed, within a reasonable time. (2) When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms, the property therein passes to the buyer (a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction, (b) if he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then, if a time has been fixed for a return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact.” 56
The above rule covers those sales wherein title is rot finally to pass until the buyer is satisfied by trial with the goods. The first paragraph of the rule relates to transactions in which there is an executed contract of sale, but the buyer may cause the title to revest; the second paragraph of the rule relates to transactions in which the buyer has the goods simply "on trial" that he may thereafter accept and purchase them if he so desires. It will be noted that the mere failure to make the return operates to pass the title, or if it has already vested, to make it absolute. The importance of distinguishing between the two transactions lies chiefly in the fact that risk of loss (where there is no negligence involved) follows the title in such cases, and in the fact that the creditors of the owner may seize his goods. These transactions must not be confused with that form of conditional
56. Uniform Sales Act.. Sec. 19. Rule 3.
sale in which the title is retained by the seller merely for purposes of security. Thus, if A sells goods to B under an agreement that B may return the goods any time within 30 days if he finds them unsatisfactory, the goods belong to B but he has a right to re-vest the title in A any time within the 30 days by returning them. When the 30 days have elapsed, B owns the goods absolutely with no right of return so far as this particular agreement is concerned. Until such return within 30 days, the goods are subject to seizure by the creditors of B. Risk of loss is upon B at all times from the time he gets the goods until he makes the return or makes a good tender of return. Or, suppose that B agrees with A that A may send him a washing machine "on trial" for 30 days. Under such circumstances B has not purchased the machine, and title will not pass to B until 30 days have elapsed, unless before the expiration of the 30 days he signifies his intention to take the machine. If B does not return the goods within 30 days, title will pass to him and he cannot thereafter return such machine. During the 30 days (unless B has before the end of the period signified his acceptance) the risk of loss is on A unless the loss occurs by B's negligence.57 The creditors of A also could seize the machine-B has no right in the machine against A's creditors because he is under no contract to purchase it.
There is a real distinction in cases of this kind. As one court has said: “An option to purchase if he likes is essentially different from an option to return if he should not like." 58 Example 22. A decides to buy a shock absorber for
The shock absorber is sold with a privilege of return. In this case A regards himself as purchaser of
57. Pence v. Carney, 78 Ark. 123. 58. Pence v. Carney, 78 Ark. 123.
and owner of the shock absorber, even if he does have a right to return it.
Example 23. An agent wishing to sell B a typewriter asks leave to put in B's office for a while that B may try it. No title passes here and the parties do not so regard it.
Sec. 59. RULES FOR ASCERTAINING THE INTEN. TION OF THE PARTIES. FOURTH RULE. Unless a different intention appears “(1) where there is a contract to sell unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied and may be given either before or after the appropriation is made. (2) Where in pursuance of a contract to sell, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to or holding for the buyer, he is presumed to have unconditionally appropriated the goods to the contract, except in the cases provided for in the next rule and in section 20. This presumption is applicable although by the terms of the contract, the buyer is to pay the price before receiving delivery of the goods, and the goods are marked with the words collect on delivery or their equivalents." 59
(a) Title passes upon appropriation of contract. Where the goods are unascertained, the title, as has been already noted, cannot pass. Upon ascertainment
59. Uniform Sales Act, Sec. 19. Rule 4. "Section 20" relates to reservation of title. See herein Sec. 60.