.,_ Cornell University Library KF 915.T56 Hand-book on the law of sales / 3 1924 018 845 176 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31 92401 88451 76 B Of elementary treatises on all the principal subjects of the law. The special features of these books are as follows : 1. (^ 0uccincf 0fafcmenf of fearing principfea in fifocS; feffer fgpc. 2. (^ more 6xttnt>cb commcnf arg, efucibafing f ^ principfcH. 3. (Ttofce an^ ciuf^orities. 4. ^rofifcme anii ^pof^cficaf cafee fo feft f^e efubenf'e finot»fe^ge. Published in regular octavo form, and sold at the uniform price of ^3-75 pcf Dofume, incfubing ^efioere. (jtott) (gea^g: 1. (Uorfon on (gitfe anii (tlofce. 2. Cfarft'6 Crtmmaf feftw. 3. ^^ipmftn'e Common;£a<» (Jjfeabmg. 4. Cfarfi on Contract 0. 5. (jSfacS on €on0fifufionaf fcaw. y 6. Setter on €quifg. 7. CfftrS on Criminaf (JJro;eliure. X 8. ^iffang on ^ftie0. (Itearfg (gegjig: " ^iffang on ®ome0fic (Refftfton0. y^ftggcir^ on $orf0. ^^ipmtin'e (gqutfg ^feabing. (Btenn on 3nfemaf ionaf feauj. ^mif5'0 6femenfftr6 £ttt». (ttt^CKcfuee on (Bt3ii>cnce. 3o5n0on on (Erfraorbinarg (gemebtes. (J^fftcS on €on0fructton arii) 3nferprefation of &at». to foffoto: j5ani»6oo60 of f^e £at» of (§aifmcniB, (Btjtlience, Corporofiotio, (^gencg, Seiieraf (Jiroce^ure, (geaf ^roperfg, (Jlarfnere^tp, ^rwafe ^nfernafionaf £ai». &i^tt 0u6)ecf0 in preparofion fo fie announced) fafer. "Wtet QpuBftB^ing Co., gt (pauf. (Utinn. HAND-BOOK OF THE LAW OF SALES By FRANCIS B.'^TIFFANY Author of Death.by Wrongful Act St. Paul, Minn. WEST PUBLISHING CO. 189s . Copr RIGHT, 1895, BY WEST PUBLISHING COMPANY. PREFACE. The object of this iW^llbook is to present concisely the general principles of the law of the sale of personal property. The arrange- ment is in the main that of Benjamin. The statement of rules and principles in the black-letter text has to a considerable extent, though with many modifications, necessitated by the difterences between the American and English law, or by other reasons, been taken from the English Sale of Goods Bill, as drafted by his Honor, Judge Chalm- ers, and published together with his invaluable notes under the title of " The Sale of G-oods." This bill, which was purely a codify- ing measure,' has since been substantially enacted as "An act for codifying the law relating to the sale of goods" (."i(i & 57 Vict. c. 71; February 20, 1894). The writer has made frequent use both of the notes of Judge Chalmers and of the text of Benjamin on Sales. The references to Benjamin are to the sections as found in the sixth American edition, of Messrs. Edmund H. and Samuel 0. Bennett. F. B. T. St. Paul, June 1, 1895. SAi/ES (iii)* TABLE OF CONTENTS. CHAPTER I. FORMATION OF THE CONTRACT. Section Pape 1-5. In General 1-5 6. Capacity of Parties 6 7. Capacity of Infants 6-11 8. Capacity of Lunatics and Drunken Men 12-14 9. Capacity of Married Women 14-1 (J 10. Who May Sell lG-22 11-13. The Thing Sold 22-2(j 14. Mutual Assent 27-30 15. Form of Contract 31-32 lG-17. The Price 32-34 CHAPTER II. YfORMATION of CONTRACT (Continued)— UNDER THE STATUTE OF •""y FRAUDS. 18-20. What Contracts are "Within the Statute 35^3 21-22. What are Goods, Wares, and Merchandise 43-49 23. What is a Contract for the Price or Value of £10 i.f.ji)) 49-50 24-20. Acceptance and Receipt 51-53 27-29. Acceptance 53-60 30-31. Actual Receipt 60-64 32-33. Earnest or Part Payment C4-66 34-36. The Note or Memorandum 66-74 37-38. Signature of the Party 74-76 39-40. Agents Authorized to Sign 76-80 41. Effect of Noncompliance with the Statute 80-81 CHAPTER jpi. EFFECT OF THE CONTRACT IN PASSING THE PROPERTY— SALE OF SPECIFIC CHATTEL. 42. In General 82-83 43. Sale Unconditionally 83-84 SAIiES (Vj Vi TABLE OF CONTENTS. Section P^se 44. Rules for Ascertaining Intention 85-88 45. Conditional Sale Accompanied lij- Delivery 89-91 46. Sale on Trial or Approval 91-92 47. Sale or Return 92-93 CHAPTER IV. EFFECT OF THE COXTR.\CT IN TASSIXtJ THE TRf jTEI'/rY (Continued) -i^ALE OF CHATTEL NOT SI'ECIFIC. 48-49. In General 94-96 •Mj-.jo. Subsequent Aiipiopriatiun 97-104 54-56. Resei-vation of Kiglit of Disposal 104-107 CHAPTER V. MI.STAKE, FAIHREOF COXSIDBRATIOX. AND FRAUD. 57-58. Mistake 108-109 59. Failure of (.'onsideration 109-111 ( ;0-01. Fraud 111-118 (•,2-00. Election to .\fflrra or Rescind for Fraud 119-124 G7-r,:i. Fraud on Creditors 124-128 70. How far Delivery is Essential to tbe Transfer of the Prop- erty against Creditors and Purcliasci s 128-132 CHAPTER VI. ILLEGALITY. 71-72. In General 133 73-75. Sales Prohibited by Com men Law 134-137 76. Sales Prohibited by Public Policy 137-139 77. Sales Prohibited by Statute 139-145 78-81. Effect of Illegality 145-148 82. Conflict of Laws 149 CHAPTER VII. CONDITIONS AND WARRANTIES. 83-84. In General 150-152 85. Performance of Conditions Precedent 152-155 86. Condition in Sale by Description 155-157 TABLE OF CONTENTS. Vll Section 87-89. 90-91. 92-93. 94. 95. Page Excuses for Nonperformance of Conditions 157-161 Warranties 101-102 Express Warranties 102-104 Implied WaiTanty of Title 1(>5-1G7 Implied Warranties of Quality 107-177 CHAPTER Vin. PERFORMANCE OF CONTRACT. 96-97. In General 178-179 98. Moaning of "Delivery" 179-182 99-100. Place and Time of Delivery 182-187 101-103. Delivery of Wrong Quantity 187-192 104. Delivery of Installments 192-195 105. Delivery to Carrier 195-196 106. Duty to Insure Safe Arrival 196-197 107. Buyer's Right of Examination 197-198 108. Acceptance 198-200 109-110. Payment 200-203 CHAPTER IX. RIGHTS OP UNPAID SELLER AGAINST THE GOODS. 111. In General 204 112-116. Seller's Lien 204-213 117-121. Stoppage in Transitu 213-220 122. Right of Resale 226-230 CHAPTER X. ACTION FOR BREACH OF THE CONTRACT. 123-124. Remedies of Seller— Where Property has not Passed 231-232 125. Measure of Damages for Nonacceptance 232-233 126. Where Property has Passed 233-234 127. Remedies of the Buyer— Action for Nondelivery 2o.j 128. Measure of Damages 235-240 129. Specific Performance 240-241 130. Action for Conversion 241-242 131. Breach of Warranty of Quality— Right to Reject 242 132. Rights after Acceptance 243-244 133. Measure of Damages for Breach of Warranty 244-250 t HANDBOOK OF THE LAW OF SALES. CHAPTER I, FORMATION OP THE CONTRACT. 1-5. In General. 6. Capacity of Parties. 7. Capacity of Infants. 8. Capacity of Lunatics and Drunken Slen. 9. Capacity of Married Women. 10. Wlio May Sell. 11-13. Tbe Thing Sold. 14. JIutual Assent. 15. Form of Contract. 16-17. The Price. IN GENERAL. 1. SALE DEFINED— A sale is the transfer of the prop- erty in a thing for a price in money. ^ 1 The following are some of the definitions of "sale": "A transmutation of property from one man to another in consideration of some price." 2 Bl. Comm. 446. "A contract for the transfer of property from one person to another for a valuable consideration." 2 Kent, Comm. (12th Ed.) 468. "A transfer of the absolute or general property in a thing for a price in money." Benj. Sales (0th Am. Ed.) § 1. "Sale is the exchange of property for a price. It involves the transfer of the ownership of the--thing sold from the seller to the buyer." Indian Contract Act 1872, § 77. "Sale is an exchange of property for a price in money. It involves the transfer of the ownership of the thing sold by the seller to the buyer." Kerr, Dig. Law Sale, § 2. See Blackb. Sales, Introduc- tion; Chalm. Sale, § 1; Williamson v. Berry, 8 How. 544. SALES — 1 2 FOKMATION OF THE CONTRACT. [Cll. 1 2. HOW EFFECTED— The sale of personal property is effected by a contract of sale. 3. EXECUTED CONTRACT — A contract whereby the o-wner (the seller) of the thing which is the subject-matter of the contract and another person (the buyer) agree that the property in the thing is transferred from the seller to the buyer, for a price in money w^hich the buyer pays or agrees to pay, is called a "bargain and sale," a "sale," or an "executed contract of sale." 4. EXECUTORY CONTRACT— A contract whereby the seller and the buyer agree that the property in the thing shall be transferred to the buyer at a future time or on the performance of a condition, for a price in money w^hich the buyer pays, or agrees to pay, is called an "executory contract of sale." 5. ELEMENTS OF CONTRACT— To constitute a sale there must be: (a) Parties (seller and buyer) competent to contract. (b) A thing, the property in -which is in the seller. (c) An agreement by the parties that the property in the thing is transferred from the seller to the . buyer. (d) Payment, or an agreement for payment, of a price in money by the buyer to the seller. Diitingimhinrj Features of Sale. The essence of a sale is the transfer of the property in the tiling from buyer to seller for a price. The elements which distinguish a sale from other transfers are (1) that the transfer is of the prop erty, and (2) that it is for a price. Tlie transfer must be of the general property or ownership, as distinguished from a special property,^ or from the right to posses- sion; for the general property may be in one person, and a special 2 As to the distinction between "tlie" property (that is, the seneral property) and "a" property (that is, a special jiropi'i-ty), see Burdicli v. Sewell, 13 Q. B. Div. at page 175, 10 App. Gas., at page 93. ^h. 1] IN GENERAL. 3 property in another. Thus, in the case of a pledge the pledgee has only a special property, and the general property remains in the pledgor,' who c^n transfer the general property to a third person, subject to the special property in the pledgee.* Again, the en- tire right of property may be in one person, while the right to possession may be in another. Thus, a man may sell goods, and retain a lien for their price. = It is transfer of ownership which distinguishes a sale from a bailment, of which a pledge is only an example. In a bailment, at most, only a special property passes to the bailee, who receives possession for a special purpose, and is bound to return the thing received;" or, as in the case of a con- s' Halliday V. Holgate, L. R. 3 Exch. 299; Donald v. Suckling, L. E. 1 Q. B. 585; Harper v. Godsell, L. R. 5 Q. B. 424; Cortelyou v. Lansing, 2 Gaines, •Cas. (N. Y.) 200. A chattel mortgage differs from a pledge in that by a mort- gage the general title is transferred. Jones, Chat. Mortg. § 4. It differs from a sale in that the transfer is defeasible on performance of the condition. Jones, •Chat. Mortg. § 8. E.x parte Hubbard, 17 Q. B. Div., at page 098; In re Morritt, 18 Q. B. Div., at page 232; Jones v. Baldwin, 12 Pick. 310; Rarshall v. Eggart, 52 Barb. 307. i Franklin v. Neate, 13 Mees. & AV. 481; Jenkyns v. Brown, 14 Q. B. 490; Whitaker v. Sumner, 20 Pick. 399. 5 Post, p. 204 et seq. The general test of bailment or sale is whether or not it is the intention of the parties that the thing received shall be returned. If the identical thing is to be returned, though in altered form, as in the case of logs to be made into boards, leather into shoes, or wheat into flour, the transaction is a bailment. Pierce v. Schenck, 3 Hill, 28; Foster v. Pettibone, 7 N. Y. 433; Westcott v. Thompson, 18 X. Y. 363; Eldridge v. Benson, 7 Cush. 4a3: Mansfield v. Con- verse, 8 Allen, 182; Schenck v. Saunders, 13 Gray, 37; Barker v. Roberts, S Greenl. (Me.) 101; Brown v. Hitchcock, 28 Vt. 452; Bulkley v. Andrews, 39 Conn. 70; Irons v. Iventner, 51 Iowa, 88, 50 N. ^X. 73. But, if the identical thing is not to be returned, it is a sale or an exchange, according to the nature of the consideration. South Australian Ins. Co. v. Randell, L. R. 3 P. C. 101; Powder Co. v. Burkhardt, 97 U. S. 110; Sturm v. Boker, l.jC U. S. 330, 14 Sup. Ct. 99; McCabe v. MeKinstry, 5 Dill. 509, Fed. Cas. No. 8,607; Ewing v. French, 1 Blackf. 354; Smith v. Clark, 21 Wend. 83; Norton v. Woodruff, 2 N. Y. 153; Crosby v. Delaware & H. Canal Co., 119 N. Y. 334, 23 N. E. 730; Chase v. Washburn, 1 Ohio St. 244; Butterfleld v. Lathrop, 71 Pa. St. 225; Bailey v. Bensley, 87 111. 556; Jones v. Kemp, 49 Mich. 9, 12 N. W. 890; Woodward v. Semans, 125 Ind. 330, 25 N. E. 444; Fishback v. Van Dusen, 33 Minn. Ill, 22 N. AV. 244; Barnes v. MeCiea, 75 Iowa, 207, 39 N. W. 392; 4 FOBMATTON OF THE CONTRACT. [Ch. 1 signment, to dispose of the thing according to his agreement with the consignor/ The transfer must be for a price in money; for if there be no valuaWe consideration the transfer is a gift,* and if the considera- tion consists of other goods the transfer is an exchange or a barter.* The legal effect of a contract of exchange is, however, generally the same as that of a contract of ■sale.^" Chickering v. Bastress, 130 III. 206, 22 N. B. 542; Eeherd's Adm'r v. Clem, 86 Va. 374, 10 S. B. 504. Of course, the transaction need not be either a sale or a bailment, but may create still' other rights, according to the contract of the parties. A dilBcuIt case, which need not here be discussed, arises where grain is deposited in an elevator or storehouse on an understanding, express or im- plied, that the warehouseman may mix it with the grain of other persons, and draw from the mass to meet the orders of receipt holders. See Benj. Sales (6th Bd.) Bennett's note, p. 6; Chase v. Washburn, 6 Am. Law Rev. 450; 2 Kent, Comm. 59o. ^ Ayres v. Sleeper, 7 Mote. (Mass.) 45; Brown v. Holbrook, 4 Gray (Mas«.) 102; Blood v. Palmer, 11 Me. 414; Morss v. Stone, 5 Barb. 516; Pam v. Vil- mar, 54 How. Prac. 235; Conable v. Lynch, 45 Iowa, 84. 8 Benj, Sales, § 2. " ITarriK(jn v. Luke, 14 Mees. & W. 139; Read v. Hutchinson, 3 Camp. 352; Williamson v. Berry, 8 How. 495, 544; Mitchell v. Gile, 12 N. H. 390; Fuller v. Duren, 36 Ala. 73; Dowling v. JIcKenney, 124 Mass. 480. 10 Com. v. Clark, 14 Gray, 367, per Bigelow, J., 372, See Emanuel v, Dane, 3 Camp. 209 (Warranty); La Neuville v. Nourse, Id. 351 (Caveat Bmptor); Chalm, Sale, p. 87; Benj. Sales (6th Am. Bd.) § 2, The principal difference Is in respect to the form of pleading and the measure of damages, since in the case of an exchange the declaration must be for damages for broach of the special agreement, and not in assumpsit for goods sold, or .goods sold and de- livered. Harris v. Fowle, cited in BJirbe v. Parker, 1 H, Bl. 2S7; Mitchell v. Gile, 12 N. H. 300; Tail v. Strong, 10 Vt. 457; Slayton v. McDonald, 73 Jle. 50. Otherwise where the contract of exchange is for goods at a stipulated price, Forsyth v. Jervis, 1 Sta'kie, 437; Hands v. Burton, 9 East, 349; Harri- son V, Luke, 14 Mees. & W. 139; Way v, Wakefield, 7 Vt. 228; Picard v. Mc- Cormick, 11 Mich. 69; or where the exchange is only partly for goods, and the action is to recover the money balance after delivery of the goods, Sheldon v. Cox, 3 Barn; & C. 420. An exchange has, however, been held to be a sale, within the meaning of a statute prohibiting the sale of liquor, Howard v. Har- ris, 8 Allen, 207; Com. v. Clark, 14 Gray, 307; but not within the meaning of a statute declaring illegal the sale of a slave by a trader without a license, Gunter v. Leckey, 30 Ala, 596, And proof of barter has been held not to sup- port an indictment charging sale of liquor. Stevenson v. State, 05 Ind. 400; Ch. 1] IN GENERAL. 5 Sale of Personal Property Effected by Contract, At common law the sale of personal property, unlike that of real property, is effected by the mere contract or agreement, verbal or written, of the parties. If the present transfer of the thing for a price be agreed upon, the property passes from seller to buyer, without delivery, by their mere mutual assent.^ ^ The transaction is in fact well described by the term 'Tsargain and sale." The bar- gain struck, the sale results by implication of law. Distinction between Executed and Executory Contracts of Sale. It is important to distinguish between executed contracts of sale, or actual sales, and executory contracts of sale, or agreements to sell. An executory contract of sale is a contract, pure and simple, whereas an executed contract of sale is in the nature of a convey- ance. "By an agreement to sell, a jus in personam is created; by a sale, a jus in rem is transferred. If an agreement to sell be broken 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 on execution for his debts, and if he becomes bankrupt they pass to his trustee. * * * 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 him, but also the usual proprietary remedies against the goods them- selves, such as the actions for conversion and detinue. In most cases, too, he can follow the goods into the hands of third parties. Again, if there be an agreement for sale, and the goods perish, the loss falls on the seller, while, if there has been a sale, the loss, as a rule, falls on the buyer, though the goods have not come into his possession." ^^ Massey v. State, 74 Ind. 368. Nor does an instrument giving authority to sell give autliority to ext'liange. Williamson v. Ben-y, 8 How. 495, 544; Edwards V. Cottrell, 43 Iowa, 194. 11 Post, p. 83 et seq. 12 Chalm. Sale, 3. 6 FORMATION OF THE CONTRACT. [Ch. 1 CAPACITY OF PARTIES. 6. Capacity to buy and sell is coextensive -with capacity to contract. EXCEPTION — "Where necessaries are sold to an infant, lunatic, or drunken man, he must pay a reasonable price therefor. The capnc-itv of persons to buy and sell is generally determined by their capacity to contract, upon which subject the reader is re- ferred to works upon contract. "Capacity to contract must be dis- tinguished from authority to contract. Capacity means power to bind oneself; authority means power to bind another. Capacity is usually a question of law; authority is usually a question of fact. As regards authoi'ity to buy and sell on brhalf of another, there appears to be nothing peculiar in the law of sales, except the pro- visions of the factors' acts." ^^ On this subject, therefore, the read- er is referred to works on the law of agency and partnership. There are, however, certain classes of persons, in part incapable of con- tracting, who, under special circumstances, may make valid pur- chases. The persons embraced in this exception are infants, luna- tics, and intoxicated persons. CAPACITY OF INFANTS. 7. Contracts of sale and purchase by an infant are void- able, at his option, either before or after *he has attained his majority. But — (a) The contract ceases to be voidable if it be ratified upon the attainment of his majority, (b) The contract cannot be avoided if it be for neces- saries, rf* The general rule of the common law is that an infant's contract is voidable, at his option, either before or after he has attained his 13 Chalro. Sale, 6. Ch. 1] CAPACITY OF INB'ANTS. 7 majority.^* Thus an infant may maintain an action on the con- tract against the sellei- during infancy/^ He may buy and sell, but either sale ^° or purchase " may be avoided by him, and if he avoids either he may recover back the consideration.^^ In case of avoidance he must, however, return the consideration which he re- ceived, if he still has it; though if he has consumed, lost, or sold it during minority, he may nevertheless avoid the purchase or sale.^° Such at least is the law generally recognized in America,^" though in England his right to avoid an executed sale and recover back the price is denied.^^ ii Giblis V. Jlei-rill. 3 Taunt. 307; Hunt v. Massey, 5 Barn. & Adol. 902; Holt V. Clarencieux, 2 Strange, 938; Zouch v. Parsons, 3 Burrows, 1794; King V. Inhabitants of Cliillesford, 4 Bain. & C, at page 100; Tuclier v. Moreland, 10 Pet. 64. See Pol. Cont. 52 et seq. Emancipation by his father does not en- large the infant's liability. Mason v. Wright, 13 Mete. (Mass.) 306. See Clark, Cont. 221, et seq. 15 Warwick v. Bruce, 2 Maule & S. 20o; Holt v. Clarencieux, 2 Strange, 937. 16 Shipman v. Horton, 17 Conn. 481; Stafford v. Roof, 9 Cow. 020; Carr v. Clough, 26 N. H. 280; Towle v. Dresser, 73 Me. 2.52. 1' Riley v. Mallory, 33 Conn. 201; Price v. Furman, 27 Yt. 268; Whitcomb V. Joslyn, 51 Vt. 79; Chandler v. Siromons, 97 Mass. .508; McCarthy v. Hcndei-- son, 138 Mass. 310; Robinson v. Weeks, 56 Me. 102; House v. Alexauder, 105 Ind. 109, 4 N. E. 891; Lemmon v. Beeman, 45 Ohio St. 5(i5, 15 N. E. 476. 18 Cases cited supra, notes 16, 17; Clark, Cont. 2.58. 19 Price V. Furman, 27 A't. 208; W^hitcomb v. Joslyn, 51 Vt. 79; Chandler v. Simmons, 97 Mass. 508; Walsh v. Young, 110 Mass. 396; Morse v. Ely, 154 Mass. 458, 28 N. E. 577; Green v. Green, 69 N. Y. 553; Miller v. Smith, 26 Minn. 248, 2 N. W. 942; Carpenter v. Carpenter, 45 Ind. 142; Shirk v. Shultz, 113 Ind. 571, 15 N. E. 12; Eureka Co. v. Edwards, 71 Ala. 248; Brantley v. Wolf, 60 Miss. 420; Lemmon v. Beeman, 45 Ohio St. 505, 15 N. E. 476. 2 The decisions on this point, hoAvever, are not uniform. >See Heath v. Stevens, 48 N. H. 251, where it is held that the infant's right to avoid the contract is conditional on his restoring what he received in specie, or, if not. on his accounting for the value of it. See, also. Hall v. Butterfleld, 59 X. H. 354; Bartlett v. Bailey, Id. 408; Riley v. Mallory, 33 Conn. 201. But it is be- lieved that the rule stated in the text is the prevailing one, and that it is cor- rect on principle. Tyler, Inf. (2d Ed.) § 36 et seq.; Ewell, Lead. Cas. 123. See Adams v. Beall, 07 Md. 53, 8 Atl. 064; Clark, Cont. 254. 21 "If an infant pays money under a contract, in consideration of which it is wholly or partly performed by the other party, he can acquire no right to re- cover the money back by rescinding when he comes of age." Pol. Cont. 6(); Leake, Cont. 553. The authorities principally relied on are Holmes v. Blogg, 8 Taunt. 508, which is generally repudiated by the American cases above cited, 8 FORMATION OF THE CONTBACT. [Ch. 1 The power of an infant to bind his father by his purchases relates to his authority to contract, and belongs to the law of agency. Ratification. The contract of an infant ceases to be voidable if it be ratified by him after attaining his majority.^^ By statute in some states the ratification is required to be in writing; ^^ but in most states no writing is necessary, and the ratification may be either by express language amounting to a new promise,^* as distinguished from a mere acknowledgment of the debt, or by conduct, as by using or selling the thing sold.'° Mere silence or failure to disaffirm does not constitute ratification.^* Contract for Necessaries. An infant may purchase necessaries, and be held liable for their reasonable value.^^ The necessaries of an infant are stated in Co. and Ex parte Taylor, 8 De Gex, JX. & G. 258. See, also, Williams v. Pasquali, Peake. Add. Cas. 197, per Kenyon, C. J.; Valentini v. Canali, 24 Q. B. Div. IGG. In Ex parte Taylor, Lord Justice Turner said: "If an infant buys an article ■whicti is not a necessary, he cannot be compelled to pay for it; but if lie does pay for it during his minority he cannot, on attaining his majority, recover the money back." Adams v. Beall, 67 Md. 5.^, 8 Atl. 664; Moley v. Brine, 120 Mass. :iL'4: Page v. Morse, 128 Mass. 99. But see Dube v. Beaudry, 150 Mass. 448, 23 N. E. 222. 22 AVilliams v. Moor, 11 Mccs. & W. 2.")0; Anson, Cont. lO."; Clark, Cont. 2.jS. 23 Previous to the infants' relief act of 1874 (37 & 38 A'ict. c. 62>, by which radical changes are made in the law governing contracts by infants, a writing was required in England. See Benj. Sales (6th Am. Ed.) § 27 et seq. 2* Ford V. Phillips, 1 Pick. 202; Thompson v. Lay, 4 Pick. 48; Proctor v. Sears, 4 Allen, 95; Wilcox v. Roath, 12 Conn. 550; Catlin v. Haddox, 49 Conn. 492. 2 5 Boy den v. Boyden, 9 Mete. (Mass.) 519; Lawson v. Lovejoy, 8 Greenl. (Me.) 405; Boody v. McKenney, 23 Me. 517; Deason v. Boyd, 1 Dana, 45; Robinson v. Hoskins, 14 Bush, 393; Cheshire v. Barrett, 4 McCord, 241; Minock v. Shortridge, 21 Mich. 304; Philpot v. Sandwich Manuf'g Co., 18 Neb. 54, 24 X. W. 428; Clark, Cont. 247. 20 Smith V. Kelley, 13 Mete. (Mass.) ;_!09; New Hampshire Mut. Fire Ins. Co. V. Noyes, .■!2 N. H. 'tl.l; Clark, Cont. 251. ^^ It has sometimes been laid down, in general terms, that, if an agreement be for the benefit of the infant, it is binding. See Pol. Cont. 66. In America the exception is confined to necessaries. But see Hall v. Butterfield, 50 X. H. 354; Bartlett v. Bailey, Id. 408. .Sec, as to contracts for necessaries, Clark, Cont. 231-239. Ch. 1] CAPACITY OF INFANTS. 9 Litt. 172, to be "Ms necessary meat, drinke, apparel, necessary phys- icke, and such other necessaries, and likewise for his good teaching or instruction, whereby he may profit himself afterwards." But the term includes also articles purchased for real use, although ornamental, as distinguished from such as are merely ornamental; ^^ and it has been said "that articles of mere luxury are always ex- cluded, though articles of luxurious utility are in some cases al- lowed." ^® The word "necessaries" must, therefore, be regarded as a relative term, to be construed with reference to the infant's age, state, and condition.^" An infant, being considered in law as 2 8 Peters v. Fleming, 6 Mees. & W. 42; Ryder v. Wombwell, L. R. 3 Exch. 90. 2 8 Chappie V. Cooper, 13 Mees. & W. 256, per Alderson, B. 30 Peters v. Fleming, 6 Mees. & W. 46; Wharton v. Mackenzie, 5 Q. B. 606; Davis V. Caldwell, 12 Cush. 513; Tyler, Inf. (2d Ed.) § 69 et seq. An enumera- tion of the various things which have been decided to be necessary or not nec- essary would be of comparatively little value, since the question, though to a great extent for the court, is one of judicial common sense in each particular case. The subjoined cases are cited for Illustration. The following articles have been held not to be necessaries: A silver goblet for a gift. Ryder v. Wombwell, L. R. 3 Exch. 90, L. R. 4 Exch. 32. A collegiate education, In the absence of special circumstances. Middlebury College v. Chandler, 16 Vt. 686. Traveling expenses for pleasure. McKanna v. Merry, 61 111. 177. A bicycle used in going home from the infant's place of work to dinner. Pyne v. Wood, 145 Mass. 558, 14 N. E. 775. It has been decided that the following things might be neces- saries: A livery for a servant. Hands v. Slaney, 8Term R. 578. A regimental uniform for a member of a volunteer corps. Coates v. Wilson, 5 Esp. 152. A horse, when required by the infant's position or health. Hart v. Prater, 1 Jur. 623; but not generally, Smithpeters v. Griffin, 10 B. Mon. l'.")0; Beeler v. Young, 1 Bibb. 519; Harrison v. Fane, 1 Man. & G. .550. A watch and jewelry, rela- tively to the infant's position. Peters v. Fleming, 6 Mees. & W. 46. See BeroUes v. Ramsay, Holt, N. P. 77. A wedding suit. Sams v. Stockton, 14 B. Mon. 232. A lawsuit. Thrall v. Wright, 38 Vt. 494. Attorney's fees for defense in a bastardy process, Barker v. Hibbard, 54 N. H. 539; or in prosecut- ing an action for seduction, Munson v. Washband, 31 Conn. 303; or in defend- ing criminal prosecution, Askey v. Williams, 74 Tex. 294, 11 S. W. 1101; or in litigation relative to the infant's property, Epperson v. Nujient, 57 Miss. 45 (Phelps V. Worcester, 11 N. H. 51, contra). It has been decided that the fol- lowing things were not necessaries: Dinners supplied to an undergraduate at his rooms, in the absence of special circumstances. Brooker v. Scott, 11 Mees. & W. 67; Wharton v. Mackenzie, 5 Q. B. 606. Cigars and tobacco, prima facie. Bryant v. Richardson, L. R. 3 Exch. 93, note 3, 14 Law T. (N. S.) 24. 10 FORMATION OF THE CONTRACT. [Ch. 1 devoid of sufficient discretion to carry on a trade or business, is not liable for goods supjilied to him for his trade or business, whether he is trading alone or in partnership."^ But, if married, his duties as husband and father are the same as if he were of full age, and things necessary for his wife and children are deemed necessaries for himself.'- It is obvious that an article such as a diamond or a race horse may be intrinsically incapable of being a necessary, and that an- other article, though not intrinsically incapable of being a neces- sary, may fail of being such by reason of the circumstances of the case; for example, the age or condition of the buyer, the quantity in which it is supplied, "'= or the fact that the wants of the infant are suitably supplied by his parent or guardian, or from any other source."* The principal difQculty in respect to necessaries consists in determining the jirovince of the court and jury in ascertaining them. It is frequently stated in the American cases that the ques- tion whether articles come within the elass of necessaries is for the 31 Wliywall V. Champion, 2 Strange, lOs:-;; DUk v. Koislilcy. 2 Esp. 480; Jlcr- riam v. Cunningliam, 11 Cush. 40; Mason v. Wright, 13 Mete. (Mass.) 306; Rainwater V. Durham, 2 Nott & Mc<\ .524: rieccll v. Lewenthal, .57 Miss. 331. But in Mohney v. Evans, 51 Pa. Rt. SO, tlie question wliether farming supplies were neicssaries was left to the .lury, and, if he uses for necessary household purposes goods supplied to him as a tradesman, he becomes liable on what is so used. Turberville v. 'Whitehouse, 1 Car. & P. 04. 32 Turner v. Trisby, 1 Strange, ics; Rainsford v. Fenwick, Cart. 21.5: Tup- per V. Cadwell, 12 Mete. (Mass.i 5.5!>, 5(;2; Davis v. Caldwell, 12 Cush. 512; Cantine v. Phillips. 5 liar. (I't'l.) 42S; Price v. Sanders, i;() Ind. 311. 33 .Tolmsdu v. Lines, Watts & S. 80; Nicholson v. Wilborn, 13 Ga. 4r,7. 34 Conk \. Deaton, 3 Car. & P. 114; Bainlnidm^ v. Pickering, 2 W. Bl. 1.32-5; Brooker v. Scntt, 11 Mees. & W. 07: Swift v. Bennett, 10 Cush. 430. 43'i : Iloyt \. Casey, 114 Mass. :_;'.i7; Trainer v. Trumbull, 141 Mass. 527. IG X. E. 701; "\^'ailiug v. Toll, '.) .lohns. 141; Cuthrie v. JIurphy, 4 Watts, 80; Con- nolly V. Hull, .3 McCiiril, 0; Kline v. L'Amoureu.x, 2 Paige, 419; Atchison v. Bruif. .50 Barb. :!sl ; Perrin v. Wilson. 10 Mo. 451; ilcKanna v. Merry, 61 111. 117. If tlie infant was already snttieiently supplied, it is immaterial that the seller was ignorant of the fact. Braysliaw v. Eaton, 7 Scott, 183; Barnes V, Toye, 13 (}. B. Div, 414; .Johnstone v. Marks, 'l9 Q. B. Div. 509; Johnson V. Lines, G Watts & S. .80. But having an inccme out of which the infant might keep himself supplieil is not c(iuivalent to beins actually supplied. Burgliart v. Hall, 4 Mees. & W. 727; Nicholson v. Wilboru, 13 Ga. 409; Rivers v. Gregg, .5 Rich. Eq. 274. Ct- 1] CAPACITY OF INFANTS. 11 court, and that the question whether they were necessaries in fact is for the jury.^^ In Enghmd it has been settled that the question whether the articles were necessaries is one of fact, and therefore for the jury; but that, like other questions of fact, it should not be left to the jury unless there is evidence on which they can reasonably find in the affirmative.^"' Practically, there is little diilerence in the two rules, for the cases involving articles intrinsically 'ucapable of being necessaries are rare, and the question in most cases de- pends on the particular circumstances. It is impossible, therefore, in most cases, for the judge to say whether articles are within the class of necessaries, without taking into consideration the circum- stances of the case; and if he determines that the articles do not, under the circumstances, come within the class, he in effect deter- mines that there is not evidence on which the jury could reasonably find them to be necessaries. The burden of proving that the articles were necessaries is on the plaintiff.'^ The amount for which the infant can be held liable is not the contract price, but the reasonable value of the goods.^' Even if he gives his note in payment, the seller can recover thereon no more than what the goods were worth.^" SBTupper v. Cadwell, 12 Mete. (Mass.) 559, 563; Merriam v. Cunningham, 11 Cush. 40, 44; Bent v. Manning, 10 Vt. 22."): Stanton v. Willson, 3 Day, 37, .56; Glover v. Ott, 1 McCoi-d, 572; Beeler v. Young, 1 Bibb. 519; Grace v. Hale, 2 Humph. 27; McKanna v. Merry, 61 111. 117. 3 6 Ryder V. Wombwell, L. R. 3 Bxch. 93, L. R. 4 Exch. 32. See, also, Peters V. Fleming, 6 Mees. & W. 42; Wharton v. Mackenzie, 5 Q. B. 606; Davis v. Caldwell, 12 Cush. 512, per Shaw, Ck J.; Johnson v. Lines, 6 Watts & S. 80; Mohney v. Evans, 51 Pa. St. SO. 37 Thrall v. Wright, 3S Vt. 404; Wood v. Los;'y, 50 Mich. 475, 15 N. W. .557; Nicholson v. Wilborn, 13 Ga. 4G7, 475. 3 8 Stone V. Dennison, 13 Pick. 1; Vent v. Osgood, 19 Pick. 572, 575; Locke V. Smith, 41 N. H. 346; Beeler v. Young, 1 Bibb. 510; Bouchell v. Clary, 3 Brev. 194. 3 Earle v. Reed, 10 Mete. (Mass.) 387; Bradley v. Pratt, 23 Vt. 378; Guthrie V. Morris, 22 Ark. 411. Some cases hold the note void. Swasey v. Vander- heyden's Adm'r, 10 .Johns. 33; MeMinn v. Richmonds, 6 Yerg. 0; Ayers v. Burns, 87 Ind. 245. See Byles, Bills (7th Am. Ed.) 61. 12 FORMATION OF THE CONTRACT. [Ch. I CAPACITY OF LUNATICS AND DRUNKEN MEN. 8. Contracts of sale and purchase by a lunatic or drunken man, or other person non compos mentis, are voidable at his option, if at the time of making the contract he was incapable of understanding its effect. EXCEPTIONS— (a) The sale or purchase is not void- able if the other party did not know, or have reasonable cause to knoAv, the condition of the lunatic or drunken man, and if the contract has been so far executed that the other party cannot be restored to his former position. (b) The contract, if fair, cannot be avoided if it be for necessaries purchased by the lunatic or drunken man. Lwiatics. The general rule of the common law is that the contract of a luna- tic or other person non compos mentis, like that of an infant, is not void, but is voidable at his option.*" Thus, it may be ratified or disaffirmed by the lunatic on recovery of his sanity,*^ or by his guardian or other representative," but not by the other party.*^' The principal difference between the contract of a lunatic and that of an infant is that if the other party did not know, or have reasonable cause ** to know, of the lunatic's condition of mind, and acted in good faith, and the contract has been so far executed that the parties cannot be placed in statu quo, it cannot be avoided. *o Molton V. Camroux, 2 Exch. 487, 4 Kxch. 17; Matthews v. Baxter, L. R. 8 Exch. l;!2; Seavcr v. Phelps, 11 Pick. :1U4; Carrier v. Sears, 4 Allen, oOG; Chew V. Bank of Baltimore, 14 Md. 20'J; Ingraham v. Baldwin, 9 N. Y. 40; Pol. Cont. 91; Bish. Cont. CIS; Clark, Cont. 2ij3; 2 Kent, Gomm. 451. " Allis v. Billings, 6 JXetc. (Mass.) 41.''i; Arnold v. Richmond Iron "Works, 1 Gray, 434; Gibson v. Sopcr, (3 Gray, 27'J; Turner v. Rusk, 53 Md. 05. 42 McClain v. Davis, 77 Ind. 419; Hallcy v. Troester, 72 Mo. 73; Moore v. Hershey, 'M Pa. St. 19C; Flint v. A'alpey, 130 Mass. 385. ■13 Allen V. Berryhill, 27 Iowa, .534. a Beavan v. McDonnell, 10 Exch. 184; Lincoln v. Buckmaster, 32 Yt. 052; Matthiessen & W. R. Co. v. McMahon's Adm'r, 38 N. J. Law, 530, 544. Ch. 1] CAPACITY OP LUNATICS AND DRUNKKN MEN. 13 The leading case on tMs point is Molton v. Camroux/" the principle of which has generally, though not universally, been followed in this country.''^ This has been called a decision of necessity, as a contrary doctrine would render all ordinary dealings between man and man unsafe.*'' If, howerer, the lunatic restores, or offers to restore, the consideration which he has received, the necessity ceases, and he may avoid the contract.** The contractual capacity of a lunatic or insane person under guardianship depends upon stat- ute, and differs in different states.*® Drunken Men. The rules in regard to the contracts of a man who is so intoxi- cated as not to know what he is doing are the same.^° His con- tracts are voidable, but not void, and hence may be ratified by him when sober.^^ 4 5 2 Bxcb. 487, 4 Exch. 17, Ewell, Lead. Gas. 614. See, also, Beavan v. Mc- Donnell, 9 Exch. 309, 10 Exch. 184; Elliot v. Ince, 7 De Gex, M. & G. 475, 487; Drew v. Nunn, 4 Q. B. Div. 661; Imperial Loan Co. v. Stone [1892] 1 Q. B. 599; Niell v. Morley, 9 Ves. 478, Ewell, Lead. Cas. 628. 4 6 Young V. Stevens, 48 N. H. 133; Beals v. See, 10 Pa. St. 56; Lancaster Co. Nat. Bank v. Moore, 78 Pa. St. 407; Mutual Life Ins. Co. v. Hunt, 14 Hun. 169, 79 N. Y. 541; BaUard v. McKenna, 4 Rich. Eq. 358; Matthiessen & W. R. Co. V. JIcMahon's Adm'r, 38 N. J. Law, 536; Wilder v. Weakley, 34 Ind. 181; Fay V. Burditt, 81 Ind. 433; Northwestern Mut. Fire Ins. Co. v. Blankenship, 94 Ind. 535; Abbott v. Creal, 56 Iowa, 175, 9 N. AV. 115; Alexander v. Has- kins, 68 Iowa, 73, 25 N. W. 935; Rusk v. Fenton, 14 Bush, 490; Riggan v. Green, 80 N. C. 236; Burnham v. Kidwell, 113 111. 425; Gribben v. Maxwell, 34 Kan. 8, 7 Pac. 584; Leavitt v. Files, 38 Kan. 26, 15 Pac. 891. The leading case against this doctrine is Seaver v. Phelps, 11 Pick. 304, Ewell, Lead. Cas. 610. See, also, Gibson v. Soper, 6 Gray, 279; Brigham v. Fayerweather, 144 Mass. 52, 10 N. E. 735; Hovey v. Hobson, 53 Me. 451; Edwards v. Davenport, 20 Fed. 756. In Crawford v. Scovell, 94 Pa. St. 48, Trunkey, J., says: "In this country that rule is not universally extended to sales of personalty, and is not applied to conveyances of real estate." In several of the cases above cited, however, it is applied to conveyances. *7 Elliot V. Ince, 7 De Gex, M. & G. 475, per Lord Cranworth. 48 Boyer v. Berryman, 123 Ind. 451, 24 N. E. 240; Myers v. Knabe, 51 Kan. 720, 33 Pac. 602; Warfleld v. Warfield, 70 Iowa, 633, 41 N. W. 383; Eaton v. Eaton, 37 N. J. Law, 108. 4 8 Bish. Cont. § 977; Clark, Cont. 268. 60 Pol. Cont. 87; Bish. Cont. § 979; Clark, Cont. 274, Bi Matthews v. Baxter, L. R. 8 Exch. 132. Pointing out that "void," as used In Gore v. Gibson, 13 Mees. & W. 623, Ewell, Lead. Cas. 734, must be taken to 14 FORMATION OF THE CONTRACT. [Ch. 1 Necessaries. ►So far as relates to the contiacts of a lunatic for necessaries, where no advantage is taken of his (•(mdiliou by the seller, the pur- chases will be held ralid." As in the case of an infant, "neces- saries'' embrace articles suitable to his condition and degree, ^^ but in the case of a lunatic the term would probably be more liberally ciinstriu'd." It seems that a drunken man also is liable for neces- saries.'^" CAPACITY OF MARRIED WOMEN. 9. At common la^v contracts of sale and purchase by married -women are in general void; but the capacity of married ■women to contract has generally been extended by statute. Although the common-law capacity, or rather incapacity, of a married woman to buy and sell is coextensi\e ^\ith her general ca- pacity or incapacity to contract, and the subject therefore falls ratlier within the law of contract and of married women than of sale, a few words on the subject may not be nut of place. At com- mon law a married Ionian is incompetent to contract.^" A con- tract with her is not, as in the case of an infant or lunatic, merely mean "voidnlile." Mnllun v. Camroiix, 4 Exch. IT; Carpenter v. Itodgers, CI Jlicli. 3S4, L'S N. W. ]•",(;: Broadwater v. Darue, 10 'Sin. 2TT; Uish. Cont. § 085; (.:iark, Clint. 274. !^- Baxter V. Earl of Portsraoutli. Ti Barn. & C. ITo; Basstor v. Same, 7 Dow. & It. i.;l4; Manby v. St.itt. 1 Sid. 112; Dane v, Kirkwall, S Car. eV P. G7'J; Weutworli v. Tubb, 1 Yonuge & C. Ch. 171; Williams v. Wentworth, .5 Beav. :v2Zr, Nelson v. Duncnmbe, !) Beav. 211; Richardson v. Strong, l:; Ired. lOG; La lUie V. Gilkj'son, 4 Pa. St. o7.j; Sawyer v, I^ufkin, ,">(i Me. 3()S: Hallett v. Oake;-;, 1 Gush. 200; Kendall v. Ma.y, 10 .-Vllcn, .".'.i; Skidmore v. Romaine, 2 Bradf. (Sur.) 122; Barnes v. Hathaway, Oi; Barb. 4.j:i!; Blaisdell v. Holmes, 4S Vt. 4i.i2; JleCorniick v. Littler, S.j 111. 02. 53 Baxtci- Y. Earl ot Portsmouth, r. Barn. & C. 170; Bagster v. Same, 7 Dow. & R.,G14; La Rue v. Gilkyson, 4 Pa. St. 375; Richardson v. Strong, 13 Ired. loii. s4 Kendall v. May, in Allen, 50. See In re Persse, 3 Malloy, 94. ss Core V. Gibson, 13 Mees. & W. 023, per Pollock, C. B., and Alderson, B. iso Co. Litt. 112a. Ch. 1] CAPACITY OF MARRIED WOMEN. 15 voidable, but is void," and hence is incapable of ratification upon termination of coverture.-'* She cannot, even while living apart from her husband and enjoying a separate maintenance secured by deed, malce a valid purchase, on her own account, even of neces- saries.^'' To tlie general rule of her incapacity to contract, how- ever, there are several exceptions: (1) When the husband is civil- iter mortuus (that is, dead in law, as when he is under sentence of penal servitude, transportation, or banishment), her disability is sus- pended, °° and, according to some authorities, it is suspended when he is an alien and resident abroad."^ (2) By the custom of the city of London, a married woman might trade, and for that purpose might make valid contracts."^ (3) In equity, when a married wo- man has separate property, she may, under certain circumstances, contract so as to render it liable."^ It is to be noticed that the ex- ceptions to the incapacity of married women to contract are not confined, as is the exception in the case of infants and lunatics, sim- ply to purchases of necessaries, but that it extends to their general contractual capacity. The power of a married woman, when living with her husband, to bind him by contract for necessaries for herself and her house- hold, relates rather to her implied authority than to her capacity to contract. '** The common law in regard to the contractual capacity of married women has been radically changed by legislation in England '^^ and 5T Anson, Cont. (4th Ed.) 117; Bisli. Cont. § 949; Clark, Cont. 27G; Schouler, Husb. & Wife, §§ 97, 9S. 5 8 Zouch V. Parsons, 3 Burrows, 1794; Schouler, Husb. & Wife, § 99. There are, however, some authorities which hold that the moral consideration is sufficient to support a promise after termination of coverture. Lee v. Jlug- geridge, 5 Taunt. 36. Ewell, Lead. Cas. 322, 331; Stew. Husb. & Wife, § 3CG. 69 ilarshall v. Rutton, 8 Term R. .545. soBenj. Sales, § 32; Stew. Husb. & Wife, § 358. 61 Benj. Sales, §§ 33, 34; Stew. Husb. & Wife, § 358; Gregory v. Paul, 15 Mass. 31; McArthur v. Bloom, 2 Duer, 151. So where the husband was a citi- zen and resident in another state. Abbot v. Bayley, 6 Pick. 89. 6 2 Beard v. Webb, 2 Bos. & P. 93. 6 3 Anson, Cont. (4th Ed.) 118; Clark, Cont. 279; Schouler, Husb. & Wile, § 189 et seq. 6 4 Schouler, Husb. & Wife, § 100 et seq. CO Benj. Sales, § :'.7 et seq. 16 FORMATION OF THE CONTRACT. [Ch. 1 in most of the states of this country," and in many states her disability to contract has been wholly removed. These statutory provisions differ greatly among themselves, and a consideration of the statutory capacity of married women to buy and sell cannot be here attempted. WHO MAT SELL. 10. As a rule, no person can sell personal property unless he be the o'wmer. EXCEPTIONS— (a) In England, but not in the ITnitea States, -where goods are sold in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in good faith, and -without notice of defect of title.^' (b) Where promissory notes, bills of exchange, or other negotiable securities are transferred by the holder before maturity to a bona fide pur- chaser, for value, the purchaser may acquire a good title. (c) A person, not being the ow^ner of goods, may sell them, so as to pass a good title thereto, if he acts under authority or po-wer given by the o-wner, or conferred by la-w, and duly exercises such authority or pow^er. (d) By statute in England and in many states, pur- chasers from factors and other persons in- trusted -with and in the possession of goods or the documents of title may, under certain cir- cumstances, acquire good title, though the factor or other person -was not authorized to sell. «o Stim. Am. St. Law, § (J48l2. «7 The Case of Market-OvcTt, 5 Onlce, S3b; Tud. :\Ierc. Cas. (3cl Ed.) p. 274; Crane v. London Dock Co., 5 Best & S. 313, 33 Law J. Q. B. 224, 220; Benj. Sales, § 8 et soq. Ch. 1] WHO MAY SELL. 17 (e) "When the seller of goods has a voidable title, but his title has not been avoided at the time of sale, the buyer, in general, acquires a good title, provided he buys them, in good faith and ■without notice of the seller's defect of title. (f ) A sale made by a person not thereto authorized, may be good, as against the owner, by w^ay of estoppel. Not only must the parties to a sale be capable of contracting, but one of them, the seller, must (subject to the exceptions men- tioned) be the owner of the thing sold, for, as a rule, no one can pass to the buyer a better title than he himself possesses. "Nemo dat quod non habet." "* A person, therefore, however innocent, who buys goods from one not the owner, obtains, in general, no property in them -whatever; and even if, in ignorance that the goods were lost or stolen, he resells them in good faith to a third person, he remains liable in trover to the original owner.'' ° It is to be observed that, in the cases covered by the first and second ex- ceptions, the buyer, like one who in good faith receives money in payment,'" obtains a good title as against all the world, — that is, even against one who has lost the thing sold, or from whom it has been stolen, — while in the cases covered by the other exceptions the buyer simply obtains the title (if any) of a particular person, who 68 Peer v. Humphrey, 2 Adol. & E. 495; AVhistler v. Forster, 32 Law J. C. P. 161; Cooper v. Willomatt, 1 C. B. 672, 14 Law J. C. P. 219; Cundy v. Lind- say, 3 App. Cas. 459; Stanley v. Gaylord, 1 Cush. 536; Chapman v. Cole, 12 Gray, 141; Parsons v. Webb, 8 Greenl. (Me.) 38; Galvin v. Bacon, 11 Me. 28; Prime v. Cobb, 63 Jle. 200; Riford v. Montgomery, 7 Vt. 418; Bryant v. Whitcher, 52 N. H. 158; Barrett v. Warren, 3 Hill, 348; Williams v. Merle, 11 Wend. 80; Saltus v. Everett, 20 Wend. 267. The cases cited under the ex- ceptions may also generary be dted under the rule. Benj. Sales, § 6; Chalm. Sale, § 24. 6!) Stone v. Marsh, 6 Barn. & C. 551; Marsh v. Keating, 1 Bing. N. C. 198, 2 Clark & F. 250; White v. Spettigue, 13 Mees. & W. 603; Lee v. Bayes, 18 C. B. 599; Hoffman v. Carow, 20 A¥end. 21; Courtis v. Cane, 32 Vt. 2?,2; Gilmore v. Newton, 9 Allen, 171; Riley v. Boston Water- Power Co., 11 Cush. 11. 70 Miller v. Race, 1 Burrows, 452; Saltus v. Everett, 20 Wend. 207; Chap- man v. Cole, 12 Gray, 141. SALES — 2 18 FOKMATION OF THE CONTRACT. [Ch. 1 may or may not be the true owner, without prejudice to the rights of any person who may in fact have a superior title. Market Overt. The rules of market overt apply only to a limited class of retail transactions." All shops in the city of London are market overt, for the purpose of their own trade; " but a sale by sample is not within the custom, because the whole transaction, and not merely the formation of the contract, must take place within the open mar- kef'' Outside the city of London, markets overt may exist by grant or prescription.''* The exception in favor of sales in market overt has never existed in the United States.''' Negotiable Instrvments. For the rules relating to the transfer of negotiable securities, the reader is referred to the works upon bills and notes. Sale under Power. The owner may, of course, make a sale by an agent thereto au- thorized; and he may, as in the case of a mortgage, expressly con- fer on another the power of making a sale upon a certain contin- gency. But, besides these cases of express authorization, there are many cases where the authority is implied by law from the rela- tion of the parties. Th'is a pawnee of goods has authority, implied by lav,', in c-ish of default, to sell the goods pledged; ''" and the master of a ship has implied authority, in case of necessity, to sell the goods of the shippers of the cargo.'' So a landlord distraining for rent may sell the goods of his tenant. '* And a sheriff, as an officer on whom the law confers a power, may sell the goods of the '1 Benj. Sales, § 8; Clialm. Sale, § 25. 72 t35. T3 Ciaue V. London Dock Co., 5 Best & S. 313, 33 Law J. Q. B. 224. Ti Clialm. Sale. 40. 7B Dame v. Balilwin, 8 Mass. 518; Towne v. Collins, 14 Mass. 500; Wheel- wright V. Depeyster, 1 .Johns. 471; Hoffman v. Carow, 22 Wend. 285; Hosack v. Weaver, 1 Yeates, 478; Easton v. Worthington, 5 Serg. & R. 1.30; Browning y. jNlagill, 2 Har. & J. 308; Rolan v. Gundy, 5 Ohio, 202; Yentress v. Smith, 10 Pet. IGl, 2 Kent, Comm. 324. '62 Kent, Comm. 582; Schouler, Bailm. § 227 et seq. 7T 3 Kent, Comm. 173. 7 8 Woodf. Landl. & Ten. (13th Ed.) 479-181; Tayl. Landl. & Ten. (8th Ed.) § 57 et seq. Ch. 1] WHO MAY SELL. 19 defendant in execution ; nor will the title to them be affected if the execution was voidable,'*' though, if the defendant had no title, the sheriff can, of course, give none.*" It would be useless to multiply illustrations of the cases in which property may be sold, without the consent of the owner, under process of law. Factors'' Acts. As the earlier English factors' acts have been, to a great extent, the models of the various enactments on the same subject in the United States, it will be sufflcient for the present purpose to refer briefly to the history and effect of the English acts. The factors' act (G Geo. IV. c. 94, § 2) enacted that "persons in- trusted with and in the possession of any bill of lading, Indian warrant, dock warrant, warehouse-keeper's certificate, warrant, or order for the delivery of goods, shall be deemed and taken to be the true owner of the goods so far as to give validity to sales" by them to buyers without notice that such vendors were not owners; and by .5 & 6 Met. c. 39, this section was amended so as to give the same effect to the possession of the goods themselves as- to the bill of lading, "or other docuraents of title." The fourth section of the earlier act provided that purchasers from "any agent or agents in- trusted with any goods, wares, or merchandise," or to whom the same might be consigned, should be protected in their purchases notwithstanding notice that the vendors were agents, provided that the purchase and payment were made in the usual course of busi- ness and the buyer had not notice of the absence of authority of the agent. These acts applied solely to persons intrusted as factors or commission merchants, and not to persons to whose employment a power of sale is not ordinarily incident; for example, a wharfin- f 9 Turner v. Felgate, 1 Lev. 95; Manning's Case, S Coke, 94b; Emmett v. Thorn, 1 Maule & S. 42.j; Bank of U. S. v. Bank of VS'asliington, <; Pet. 9; Park V. Darling, 4 Cush. 197; Jackson v. Cadwell, 1 Cow. 623; Woodcock v. Benuet, Id. 711; Stinson v. Ross, 51 Me. 5.jU. Otlierwise wliere the judgment or ex- ecution is void. Lock v. Sell wood, 1 g. B. 730; Camp v. Wood, 10 Watts, 118; Caldwell v. Walters, 18 Pa, St. 79; Kennedy v. Duncklee, 1 Gray, 05. 80 Farrant v. Thompson, 5 Barn. & Aid. 820; Shearick v. Huber, 6 Bin. 2; Griffith V. Fowler, 18 Vt. 390; Buffum v. Deane, 8 Cush. 41; Champney v. Smith, 15 Gray, 512; Williams v. Miller, 10 Conn. 140; Symonds v. Hall, 37 Me. 354; Coombs v. Gorden, 59 Me. Ill; Bryant v. Whitcher, 52 N. 11. 158. 20 FOEMATION OF THE CONTRACT. [Ch. 1 ggj. 81 Thej' were limited in their scope to mercantile transactions, and did not embrace sales of furniture or goods in possession of a tenant or bailee for hire.*^ It might be supposed that the effect of these enactments was that if the owner of goods intrusted their possession or their indicia of title to a person who, from the nature of his employment, might be taken prima facie to have the right to sell, a sale by such person to a purchaser without notice would bind the true owner.^" But in Fuentes v. Montis,*^ where the plaintiff consigned wine for sale to a factor, who, after revocation of his authority, pledged it as se- curity for advances made by defendant, it was held that though the revocation was unknown to the defendant, and the wine was still in the factor's possession, the latter was no longer "intrusted with and in possession" of the goods, the courts also held that, to consti- tute a person "an agent intrusted with the possession of goods," he must have been intrusted in the character of such agent; that is, for the purpose of sale.*'* They also held that the acts did not cover the case of a seller left in possession of the goods or docu- ments of title,^" or of a buyer thus left in possession so as to defeat the rights of an unpaid seller.*^ The effect of the decisions w;is partly annulled by 40 & 41 Vict. c. 39, which provided that a secret revocation of agency should not be operative, and which extended the scope of the acts to buyers and sellers left in possession of the documents of title. Finally, the recent factors' act (1889) still further extends the effect of the former acts. It would be beyond the scope of an elementary book upon sales 81 Monk V. Whittenbmy, 2 Barn. & Adol. 4S4; Wood v. Rowcliffe, 6 Hare, 183; Lamb v. Attenborough, 1 Best & S. 831; Jaulerry v. Britten, 5 Scott, 655, 4 Bing. N. C. 242; Hellings v. Russell, 33 Law T. (N. S.) 380. 82 Loeschman v. Machin, 2 Starkie, 311; Coorcr v. Willomatt, 1 C. B. 672. 8 3 Benj. Sales, §§ 19, 20. f.* L. R. 3 C. P. 2GS, 37 Law J. C. P. 137, L. R. 4 C. P. 93. See, also, Shep- pard V. "Union Bank of London, 7 Hurl. & N. CGI, 31 Law J. Exch. 154. 8 Cole V. North Western Bank, L. R. 9 C. P. 470, attirmed L. R. 10 G. P. 354; Johnson v. Credit Lyonnais Co., 2 C. P. Div. 22t, affirmed 3 C. P. Div. 32; Hel- linss V. Russell, 33 Law T. (X. S.) 380. 86 Johnson v. Credit Lyonnais Co., 3 C. P. Div. 32. 8Tjcnkyns v. Usborne, 7 Man. &. G. C78, 8 Scutt, N. R. 505; McEwan v. Smith, 2 II. L. Cas. 309. Ch. 1] WHO MAY SELL. '-H to consider the varying provisions of the different factors' acts passed in the United States.^^ Enough has been said, however, to illustrate the struggle which has existed between the common law rule, "nemo dat quod non habet," and the contention of the mer- cantile community, now partially embodied in legislation, that, if § person is put in possession of goods or documents of title, he ought, as regards innocent third persons, to be regarded as the owner of the goods.*" Sale xmder Voidable Title. "Where goods have been obtained by means amounting to larceny, the thief has, of course, no title; but where goods have been ob- tained by fraud the person who so obtains them may have no title ss Factors' acts have been passed in the folio-wing states: Kentucky, Laws 1S80, May 5; Maine, Rev. St. c. 31; Maryland, Rev. Code, art. 31; Massa- chusetts, Pub. St. c. 71; Missouri, Rev. St. § 6281; New York, Acts 1830, c. 170; Ohio, Rev. St. §§ 321.J-3219; Pennsylvania, Brightly, Purd. Dig. p. 773; Rhode Island, Pub. St. c. 13G; Wisconsin, Rev. St. §§ 3345, 3346. A warehouseman, who is also a broker, with authority only to receive offers for merchandise stored with him as warehouseman, and report them to his principal, is not a "factor or other agent intrusted with the possession of merchandise for the purpose of sale," or "a person intrusted with merchandise, and having author- ity to sell or consign the same," or a "consignee or factor having possession of merchandise with authority to sell the same," within the provisions of the Slassachusetts factors' act. Thacher v. Moors, 134 Mass. 156. See, also, Nlck- erson v. Darrow, 5 Allen, 419; Stollenwerck v. Thacher, 115 ilass. 224; Good- win V. Massachusetts Loan & Ti-ust Co., 152 Mass. 189, 25 N. B. 100. The New York factors' act, which declares that one intrusted with the possession of the goods of another, for the purpose of sale, shall be deemed the true owner, so tar as to give validity to a disposition thereof for money advanced, does not protect a party who has made advances on goods to a factor, with knowledge that he was not the true owner. Stevens v. Wilson, 3 Denio, 472. As to what amounts to "intrusting": Collins v. Ralli, 20 Hun, 246, 85 N. Y. 637; Soltau V. Gerdau, 119 N. Y. 380, 23 N. E. 864; Kinsey v. Leggett, 71 N. Y. 387, 395; Mechanics' & Traders' Bank v. Farmers' & Mechanics' Nat Bank, 60 N. Y. 40. A factor has no power to pledge, unless the power is conferred by stat- ute. Cole V. North Western Bank, L. R. 10 C. P. 354; Johnson v. Credit Lyon- uais Co., 3 C. P. Div. 32; Warner v. Martin, 11 How. 209; Allen v. St. Louis Bank, 120 U. S. 20, 7 Sup. Ct. 460; Commercial Bank v. Hurt, 99 Ala. 130, 12 South. 568, 572; Michigan State Bank v. Gardner, 15 Gray, 362; Gray v. Agnew, 95 111. 315; Wright v. Solomon, 19 Cal. 64. See Williston, Cas. Sales, p. 603, note. 89 See Chalm. Sale, 97 et seq. FORMATION OK THE CONTHACT. [Ch. 1 at all, or may liavo a voidable title, aecordinn Id the nature of the tmiisailion. If the uaUiic of the fraud be such that there was never a eontraet belween the itartics, as if A. obtains noods fi-oni r.. by fa1s<>ly i)re(eE(linii- lo be ( '., Iheii A. has no title a( all, and can i;ive none."" Itnt if tlie person defrauded really intended to part -with Ihe properly in, and possession ol', the ij,(iods, though in- duced lo do so by fraud, there is a contract whicli lie may allirm or disaflirm at his eleciicm." "^ Hence the person who obiams the goods has a \()idablc title, and can gi\<- a good tille to an innocent jiur- cliaser lielore the oOier parly has disalhrmed."- And the saiue rule jn-evails w lu're the sale is voidable in favor of credilors.'''' J'Julujijicl. M'liei-e the owner of goods, by his \\oi'ds or c(mduct, willfully lauscs anotlier to believe that tiie goods beloug to a third person, and Ik buy them from such ]iei-son in that belief, he is estopped to assert his title against such buyer."'' THE THING SOLD. 11. The thing which forms the subject-matter of a sale must be in existence and ow^ned by the seller. 12. A contract to sell goods not yet in existence or ac- quired by the seller can only operate as an agreement to sell. EXCEPTIONS— (a) A contract to sell goods which have a "potential existence" — that is, w^hich 0" Ilififions V. Burton, I'U Law .T. Excli. .".12; Ilardman v. Booth, .'J'J Law .T. lOxcli. lor,; (!\iii(ly v. IJiiilsay, .". App. Tas. -].">;). »i i.'lialiu. Sale, 41; CIchkIi \. Lomlou iV N. W. lly. Co., L. K. 7 lOxcIi. 2i;. ■■'■■' Wliitc V. (larilcii, 10 (". B. ;illt. 20 Law .T. ('. P. !(;(!; KiiiKsfonl v. Mniy, 2.") Iawv .1. Kxcli. Kid; Tease v. (iloaliec, L. K. 1 I'. 0. 21!), 220; Huffman v. Ndlile, {j iMele. (Mass.) (iS; Zoeller v. Itiley, 100 N. A'. 102, 2 N. 10. .iSS; Clialni. Sale, § 2ii; post, |). 122. osci'ceii V. Tanner, S .Mete. (M.ass.) 411; Sleeper v. ('liapman, 121 Jlass. 404; Neal V. Williams, is Me. :;;)!; Cdiiiey y. lM(kerin>;, (;:', X. 11. 121!; Clnrdoii v. Uitenoin-, S7 Mn. .".I; post. p. 12,S. I'lPiclvard v. Sears, Ad.il. i^: 10. 4(;il; Cre;;;.' v. Wells, 10 Adnl. ^(t 10. 00; Waller V. Drakoforil, 22 Law .1. 'i. ]'. 274; Frceiiiau v. Cooke, 2 lOxeh. iiZii; Kniglits V. WilTen, L. U. 5 Q. 11. OCO; post, p. 212. Ch. 1] THE THING SOLD. 23 are the expected product or increase of some- thing o-wrned by the seller — may operate to pass the property in the goods upon their com- ing into existence, (b) A contract to sell goods not yet acquired by the seller may operate to pass the equitable inter- est of the seller in the goods upon their ac- quisition by him. 13. Goods not yet in existence or acquired by the seller, or the acquisition of which by him is dependent on a con- tingency •which may or may not happen, may be the sub- ject of an agreement to sell. Sale of Tiling Whkh has Ceased to Exist. From the very definition of a sale, it follows that there can be no sale without the existence of the thing sold.'"' Accordingly, if there is a contract for the present sale of specific goods, and the goods, unknown to the parties, have ceased to exist at the time of the contract, the contract is void. Thus in the leading case of Hastie v. Couturier,"" where a bought note had been signed for a cargo of corn on a vessel not yet arrived, but before the sale, and unknown to the parties, the cargo had been discharged and sold at an intermediate port, it was held in the house of lords that what the parties contemplated was that there was an existing something to be sold and bought, and that, no such thing existing, there was no contract which t'ould be enforced. The rule may be based both on the ground of mutual mistake and on the ground of impossibility of performance."^ And upon the latter ground, when the contract is for the future sale of specific goods, and, without the fault of 9 5 Hastie v. Couturier, 9 Exch. 102, 5 H. L. Cas. 673, reversing 8 Bxch. 40; Stricljland v. Turner, 7 Exch. 208; Allen v. Hammond, 11 Pet. (13; Thompson V. Gould, 20 Pick. 134; per Wilde, J., 130; Rice v. Dwi^'ht Manuf'g Co., 2 Cush. 80, 86; Franklin v. Long, 7 Gill & J. 407; Gibson v. Pelkie, 37 Mich. 3S0. Partial loss does not avoid the conti-act. The question is whether the article has been so far destroyed as no longer to answer the description. Barr v. Gibson, 3 Mees. & W. 390. 6 9 Exch. 102, 5 H. L. Cas. 673. 8T Pol. Cont. (4th Ed.) 370. Cf. Farrer v. Nightingal, 2 Esp. 639. 24 FORMATION OF THE CONTRACT. [Ch. 1 buyiT or seller, the goods perish before the property has passed, the contract is avoided."^ The necessity of ownership by the seller of the thing sold has al- ready been considered.*' Sale of Tkiiifi not yet in Existence or Acquired. A contract for the sale of goods not yet in existence or acquired by the seller can obviously have no greater effect, as a present sale, than a contract for the sale of goods that have ceased to exist. Nor can a contract purporting to effect a present sale of goods to be ac- quired operate so as to pass the property in the goods upon their acquisition by the seller, or have any greater force than an agree- ment to sell.^"° In such case, therefore, though the contract be in the form of a present sale, the legal property in the goods does not pass to the buyer unless the seller, after his acquisition of the goods, and before the rights of third persons, such as bona fide pur- chasers or attaching creditors, have intervened, does some act clearlj- showing his intention of giving effect to the original agree- ment,^"^ or the buyer takes possession of them under authority to seize, which is equivalent to a delivery.^"- »8 Post, p. 100. 99 Ante, p. ICi. 100 Lunn v. Thornton, 1 C. B. 379, 14 Law J. C. P. IGl; Gale v. Burnell, 7 Q. B. 850; Congreve v. Evelts. ]0 Exch. 20S, 23 Law J. Exch. 273; Hope v. Hayley, 5 EI. & Bl. 830, 25 Law J. Q, B. 155; Cbidell v. Galsworthy, 6 0. B. (N. S.) 471; Allatt v. Ciur, 27 Law J. Exch. 385; Jones v. Richardson, 10 Mete. (Mass.) 481; Moody v. Wright, 13 Mete. (Mass.) 17; Rice v. Stone, 1 Allen, 566; Head v. Goodwin, 37 Me. 182; Emerson v. European & N, A. Ry. Co., 67 Me. 387; \\'illiams v. Briggs, 11 R. I. 470; Gardner v. McEwen, 19 N. y. 123; Cressey v. Sabre, 17 Hun, 120; Hamilton v. Rogers, 8 ild. 301; Gittings V. Nelson, 80 111. .j!.)l ; Hunter v. Bosworth, 43 Wis. .jSO. 101 Langton v. Higgins, 28 Law J. Exch. 252. 112 Cougreve v. ET<>tts. 10 Exch. 2;J8, 23 Law J. Exch. 273; Hope v. Hay- ley, 5 El. & Bl. 830, 2.". Law J. Q. B. 155; Chidell v. Galsworthy, G C. B. (N. S.) 471; Allatt v. Carr, 27 Law J. Exch. :',s."i; Rowan v. Sharps' Rifle Manuf'g Co., 29 Conn. 283; Rowley v. Rice, 11 Jletc. (JIass.) 3-33; Chase v. Denny, 130 Mass. 50(J; Cook v. Corthell, 11 R. L 482; Chapman v. Weimer, 4 Ohio St. 481; McCaffrey v. Woodin, 05 N. Y. 459. See, also, cases cited in pre- ceding note. Contra: Allen v. Goodnow, 71 Me. 420; Deering v. Cobb, 74 Me. 334. As to the revocability of the license to seize: Chynoweth v. Tenney. 10 Wis. 341; McCaffrey v. Woodin, supra; Jones, Chat, ilortg. (3d Ed.) § 105 et seq. Ch. 1] THE THING SOLD. 25 Potential Existence. If, however, the goods have a "potential existence," as defined in the first exception, the property in them passes upon their coming into actual existence. In this way a man may sell the crop of hay to be grown on his field, the wool to be clipped from his sheep at a future time, the milk that his cows may yield the coming month, but not the wool of any sheep, or the milk of any cows, that he may buy within the year.^"" The exception in favor of goods having a "potential existence" is doubted by Chalmers, J., who says that there is no rational distinction between one class of future goods and another, and that the supposed rule appears never to have been acted on.^"* But the dicta of the English cases have been repeat- edly acted on in the United States, and the exception is here gen- erally recognized.'-'"' Rule in Equity. Similarly in equity, which treats as done what ought to be done, a contract for the sale of goods afterwards to be acquired, provided they are sufiiciently described to be identified, transfers the beneficial interest in them to the buyer as soon as they are ac- quired.^"" But it is only the equitable interest which passes, and los Grantham v. Hawley, Hob. 132; Robinson t. MacDonnell, 5 Maule & S. 228; 14 Vin. Abr. tit. "Grant," p. 50; Shep. Touch. "Grant," 241; Perk. §§ 65, 90. See, also, Foster's Case, 1 Leon. 42. 104 Chalm. Sale, 10. 10 5 Unborn offspring of animals: Fonville v. Casey, 1 Murph. 389; Hall v. Hall, 24 Conn. 358. During gestation: McCarty v. Blevins, 5 I'erg. 195; Sawyer v. Gerrish, 70 Me. 254. Butter and cheese to be made: Conderman V. Smith, 41 Barb. 404. Crop not yet sown: Briggs v. XJ. S., 143 U. S. 340, 12 Sup. Ct. 391; Watkins v. Wyatt, 9 Baxt. 250; Andrew v. Newcomb, 32 N. Y. 417, 421; Rawlings v. Hunt, 90 N. C. 270; Gotten v. Willoughby, 83 N. C. 75 (already sown); McCown v. Mayer, 05 Miss. 537, 5 South. 98; Moore V. Byrum, 10 S. C. 452; Arques v. Wasson, 51 Cal. G20; Headrick v. Brat- tain, 03 Ind. 438. But not where the grant covered an indefinite time. Shaw V. Gilmore, 81 Me. 390, 17 Atl. 314; Pennington v. Jones, 57 Iowa, 37, 10 N. W. 274. See, also, Lewis v. Lyman, 22 Pick. 437; Heald v. Builders' Ins. Co., Ill Mass. 38; Van Hoozer v. Corey, 34 Barb. 9; Smith v. Atkins, 18 Vt 461. Contra: Comstock v. Scales, 7 Wis. 159; Gittings v. Nelson, 80 111. 591; Hutchinson v. Ford, 9 Bush, 318. loeHolroyd v. Marshall, 10 H. L. Cas. 191, 33 Law J. Ch. 193; Tailby v. Official Receiver, 13 App. Cas. 523; CoUyer v. Isaacs, 19 Ch. Div. 342; 26 FORMATION OF THE CONTRACT. [Ch. 1 if, before the buyer gets the legal proiierty, the seller disposes of the goods to a bona tide purchaser without notice, the rights of the buyer are defeated/"' M'lKjcriiiy Coidnict — Sale of Chance. It was once held that a contract for the sale of goods 1o be deliv- ered at a future day, when the seller had not the goods, but in- tended to go into the market and buy them, was a mere wager on 1hi' price of the commodity, and was hence invalid. ^"^ But this doc- trine has been exjiloded.'"" Nor is an executoiy contract of sale invalid because tlie acquisition of tli'.^ thing by the seller is uncer- tain, as in the case of goods to arrive by a certain ship.^^" It is only in this sense that there can be the sale of a eliance. known to the civil law as "venditio spei." "^ Thus it has been held that a sale of fish to be caught had no effect to pass the property in the fish when caught,"- but there seems no reason why a contract by a fisherman to sell all the fish he might catch on a particular voyage should not be good as an executory agreement. ]\Iit(liell V. "Winslow, 2 Stovy, (i:;i), VcH. Cas. No. 9,67.3; Pennock v, Coe, 23 How. 117; Beall v. ^^'hite, !I4 U. S. ;!SL'; Brett v. Carter, 2 I.ow, 4.-,S. Fed. ('as. No. 1,844; Barnard v. Norwicli & W. K. R. Co., 4 Cliff. ?,:•!. Fed. Cas. No. 1,0(17; :\I(('aflrc.v v. Woodin, G5 N. Y. 4."!t; Benjamin v. Elmira, ,T. & r 11. (.'0., 40 Baib. 441; Pliiladelphia, AV. & B. R. Co. v. Woelpper, 04 Pa. 8t. .".lii;; Smitluu-.st v. i^dnmmls. 14 N. .t. Eq. 40S; Williams v. Winsor, 12 R. I. 1.1; Apperson v. :\Ici. B. 2S.S; Pi-ideaux v. Bunnett. 1 C. B. (X. ,S.) 013. Jlistake as to condition of liorse: Wheat v. Cross. 31 Mil. '.I'.i. Mistake as to solvency of maker of note iKin.yht through liioker: Ilerht \. Batehellcr, 147 Mass. ;J35, 17 X. E. iril; Taylor v. Fleet, 4 Barb. '.C. Where a woman sold an uncut diamond for $1 to a jeweler, both being ignorant of its value, and it proved to be worth $1.0110, she eould not rescind. Wood v. Boyuton, 64 Wis. 20.%, 25 X'. W, 42. It is ditflcult to reconcile with the current of authority the case of Sher- wood V, AA'alkci-, 00 Jlich. 508, 33 X. W. Ol'.i, where the subject of sale was a blooded cow, believed by the jjaiiies to lie barren, and hence worth only .$80, v^'hich was the price, Init actually capable of breeding, and hence woi-th $750 or $l,0()O, ;ind it was held that the seller could rescind ou the ground that the mistake affected the sub.^tanee of the whole consideration. Ch. 1] MUTUAL ASSENT AND FORM OF CONTRACT. 31 Form of Contract. Aside from the provisions of the statute of frauds, which will be considered later, no writing or other formality is necessary to effect a sale or contract for sale. If the contract is in writing, the ordinary rules of evidence apply. If the assent of the parties is not clearly expressed, it may be implied from their language ^^^ or conduct, as if a customer takes goods from a counter, and nothing is said as to price, a contract to pay their reasonable value is implied.^'? In the same way, where there is an express contract, and goods are sent which are not in accordance with it, but which neverthe- less the buyer keeps, a contract to pay for them is implied. This doctrine is most frequently applied where the contract is for a certain quantity of goods, only a part of which are delivered.^'^ Sale by Suit. There is one case where a sale takes place by implication of law rather than by the mutual assent of the parties, either express or implied. Where in an action for trespass to goods, or the deten- tion or wrongful conversion thereof, the plaintiff recovers the value of the goods, as damagfes, and the defendant satisfies the judgment, the transaction operates as a sale of the goods by the plaintiii to the defendant.^^^ An unsatisfied judgment does not pass the prop- 129 A "grumbling" assent. Joyce v. Swann, 17 C. B. (N. S.) 84, 101. 130 Bl. Comm. bk. 2, c. 30; Hoadly v. McLaiue, 10 Bing. 482, 487, per Tindal, C. J. Using goods sent without order, witli knowledge tliat the sender ex- pects payment, constitutes an implied sale. Wellauer v. Fellows, 48 Wis. 105, 4 N. W. 114; Indiana Manuf'g Co. v. Hayes, l.'i.j Pa. St. 160, 26 Atl. G. 131 Oxendale v. Wetberell, Barn. & C. 380; Colonial Ins. Co. of New Zealand v. Adelaide Mar. Ins. Co., 12 App. Cas. 128, 138; Richardson v. Dunn, 2 Q. B. 218; Hart v. Mills, 15 Mees. & W. 8.5; Bowker v. Hoyt, 18 Pick. 555; Sentell v. Mitchell, 28 Ga. 196; Richards v. Shaw, 67 111. 222; Flanders y. Putney, 5S N. H. 3.j8; Booth v. Tyson, 15 Vt. 515, 518. Oxen- dale V. Wetherell, supra, has sometimes been disapproved. Champlin v. Row- ley, 13 Wend. 258, 18 Wend. 187; Kein v. Tupper, 52 N. Y. 555; Witherow V. Witherow, 16 Ohio, 238. See post, p. 100. 132 Jenk. 4 Cent. 88; Cooper v. Shepherd, 3 C. B. 2(30, 15 Law J. C. P. 2:;7. On principle, the recovery would only have this effect where the value of the thing converted is included in the judgment. Benj. Sales, § 40. .133 Brinsmead v. Harrison, L. R. C. P. .jS4, affirmed in L. R. 7 C. P. 547; Ex parte Drake, 5 Ch. Div. 866; Hepburn v. Sewell, 5 Har. & J. 211; Love- 32 FORMATION OP THE CONTRACT. [Ch. 1 Whether the Contract he of Sale a Question of Intention. Whether a contract be a contract of sale, or some other kind of a contract, is a question of substance, not of form, and depends on the intention of the parties. Thus, as has been seen, it is a ques- tion of the real meaning of the parties, whether a contract is to be construed as a contract of sale or of bailment; ^^* and the law will look to the substance of the transaction, and not to the name by which the parties designate it.^^'' And if the mutual intention to buy and sell be wanting there is no sale. Thus the sale of an article containing a hidden treasure is no sale of the treasure; '^'^ and if, by mistake, other goods than those agreed upon be de- livered, the property in the goods is not ti'ansferred.'^^^ THE PRICE. 16. The price may be fixed by the contract of sale, or may be left to be fixed in a manner thereby agreed, or may be left to subsequent arrangement. 17. When the price is not determined by the contract of sale, the lavsr implies an agreement to pay a reasonable price. As has been stated; the consideration for a sale must be a price in money, paid or promised. Where the price has been expressly agreed on, no question can arise. But the price need not be specified, if it can be ascertained in accordance with the contract.''''* joy V. Murray, 3 Wall. 1, IG; Osterhout v. Roberts, 8 Cow. 43; Marsden v. Cornell, 62 N. Y. 21.:>; Brady v. Whitney, 24 Mich. 154. Contra: Floyd v. Brown, 1 Rawle, 121; Marsh v. Pier, 4 Rawle, 273; Merrick's Estate, 5 Watts & S. 17. 13* Ante, p. 3. 135 Sale or lease. Hervey v. Rhode Island Locomotive Works, 93 U. S. <:S; S. 272. 30 Law J. Q. B. 252, Groves v. Buck, 3 Maule i^- S. 17S; Garbutt v. Watson, 5 Barn. & Aid. 013, per Abbott, C. J.; Rondeau v. Wyatt. 2 H. Bl. (S, pei- Lord Lough- borough; Cooper V. Elston, 7 Term R. 14, per Lord Kenyon, C. J. 10 3 Maule & S. 178. Ch. 2] WHAT CONTRACTS ARE WITHIN THE STATUTE. 39 plaintiff out of slabs owned by him was not within the statute. Second. It was suggested that, if the materials be furnished by the employer, the contract is for work and labor, and not of sale; but that if the materials be furnished by the workman, who makes the chattel, he cannot maintain work and labor, because his labor is bestowed on his own materials and for himself.^^ The first branch of this rule falls within Lee v. Griffin, because, if the mate- rials are furnished by the employer, there can be no sale of them to him. Eut tlie second branch of the rule is inaccurate, since a man may be employed to do work on his own materials without an intention on the part of himself and his employer to transfer the property in the completed article; for example, to expend work and materials in perfecting an invention. ^^ Third. It was suggested that the true test was "whether the work and labor is the essence of the contract, or whether it is the materials that are found." ^^ But the fatal objection to this test, as pointed out by Benjamin,^* and indeed to any test except that applied in Lee v. Chnffin, is that, however small the relative value of the materials to the labor, as in the case of a painting, the employer cannot get title to the thing except through the transfer of the property in it from the maker. And it is the acquisition of the thing by the employer which the contract really contemplates. It is true that extreme cases may be put, such as that of an attorney employed to draw a deed and using his own paper and ink, or that of a man sending a button to be used by his tailor in making a coat. But such trifling matters cannot be considered as having entered into the contemplation of the parties, nor as forming part of the real consideration, and are to be disposed of by the rule, "De minimis non curat lex." ^° 11 Smith v. Surman, 9 Barn. & C. 5G8, per Bayley, J.; Atkinson v. Bell, 8 Barn. & C. 277, per Bayley, J. 12 Grafton v. Armitage, 2 C. B. 336, 15 Law J. 0. P. 20. Or if a farrier be employed professionally, using his own medicines, there is no sale of the medicine, but the contract is for work, labor, and materials. Clark v. Mum- ford, 3 Camp. 37; Langd. Cas. Sales, 1039. 13 Clay V. Yates, 1 Hurl. & N. 73, 25 Law J. Exch. 237. 14 Benj. Sales, § 10^. 15 Benj. Sales, § 107. 40 FORMATION OF THE CONTRACT. [Cll. 2 Same — Massnchvseds RvJe. In the English case of Garbutt v. \Yatson/'' where a contract for the sale of flour to be manufactured was held to be within the stat- ute, Abbott, 0. J., remarked: "In Towers v. Osborne [1 Strange, •"lOri], the chariot \\ hich was ordered to be made would never, but for that order, have had any existence. But here the plaintiffs were pro- ceeding to grind the flour for the purpose of general sale, and sold this flour to the defendant as part of their general stock." In ac- cordance with this dictum, though not expressly upon its authority, it was held in Mixer v. Howarth " that a contract to build a buggy for the defendant out of materials partly Miought, but not put together, was not a contract of sale within the statute, and Shaw, C. J., said that "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 ap- plies.'' In Gardner v. Joy,^* on the other hand, where the defend- ant ordered 100 boxes of candles, at '21 cents a box, which the plain- tiff was to manufacture, the same judge held that the case was not distinguishable from Garbutt v. "NA'atson. And in a later case ^^ he laid down the distinction that "when a person stipulates for the future sale of articles which he is habitually making, and which at the time are not made and finished, it is essentially a con- tract of sale, and not a contract for labor; otherwise, when the article is made pursuant to the agreement." In Goddard v. Bin- ney,^" in which the facts are similar to those in ^lixer v. Howarth, the court refers to Lee v. Griffin, but adheres to the Massachusetts rule, the correctness and justice of which it approves. Same — Nciv York Rule. The principle acted on in the earlier English cases, that a con- tract for the sale of an article not in existence is not within the 16 5 Barn. & Aid. G13. 17 21 Pick. 120.".. 18 9 Mete. (Mass.) 177. 19 Lamb v. Crafts, 12 Jletc. rilass.! ?.."G. 20 115 Mass. 4.50. See. also, Speneer v. Cone, 1 Mete. (Mass.) 2Sr>,: Water- man V. Meigs, 4 Cush. 497; Clarli v. Nieiiols, 107 Mass. 547; Dowliug v. McKenney, 124 Mass. 480; May v. Ward, 134 Mass. 127. Ch. 2] WHAT CONTRACTS A KE WITHIN THE STATUTE. 41 statute,^ ^ is the foundation of the so-called New Yoik rule. Thus in Crookshank v. E'lrrell ^^ it was held that a contract to manu- facture the woodwork of a wagon was not within the statute, and in Sewall v. Fitch "^ the same decision was reached in regard to a contract to sell rails which were to be made by the seller; and the rule was enunciated that a contract for the sale of goods existing in solido is within the statute, but that a contract for the sale of goods not yet made, and to be delivered at a future day, is a con- tract for work and labor, and is not within the statute. In Downs V. Eoss,^* however, a limitation of this rule was introduced, and it was held that a contract to sell wheat, part of which was to be cleaned and part threshed, was within the statute, Bronson, J., observing that, "if the thing exist at the time in solido, the mere fact that something remains to be done to put it in a marketable condition will not take the contract out of the operation of the statute." The rule ^° and the limitation ^° have been followed in the later New York cases. The cases are discussed and recon- ciled in Cooke v. Millard,^' in which it was held that a contract for the sale of lumber which the seller was to dress and put in condi- tion to fill the order of the buyer was within the statute. The rule is there stated that an agreement for the sale of a commodity not in existence, but which the seller is to manufacture or put in condition to be delivered, such as flour from wheat not yet ground, or nails to be made from iron belonging to the manufacturer, is not a contract of sale; but that, when the chattel is in existence, the contract should be deemed to be one of sale, even though it may have been ordered from a seller who is to do some work upon 21 Ante, p. 38. 2 2 18 Johns. 58. 23 8 Cow. 215. 24 23 Wend. 270. 2 5 Robertson v. Vaughn, 5 Sandf. 1; Bronson v. Wiman, 10 Barb. 400; Parker v. Schenck, 28 Barb. 38; Parsons v. Loucks, 48 X. X. 17; Warren Chemical & Manufacturing Co. v. Holbrook, 118 N. Y. 580, 23 N. E. 90S. See Hinds v. Kellogg (Com. PI. N. Y.) 13 N. Y. Supp. 922. 26 Smith v. New York Cent. R. Co., *43 N. Y. 180; Cooke v. Millard, 05 N. Y. 352; Alfred Shrimpton & Sons v. Dworsky, 2 Misc. Rep. 123, 21 N. Y. Supp. 461. 27 65 N. Y. 352. 42 FORMATION OF THE CONTRACT. [Ch. 2 it to adapt it to the use of tlie purchaser. Dwight, C, who delir- ered the o])iuion, obsiTved in i-egaid to Lee v. Griffin that, if the subject were open, no more convenient rule than that of Lee v. (h-iffin, which is at once so philosophical and comprehensible, could be adopted, but that it M'as too late to adopt it in full. Same — Euk Elsewhere in United StuUa. It would be difficult, if not impossible, to classify the American cases as falling within the English, the iN'ew York, or the Massa- chusetts rule.-" The later rule has, however, met with most gen- eral approval.-" The New York rule has been followed in Mary- land.^" The English rule seems to prevail in Minnesota,^ ^ and has in a recent case been expressly adopted in Missouri." - Chattel Intended for a Fiji are. Contracts for furnishing an article, and fixing it to the free- hold, are to be distinguished from contracts of sale.^^ In such :s In rresi.ntt v. Locke, .51 N. H. 94, it was held that a coutract to buy what spoke.s phiintiff should saw at his mill vvas within the statute, and the opin- ion cites Lee v. Griffin, 1 Best. & S. 272, 30 Law J. Q. B. 252; but the court draws a distinction like that at one time suggested in England (supra) be- tween contracts of sale and those in which the labor and skill of the work- man are the essence of the contract. See, also, Pitkin v. Noyes, 4S N. H. 294. Cf. Gilman v. Hill, 'M X. 11. 311. A contract to cut all the trees on defendant's land, and to deliver the logs with others already cut at plaintiff's mill, is within the statute. Ellison v, Brigham, 38 Vt. 64. A contract to paint a portrait is not within the statute. Turner v. Mason, 65 Mich. 662, 32 N, W. 846. 29 Hight V. Ripley, 19 Me. 137; Abbott v. Gilchrist, 38 Me. 200; Edwards V. Grand Trunk Ry., 4S Me. 379, 54 Mc. 105; Crockett v, Scribner, 64 Me, 447; Finney v, Apj;ar, 31 N. J, Law, 271 (Gf, Pawelski v. Hargreaves, 47 X. J, Law, 3:'.4); Bird v. Muhlinbrink, 1 Rich, Law, 199; Meincke v. Falk, 55 Wis. 427, 13 X, W, 545, distinguishing Hardell v. McCIure, 1 Chand, (Wis.) 271, 2 Pin. 289, in which the modem English rule was approved; Cason v, Cheely, G Ga. 554; O'Xeil v. New York & Silver Peak Min, Co., 3 Nov. 141; Orman v. Hager, 3 X. M. 331, 9 Pac, 303; IMighell v, Dougherty, SG Iowa, 480, 53 X. W. 402. See, also, Allen v. Jarvis, 20 Conn, 38; Atwater v. Hough, 29 Conn. 509. 30 Eichelberger v. McCauley, 5 Har. & J. 213; Rentch v. Long, 27 Md. 188. 81 Brown v. Sanborn, 21 Minn. 402. 52 Pratt V. Miller, 109 Mo. 7S. 18 S. W. 065; Burrell v. Highleymau, 33 Mo. App. 183. Also in Wolfeuden v. AVilson, 33 U. C. Q. B. 442. 53 Bonj. Sales, § 108. Ch. 2] WHAT ARE GOODS, WARES, AND MERCHANDISE. 43 cases the intention is not to make a sale of movables, but to make improvements on the real property of which the article furnished, upon being afSxed, becomes a part; and the consideration to be paid is, not for a transfer of chattels, but for work and labor done and materials furnished in adding something to the land.^* Similarly, a contract to make improvements upon a chattel be- longing to the employer is a contract for work, labor, and ma- terials.' '^ Auction Sales. Although it was questioned by Lord Mansfield whether the stat- ute applied to sales of goods at auction,'"' it is universally held that it applies to them as well as to private sales.'^ WHAT ARE GOODS, WARES, AND MERCHANDISE. SI. "Goods, wares, and merchandise" comprehend: (a) All corporeal movable property. (b) In the United States, generally, (but not in England), incorporeal property, such as shares, promissory notes, bank bills, etc. (c) Pructus naturales and fructus industriales, the ownership w^hereof is to pass to the buyer after severance thereof from the soil. (d) Fructus industriales (perhaps) also when such ownership is to pass before severance. 22. "Goods, wares, and merchandise" do not compre- hend: (a) Fructus naturales, the ownership w^hereof is to pass before severance [and from the fur- si Tripp v. Armitage, 4 Mees. & W. 687; Clark v. Bulmer, 11 Mees. & W. 243. 3 5 Anglo-Egyptian Nav. Co. v. Eennie, L. E. 10 C. P. 271. 3 6 Simon v. Motives, 3 Bun-ows, 1921, 1 Wm. Bl. 599. 3 7 Hinde v. Whitehouse, 7 East, 5-j8, per Lord EUenbo-rough; Kenwortby V. Schofield, 2 Bam. & C. 945; Davis v. Rowell, 2 Pick. 64; Morton v. Deau, 13 Mete. (Mass.) 385; Pike v. Balrh, 38 Me. :J02; Johnson v. Buck, 35 N. J. Law, 338; Davis v. Robertson, 1 Mill, Const. 71; Sanderlin v. Trustees, R. M. Charlt. (Ga.) 551. 41 i'OEMATION OF THE CONTRACT. [Cll. 2 ther growth whereof the buyer is to derive benefit].^ (b) Tenants' fixtures sold w^hile unsevered. Incorporeal Properly — Choses in Action. In England the term "goods, wares, and merchandise" has been Ihnited to corporeal movable property, and is held not to include shares, stock, documents of title, choses in action, and other in- corporeal rights and property.^" In the United States, however, the term is as a rule held to include incorporeal property, such as stock,*" bills and notes,*^ bank bills,*- and accounts.*^ In some states a broader rule is required by the language of the statute, as in jN'ew York, California, Wisconsin, and Minnesota, where the 3 8 If Marshall v. Green, 1 C. P. Div. G."., and the similar decisions in this country, be good law, the words within the brackets must stand. See post, p. 41j. 30 Humble v. Mitchell, 11 Adol. & E. 205; Knight v. Barber, 10 Mees. & W. lit;, 16 L. J. Exch. 18; Bradley v. Holdsworth, 3 J\Iees. & W. 422; Dun- cuft V. Albrecht, 12 Sim. IS'.l; Colonial Bank v. Whinney, 30 Ch. Div. 261, •2sn; Benj. Sales, § 111. See Evans v. Davies [1803] 2 Ch. Div. 210. 40 Tisdale v. Harris, 20 Pick. 9; Boardman v. Cutter, 128 Mass, 388; North V. Forest, 1.5 Conn. 400: Pray v. Mitchell, 60 Me. 430; Fine v. Hornsby, 2 JIo. App. 01; Bernhardt v. Walls, 29 Mo. App. 2i)6. See Somerby v. Buntin, lis Mass. 270; Meehan v. Sharp, 151 Mass. 504. 24 N. E. 907; Green v. Brookins, 23 Mich. 48, .54; CJadsden v. Lance, 1 :McMu1. Eq. 87. "The words of the statute have never yet been extended by any court beyond securities which are subjects of common sale and barter, and which have a visible and palpable form." Somerby v. Buntin, sujira, per Gray, C. J., and Meehan V. Sharp, supra. But AA'ebb v. Baltimore & K. S. R. Co., 77 Md. 02, 26 Atl. 113, follows the English rule, notwithstanding a dictum to the contrary in Colvin V. Williams, 3 Har. & J. 38. 41 Baldwin v. Williams, 3 Mete. (Mass.) 307; Gooch v. Holmes, 41 Me. 523; Pray v. Jliteliell, 60 Me. 430, 435; Hudson v. Weir, 29 Ala. 204; Greenwood V. Law, 55 N. J. Law, 108, 20 Atl. 134 (bond and mortgage). Contra, Whit- temore v. Gibbs, 24 N. H. 484; Beers v. Crowell, Dud. (Ga.) 28 (United States treasury checks on Bank of U. S.); A'awter v. Grlltin, 40 Ind. 000. 42 Riggs V. Magruder, 2 Crauch, C. C. 143, Fed. Cas. No. 11,828; Gooch v. Holmes, 41 Me. 523. Gold coin, when the subject of a contract of sale, is within the statute. Peabody v. Speyers, 50 N. Y. 230. 43 Walker v. Supijle, 54 Ga. 179. Ch. 2^ WHAT ARE GOODS, WARES, AND MERCHANDISE. 45 provision expressly includes choses in action,''* and in Florida, where it uses the term "personal property." *" Interest in Land — Fuurth Section of the Statute. The fourth section of the statute of frauds, which has been sub- stantially enacted in most states of this country, provides that "no action shall be brought * • ♦ upon any contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them, * * * unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other per- son thereunto by him laAvfully authorized." When a contract of sale is made, the subject-matter of which is something attached to the soil, the question frequently arises whether such sale is of an interest in land, and hence whether it is within the fourth sec- tion, or whether it is a sale of goods, wares, and merchandise, and hence within the seventeenth section, or whether it is neither. The question which section governs may be of vital importance, because the fourth section requires a written memorandum or note under all circumstances and whatever the amount, while under the seventeenth section the necessity of a writing does not exist if the amount is under £10, or if the provisions in respect of performance or payment have been satisfied. Fructus Naturales and Fructus Lidustriales. Inasmuch as "goods, wares, and merchandise" comprehends all movable corporeal property, an executory contract for the sale of a thing attached to, the soil, for example, trees, if the thing is to be severed from the soil before the sale, is within the seventeenth section, and is not within the fourth section, of the statute; for, though the subject of sale be an interest in land when the contract is made, it has, by severance from the soil, become "goods, wares, and merchandises" when the sale is executed.*" But, if the con- iiArtcher v. Zeh, 5 Hill, 200; Peabody v. Speyers, 56 N. Y. 230; Allen v. Agulrre, 7 N. Y. 543; Mayer v. Child, 47 Cal. 142; Spear v. Bach, 82 AVis. 192, 52 N. W. 97. 4s Southern Life Ins. & Trust Co. v. Cole, 4 Fla. 359. 40 Smith V. Surman, 9 Barn. & C. 561; Washbourn v. Burrows, 1 Exch. 107, per curiam; AVatts v. Friend, 10 Barn. & C. 446; Parker v. Staniland, 11 East, 362; Sainsbury v. Matthews, 4 Mees. & W. 343; AVhitmarsh v. Walker, 46 rOEMATION OF THE COXTRACT. [Ch. 2 tract contemplates a present sale, a different (incstion arises, which is to be determined in the case of gi-owin,n- crops upon a somewhat artificial distinction. A distinction exists between what are Icnown as '■fructus natu- rales," which are the natural product of the soil, as trees and grass, and "fructus industriales," which are the product of annual labor, as wheat or potatoes. Fructus naturalcs are an interest in land, but fructus industriales are chattels, and not an interest in land. From the character of fructus naturales as an interest in land, it follows that an agreement vesting a present interest in them be- fore severance is within the fourth section. Smh, at least, is the prevailing rnle in this country,"" and was supposed to be the law under all circumstances in England ■** until the case of Marshall V. Green,*" in IST.l, in which it \\as hi-ld that a sale of standing timber, to be cut by the jjurchaser as soon as jmssible, was within the seventeenth, and not within the fourth, section. It is said by the English editors of Benjamin "^ that this decision is open to ■criticism, and must be supported either on the ground that title was not to pass until severance, which would bring it within the 1 Mete. (Mass.) 313; Claflin v. Carpenter, 4 Jletc. (Mass.) 5S0; Nettleton v. Sikes, 8 Mete. (Mass.) 34; Drake v. Wells, 11 Allen, 141; White v. Foster, lU-J. Mass. 375, 37S; Fletcher v. Livingston, l."i3 Mass. 3ss, -.y.H). 2(i X. E. 1001; Banton v. Shoiey, 77 Me. 48, ."1; Kilmore v. Howlett, 48 N. Y. .j(.;9; Boyce v. Washburn, i Hun, 7'..)L'; Upson v. Holmes, .ll Conn. .j(.)U. Sl'C. also, Slo- €um V. Seymour, 3(i X. J. Law. ]."..s, per BeiUe, .J.; (ireeu v. North Carolina R. Co., 73 N. C. ."124; (Jwens v. Lewis, 4(; Ind. 488; Cool v. Peters Box & Lumber Co., .87 Ind. .">31; Brown v. Sanborn, 21 Minn. 4(_I2; Benj. Sales, §§ 118, ll'.J; Blaekb. Sales, p. .",. "White V. Foster, 1(.I2 JIass. :;7.-,; Putney v. Day, 6 X. H. 430; (Jlmstead V. Xiles, 7 X. H. r,22; Kingsley a. H.;lbro,.k, 4.1 X. H. 313; Howe v. Batchel- der, 49 X. H. 204; Green v. Armstiong, 1 Denio, 'joo; Thomson v. Poor, 10 X. X. Supp. .:.!i7, .-,7 Hun, 288; Id., 22 X. Y. Supp. .TmO, (;.7 Hun, C53; Slo- cum v. Seymour, 3(; X. .J. Law, 138; Ilarroll v. .Miller, 35 Miss. 700; Owens v. Lewis. 46 Ind. 48'J; Daniels v. Bailey. 43 Wis. 500; Lillie v. Dunbar, (.;2 Wis. 108, 22 X. W. 407; Hiith v. Graham, 50 Ohio St. 57, 33 X. E. 90. *s Rodwell v. Phillips, 9 Jlees. & W. 501; Crosljy v. Wadsworth, G East, 002; Teal v. .\uty, 2 Brod. tt B. 00 (trees); Scorell y. Boxall, 1 Younge & J. 300; Anonymous, 1 Ld. Kaym. 182, contra. 49 1 (J. P. Div. 35. 00 Benj. Sales, § 120. ,See, also, Kerr, Dig. Law Saies, p. 5 (s). Ch. 2] WHAT ARE GOODS, WARES, AND MERCHANDISE. 47 principle governing executory contracts of sale above stated, or that it must be taken to have introduced the limitation that, even when the property in fructus naturales passes before severance, if the intention is that the buyer is to derive no benefit from their further growth, the sale is within the seventeenth, and not within the fourth, section. Apparently the judges who decided Marshall v. Green took the latter view of the case, and the same has been taken by some courts in the United States." In a later English case," Chitty, J., refused to apply the limitation to the sale of building materials in a building to be removed by the buyer, and his criti- cisms apply equally to Marshall v. Green and to the American cases referred. to. "It is sold," he says, "as building materials, and, if the intention of the parties prevailed, it might mean that it is sold as a chattel, but the point still is that it is not a chattel at the time of the sale, and the statute of frauds, so far as I can see, does not enable parties to say: 'We will agree to treat this thing as a chattel, when in point of law it is a hereditament.' " In Massa- chusetts, where the above limitation of the rule is not recognized, the courts construe contracts for the sale of trees and other fructus naturales, even if the trees are to be cut by the purchaser, as exec- utory contracts in which the title is not to pass until severance and conversion into personalty and by which the purchaser has until severance only a revocable license to enter and remove the trees. ^^ 51 sterling v. Baldwiu, 42 Vt. 306; McClintock's Appeal, 71 Pa. St. 365; Cain V. McGiiire, 3 B. Mon. 340; Byassee v. Reese, 4 Jletc. (Ky.) 372. See, also, Bostwick v. Leach, 3 Day, 476; Purner v. Piercy, 40 Md. 212; Smith V. Bryan, 5 Md. 141; Foster v. Mabe, 4 Ala. 402; Scoggin v. Slater, 22 Ala. (iS7. If the timber is to be taken off by the purchaser without specification as to time, the contract is within the fourth section. Huff v. McCauley, 53 Pa. St. 200; Pattison's Appeal, 01 Pa. St. 294; Miller v. Stevens, 100 Mass. 518. 6 2 Lavery v. Pursell, 39 Ch. Diy. 508, 57 L. J. Ch. Div. 570. Bs White v. Foster. 102 Mass. 375, 379, and Massachusetts cases cited in note supra. Usher, Sales, § 96. The Massachusetts cases construe in this way contracts which elsewhere would perhaps be construed as intended to pass title before severance, and as hence within the fourth section, but the peculiarity of the Massachusetts cases concerns, at most, the construction of the contract, and not the application of the statute. If the contract grants 48 KORiMATION OF THE CONTRACT. [Ch. 2 From the character of fructus industriales as chattels, on the other hand, it follows that a sale of them is not Avithin the fourth section/'' But, though they are chattels,^" it is an open question whether they are "goods, wares, and merchandises," and conse- quently within the seventeenth section.'*'' Whether fructus indus- triales include a crop which is neither annual nor permanent, but which affords a crop either the second or third year, or a succession of crops for several years, is a question on which there is little au- thority; but it would seem that the crop of the first year would be fructus industriales, and that the crops of subsequent years would be friictus naturales, unless, like hops, they require cultivation for each successive crop, in which case they would be fructus indus- triales till exhausted.^' Remocable Fixtures. Removable fixtures are neither within the fourth section ^' nor the seventeenth section; °° though an executory contract for the an estate in the trees while growing, the fourth section applies. White v. Foster, supra. 54 Evans v. Itoberts, 5 Barn. & C. 836; Jones v. Flint, 10 Add. & E. 753; Warwick v. Bruce, 2 Maule & S. 205; Dunne T. Ferguson, Hayes, 540; Back- enstoss v. Stabler, 33 Pa. St. 2.jl, 2.55; Marshall v. Ferguson, 23 Cal. 66; Davis V. McFarlane, 37 Cal. 634; Vulieevieh v. Skinner, 77 Cal. 239, I'J Fac. 424; Gratf v. Fitch, 58 111. 373. 66 Whipple V. Foot, 2 Johns. 418; Newcomh v. Ramer, Id. 421, note a; Brittain v. McKay, 1 Ired. 205; Penhallow v. Dwight, 7 Mass. 34; West- hrook V. Eager, 16 N. J. Law, 81; Brlcker v. Hughes, 4 Ind. 146; Bull v. Grlswold, 19 111. 631. 66 For dicta in the afllrmative: Evans v. Robeits, 5 Barn. & C. 836, per Bayley, J., and Littledale, J.; Marshall v. Green, 1 C. P. Div. 35, 42, per Brett, J.; Dunne v. Ferguson, Hayes, 540, per Joy, C. B.; Marshall v. Fer- guson, 23 Cal. 60, per Crocker, J, ; Sherry v. Picken, 10 Ind. 375, per Perkins, J. See, also, Ross v. Welch, 11 Gray, 235. Lord Blackburn says that the proposition is "exceedingly questionable." Blackb. Sales (2d Ed.) p. 13; Eenj. Sales, § 127; Langd. Cas. Sales, 1031. 67 Benj. Sales. §§ 128, 129. citing Graves v. Weld. 5 Barn. & Adol. 105. "A growing crop of peaches or otlier fruit, requiring periodical expense, in- dustry, and attention, * * * may bo well classed as fructus industriales." Purner v. Piercy, 40 Md. 212, 223. per Stewart, J. 6 8 Hey sham v. Dettre, 80 Pa. St. 500; Powell v. McAshan, 28 Mo. 70. "In 69Hallen v. Rundei-, 1 Cronip., M. & R. 200; Lee v. Gaskell, 1 Q. B. Div. 700, 45 Law J. Q. B. 540. See Benj. Sales, § 127. Ch. 2J CONTRACT FOR THE PRICE OB VALUE OF £10 ($50). 49 sale of fixtures to be severed before the title passed would doubt- less be held an executory sale of goods, within the principle pre- viously stated."" WHAT IS A CONTRACT FOR THE PRICE OR VALUE Or £10 ($50). 23. The statute of frauds includes : (a) An entire contract for the sale of goods and for other objects not ■within the statute, ■where the value of the goods exceeds the statutory- amount. (b) An entire contract for the sale of different goods, the joint value "whereof exceeds the statutory amount. (c) A contract for the sale of goods of unascer- tained value at the date of the contract, the value -whereof is afterwards ascertained to exceed the statutory amount." The rule that an entire contract for the sale of goods, and for other matters not within the statute, is invalid, if the value of the goods exceeds the statutory amount, was established by Harman V. Keeve,'^ in which the plaintiff agreed to sell to the defendant a mare and foal, which were above the value of £10, and also to agist them and another mare and foal for £30. The statute was held to apply, but the court said that the plaintiff might recover the value of the agistment. In the Massachusetts case of Irvine v. Stone,"'' however, in which a contract for the purchase of a cargo of the case of fixtures which are not incorporated with, but merely annexed to, the freehold, the rule is well settled that the statute does not apply." Strong v. Doyle, 110 Mass. 92, per Colt, J. But see Conner v. Coffin, 22 N. H. 538. 60 Kerr, Dig. Sales, p. b (t). 61 See Kerr, Dig. Sales, § 7. 62 18 C. B. 587, 25 Law J. C. P. 257. See, also, Astey v. Emery, 4 Maule & S. 202; Cobbold v. Caston, 1 Bing. 399, 8 Moore, 456. 63 6 Cush. 508. See, also, McMullen v. Riley, 6 Gray, 500. SALES— 4 50 FORMATION OF THE CONTRACT. [Ch- 2 coal at Philadelphia at an agreed price per ton, and for the pay- ment of the freight, was held within the statute, the contract was held also to be unenforceable as to the freight. The leading case upon the rule that an entire contract for the sale of various articles, neither of which is of the statutory value, but whose value in gross exceeds it, is within the statute, is Baldey v. Parker."* In this case the defendant bought at the plaintiff's shop a number of articles, each at a separate price less than £10, the whole amount being £70, and the case was decided upon the ground that the transaction constituted one entire contract. The cases in this country are in harmony with Baldey v. Parker,"'' and they even extend the rule to an auction, where the articles are struck off separately at distinct prices,"" though in England in such a case a distinct contract arises for each lot."' The rule that the statute applies, although it be not ascertained till after the date of the contract that the value exceeds the stat- utory amount, was involved in Watts v. Friend,"^ where the sale was of a future crop of turnip seed at a guinea a bushel, and the value of the crop when produced exceeded £10. The point was not argued or mentioned by the court, but the decision has been fol- lowed in the United States."' 64 2 Barn. & C. 37. 6 5 Gilman v. Hill, 36 N. H. 318; Gault v. Browu. 48 N. H. 183; Allard v. Greasert, CI N. Y. 1. c6 Mills V. Hunt. 17 Wend. 333, 20 Wend. 431; Coffiman v. Hampton, 2 Watts & S. 377; Tompkins v. Haas, 2 Pa. St. 74; Kerr v. Shrader, 1 Wkly. Notes Cas. 33; Jenness v. Wendell, 51 N. H. C3. But separate sales of real estate are distinct contracts. Van Eps v. Schenectady, 12 Johns. 430; Rob- inson V. Ciroeu, 3 Jletc. (Mass.) 1.".!); Wells v. Day, 124 Mass. 38. 7 Bmmerson v. Heelis, 2 Taunt. 38. See, also, Rugg v. Minett. 11 East, 218, per Le Blanc, J.; Roots v. Dormer, 4 Barn. & Adol. 77; Couston v. Chap- man, L. R. 2 H. L. Sc. 250. 6 8 10 Barn. & 0. 446. 6 9 Carpenter v. Galloway, 73 Ind. 418; Bowman v. Conn, 8 Ind. 58; Brown V. Sanborn, 21 Minn. 402. dl- 23 ACCEPTANCE AND KECEIPT. 51 ACCEPTANCE AND RECEIPT. 24. In order to satisfy the exception, in case "the buyer shall accept part of the goods so sold, and actually receive the same," there must be both acceptance and actual re- ceipt. 25. Acceptance may precede, be contemporaneous with, or subsequent to, receipt, and both may be subsequent to the contract of sale. 26. A sample constitutes a "part of the goods," if it be considered by the parties as part of the bulk sold. Having considered the meaning of the words, "no contract for the sale of goods, wares, or merchandise for the price of £10 or up- wards," it remains to consider under what- circumstances such con- tracts "shall be allowed to be good." The section provides that they shall not be allowed to be good, "except (1) the buyer shall accept part of the goods so sold, and actually receive the same ; (2) or give something in earnest to bind the bargain, or in part pay- ment; (3) or that some note or memorandum in writing of the said bargain be made and signed by the parties to be charged by such contract, or tlieir ageuts thereunto lawfully authorized." '" Acceptance and Receipt. Kef erring to the first exception. Lord Blackburn says: '^ "If we seek for the meaning of the enactment, judging merely from its words, and without reference to decisions, it seems that this pro- ^'ision is not complied with, unless the two things concur: The buyer must accept, and he must actually receive part of the goods, and the contract will not be good unless he does both; and this is to be borne in mind, for, as there may be an actual receipt without an acceptance, so there may be an acceptance without any receipt. In the absence of authority, and judging merely from the ordinary meaning of language, one would say that an acceptance of part of the goods is an assent by the buyer, meant to be final, that this jpart of the goods is to be taken by him as his property under the 10 Benj. Sales, § 138 et seq. ' " Blackb. Sales, IC. 62 FORMATION OP THE CONTRACT. [Ch. 2 contract, and as so far satisfying the contract. So long as the buyer can, without self-contradiction, derlare tliat the goods are not to be taken in fulfillment of the contract, he has not accepted them. And it is immaterial whether his refusal to take the goods be reason- able or not. If he refuses the goods, assigning grounds false or frivolous, or assigning no reasons at all, it is still clear that he does not accept the goods, and the question is not whether he ought to accept, but whether he has accepted, them. The ijuestion of acceptance or not is a question as to what was the intention of the buyer, as signified by his outward acts. The receipt of part of the goods is the taking possession of them. When the seller gives to the buyer the actual control of the goods, and the buyer accepts such control, he has actually received them. Such a re- ceipt is often evidence of acceptance, but it is not the same thinu; indeed, the receipt by the buyer may be, and often is, for the ex- press purpose of seeing whether he will accept or not. If gnods of a particular description are ordered to be sent by a carrier, the buyer must in every case receive the package to see whether it ans-ft'ers his order or not. It may even be reasonable to try part of the goods by using them ; but, though this is a very actual receipt, it is no acceptance, so long as the buyer can consistently objeci to the goods as not answering his order." It is to be observed that the two questions of acceptance and receipt are frequently confused in the cases, and it has sometimes been questioned whether any distinction existed between them.'- It is clearly established, however, that they are distinct, and that both acceptance and receipt are essential.'^ Acceptance may pre- cede receipt,'* or receipt may precede acceptance,'^ and both may be subsequent to the contract of sale.'" Their effect is to prove 7 2 Castle V. Sworder, 6 Hurl. & N. S32, 30 Law J. Exch. 310, per Crompton, J., and Cockbui-n, C. J. 7 3 Smith V. Hudson, 6 Best & S. 431, .34 Law J. Q. B. 14.j; Cusack v. Robin- sou, 1 Best & S. 2'.i0, 30 Law J. Q. B. 2G1; Bill v. Banient, 9 Jlecs. & W. 30; Baldey v. Parker, 2 Barn. & C. 37; Saunders v. Topp, 4 Plxcli. 3'JO; Caulkius V. Hellman, 47 N. Y. 449; Cooke v. Millard, (J5 N. Y. 352, 307; Maxwell v. Brown, 39 Me. 98. Ti Post, p. 54. '5 Post, p. .'"..J. 70 Gault V. Brown, 48 N. H. 1S3, 188; ^IcKuight v. Dunlnp, 5 N. Y. r,37; Marsh v. Hyde, 3 Gray, 331; Bush v. Holmes, .'33 ilc. 417; Field v. Kuuk, Ch. 2] ACCEPTANCE AND RECEIPT. 53 that there was a contract, the terms of which may then be proved by parol." Acceptance and Receipt of Part — Sample. As the statute requires an acceptance and receipt simply of a part, it is immaterial how small such part is.'^ Thus acceptance and re- ceipt of a sample is sufficient, provided it be considered by the par- ties as part of the bulk sold." It is not sutficient if the sample be not so considered.^" So-, alsoj acceptance and receipt of a part is sufficient, though the rest of the goods are still unmade,^^ or though the contract embraces different kinds of goods, .only one of which is accepted and received.**^ SAME— ACCEr TAN CE. 27. Acceptance is an assent by the buyer that the goods are to be taken by him under and in performance of the contract of sale. Whether the buyer has accepted is a question of his intention, as evidenced by his -wrords and acts. In England (but not in the United States) any deal- ing with the goods which recognizes a pre-existing con- tract of sale constitutes an acceptance. 28. If the contract be for the sale of specific goods, the acceptance takes place w^hen the contract is entered into, 22 N. J. Law, 525, 530; McCarthy v. Nash, 14 Minn. 127 (Gil. 95); Ricky v. Tenbroeck, 63 Mo. 563. Acceptance can have no effect after the seller has disaffirmed. Taylor v. Wakefield, 6 El. & Bl. 765. See Washington Ice Co. V. Webster, 62 Me. 341, 361; Brand v. Focht, *42 N. Y. 409. T! Tomkinson v. Staight, 25 Law J. C. P. 85, 17 C. B. 697; Garfield v. Paris, 96 U. S. 557, 566. 7 8 Garfield v. Paris, 96 U. S. 557 (labels deliverable under a contract for liquors as part of the goods sold); Damon v. Osborn, 1 Pick. 476; Farmer v. Gray, 16 Neb. 401, 20 N. W. 276. 7 9 Hinde v. Whitehouse, 7 East, 558; Talver v. West, Holt, 178; Klinitz v. Surry, 5 Esp. 267; Gardner v. Grout, 2 C. B. (N. S.) 340; Brock v. Knower, 37 Hun, 609. so Cooper v. Elston, 7 Term E. 14; Simonds v. Fisher, cited In Gardner V. Grout, 2 C. B. (N. S.) 340; Moore v. Love, 57 Miss. 765. See Carver v. Lane, 4 E. D. Smith, ICS. 81 Scott V. Eastern Counties Ry. Co., 12 Mees. & W. 33. 82 Elliott v. Thomas, 3 Mees. & W. 170. 54 FORMATION OF THE CONTEACT. [Ch. 2 and is proved by the same evidence -wliich proves the contract. 29. CONSTRUCTIVE ACCEPTANCE— If the goods have been received by the buyer, any dealing v?ith them by him as OTvner is evidence of acceptance. Lord Blackburn adds at the close of the passage quoted on a preceding page that "on the whole the cases are pretty consistent with these suggestions and with each other, as to what forms an acceptance within the statute, though not as to the strength of the proof required to establish it." ^^ The American cases also are pretty consistent with this statement of the law, but in England, as will be seen, an artificial construction has since the passage was written been put upon "acceptance," which is quite inconsistent with the views there expressed. The nature of an acceptance can best be understood by a consideration of the circumstances under which it is held to take place. If the contract of sale is for speciiied goods, an acceptance nec- essarily takes place when the contract is entered into.^* Thus in Cusack V. Robinson,^'' where the buyer was shown a lot of 156 firkins of butter and agreed to buy the lot, and the goods were for- warded to him, it was held that there was sufficient evidence to justify the jury in finding an acceptance. Blackburn, J., said: "There was sufficient evidence that the defendant had at Liverpool selected these specific 15(i firkins of butter as those which he then agreed to take as his property as the goods sold, and that he di- rected those specific goods to be sent to London. This was" cer- tainly evidence of an acceptance."' In such cases the acceptance of course precedes the receipt. If the goods are ready for deliv- 83 Blackb. Sales, 17. 84 Cusack V. Robinson, 1 Best & S. 299, 30 Law .T. Q. B. 2G1; Bog Lead :\lin. Co. v. Montague, 10 C. B. (N. S.) 481. 489; Cross v. O'Donnell, 44 N. Y. 661; United States Reflector Co. v. Rusbton, 7 Daly, 410; Vietor v. Stroock (City Ct. N. Y.) 3 N. Y. Supp. 801; Id. (Com. PI. N. Y.) 5 N. Y. Supp. 659. See. also. Ex parte Safford, 2 Low. .^03, 56.">, Fed. Cas. No. 12,212; Knight V. Mann, 118 Mass. 143, 145; Hewes v. Jordan, 30 Md. 472, 484; Simpson v. Krumdick, 28 Minn. 352, 355, 10 N. W. 18; Langd. Cas. Sales, 1021. 85 1 Best & S. 299, 30 Law J. Q. B. 261. Ch. 2] ACCEPTANCE AND RECEIPT. 55 ery, an acceptance will readily be implied, for example, from mark- ing the goods with the name of the buyer by his consent,^' al- though such marking would not constitute an actual receipt; but, if the goods are not ready for delivery, an acceptance will not read- ily be implied.*^ If the contract of sale be for goods which are not specific when the contract is entered into, there can be no acceptance till the seller has indicated to the buyer what goods he proposes to deliver in pei'formance of the contract,*' and it seems that the buyer is then entitled to a reasonable time to examine the goods before deciding whether to accept them,"' though he may doubtless waiA^e his right of examination."" After the goods have been received by the buyer, his acceptance may be proved by any dealing with 86 Bill v. Bament, 9 Mees. & W. 3G; Hodgson v. Le Bret, 1 Camp. 233; Proctor V. Jones, 2 Car. & P. 532, per Best, C. J.; Saunders v. Topp, 4 Exch. 390, per Aldersou, B.; Benj. Sales, § 166, note y; Rappleye v. Adee, 1 Thomp. & C. 127. 8 7 Maberley v. Sheppard, 10 Bing. 99. 88 Langd. Cas. Sales, 1021. 89 Hunt V. Heclit, S Exch. 814; Nicholson v. Bower, 1 El. & El. 172 Smith V. Hudson, G Best & S. 431, 34 Law J. Q. B. 145, per Cockburn, C. J. Langd. Cas. Sales, 1021. In Morton v. Tibbett, post. Lord Campbell says "The acceptance is to be something which is to precede, or at any rate to be contemporaneous with, the actual receipt of the goods, and is not to be a subsequent act after the goods have been actually received, weighed, meas- ured, or examined." This view may be required by the artificial construc- tion put on "acceptance" by Lord Campbell and the latest English decisions. But, where the term is construed in its natural sense, the right to examine before acceptance or rejection would seem to exist of necessity. See Kent V. Huskinson, 3 Bos. & P. 233. 90 "It [acceptance] means some act done after the vendee has exercised, or had the means of exercising, his right of rejection." Hunt v. Hecht, 8 Exch. 814, 22 Law J. Exch. 293, per Martin, B. "According to Lord Camp- bell [Morton v. Tibbett, cited post], there may be an acceptance and receipt of goods by a purchaser within the statute of frauds, although he has had no opportunity of examining them, and although he has done nothing to preclude himself from objecting that they do not correspond with the contract. I agree with that. But in such case the party must have done something to waive his right to reject the goods." Per Bramwell, B., in Coombs v. Bristol & E. Ry. Co., 3 Hurl. & N. 510, 27 Law J. Exch. 401. Of course, the buyer may waive the right to examine. Currie v. Anderson, 2 El. & El. 592. 56 FORMATION OF THE CONTRACT. [Ch. 2 the goods on his part as owner,'^ for example by a resale,"^ and even by his retaining them for such time as to lead to the pre- sumption that he intended to keep them as owner." ^ And a deal- ing \Aith the goods, such as to constitute an acceptance, may take place as effectively with the bill of lading, which represents the goods, as with the goods themselves."* An acceptance implied from the conduct of the buyer is called a constructive acceptance. Whether the acts or omissions of the buyer amount to a construct- ive acceptance is a question of fact for the jury, though the ques- tion is, of course, to be determineil by tlie court, if the evidence is capable of only one construction."^ It is sometimes said that an acceptance must be established by some act of the buyer, and that mere words are not enough, but the cases in which such statements occur generally involve simply the proposition that mere words are not enough to constitute acceptance and receipt,"^ and there is on principle no reason why the acceptance may not be evidenced by 81 Beaumont v. Brengeri, 5 C. B. 301; Parker v. T\'allis, 5 El. & Bl. 21; Garfield v. I'aris, '.HI U. S. 557, M3; Vincent v. Germond, 11 .Johns. 2S2; Gray v. Davis, 10 N. Y. 285; Jones v. Reynolds, 120 N. Y. 213, 24 N. E. 2T0; Town- send V. Hargraves. 118 ilas<. ;J25, .';-".2: Ex parte Safford, 2 Low. 503, Fed. Gas. No. 12,212; Barl^alow v. I'feift'ur, ;J8 Ind. 214; Bacon v. Eccles, 43 Wis. 221, 2:_;s: Sullivan v. Sullivan, 70 Mich. 583, 38 N. TV. 472. 9= Chaplin v. Kogers, 1 East, 105; HUl v. McDonald, 17 V^'is. 100; Phillips V. Ocmulgee Mills, 55 Ga. 033; Marshall v. Ferguson, 23 Gal. GO. 93 Bushel v. Wheeler, 15 Q. B. 442; Coleman v. Gibson, 1 Moody & R. 168; Currie v. Ander.sun, 2 El. & El. 5U2; Farina v. Home, IG ilees. & W. 119; Borrowscale v. Bosworth, 00 Mass. 370; Spencer v. Hale, 30 Vt. 314; Downs v. Mansh, 20 Coun. 409; Gaff v. Homeyer, 59 Mo. 345; Hobbs v. Massasoit Whip Co., 158 Mass. 104, 33 N. E. 495. Si Currie v. Anderson, 2 El. & El. 592, 29 Law J. Q. B. 87; Meredith v. Meigh, 2 El. & Bl. :!G4, 22 Law J. Q. B. 401. See Quiutard v. Bacon, 99 Mass. 185; Rodgers v. Phillips, 40 N. Y. 510. 95 Edau V. Dudtiold. 1 Q. B. 302, per Denman, C. J.; Bushel v. Wheeler, 15 Q. B. 442, per Culeman and Williams, JJ.; Garfield v. Paris, 96 U. S. 557, 563; Hinchman v. Lincoln, 124 U. S. 38, 8 Sup. Ct. 3G9; Stone v. Browning, 68 N. Y. 508; Shepherd v. Pressey, 32 N. H. 40, 57. 9 8 Shindler v. Houston. 1 N. Y. 2r,l; Bailey v. Ogden, 3 Johns. 421; Kel- logg V. Witherhead, 6 Thonip. & C. 525; Dole v. Stimpson, 21 Pick. 384; Ed- wards V. Grand Trunk Ry. Co., 54 Me. 105; Kirby v. Johnson, 22 JIo. 354; Northrup v. Cook, 39 Mo. 208; Clark v. Labreche, 63 N. H. 397. Ch. 2] ACCEPTANCE AND RECEIPT. 57 the buyer's declarations."^ The receipt of goods by a carrier or wharfinger appointed by the buyer does not constitute an accept- ance. These agents have authority to receive, but not to accept."' Whether Acceptance must be in Performance of the Contract — In England. Beginning with the case of Morton v. Tibbett,"" a different con- struction began in England to be placed on "acceptance," and it has become established that the acceptance need not be in perform- ance of the contract, but that any dealing with the goods which recognizes a pre-existing contract of sale constitutes an accept- ance.^"' In Morton v. Tibbett, the defendant had made a verbal agreement with the plaintiff for the purchase of 50 quarters of wheat according to sample, each quarter to be of a specified weight, and the wheat M'as received on the defendant's lighter for conveyance to its destination, where it duly arrived, but in the meantime the defendant resold it on the same understanding as to weight. The wheat on arrival was rejected by the second pur- chaser for short weight, and was thereupon rejected by the de- fendant on the same ground. It was held that the defendant had accepted, and Lord Campbell, after observing that it would be open to the buyer, after acceptance of a part, "to object at all events to the quantity and quality of the residue," announced: '^We are of the opinion that * * * there may be an acceptance and receipt within the meaning of the act, without the buyer having examined the goods, or done anything to preclude him from contending that they do not correspond with the contract. The acceptance to let in parol evidence of the contract appears to us to be a different »7 Caulkins v. Hellman, 47 N. Y. 449; Shepherd v. Pressey, 32 N. H. 49, 58; Schmidt v. Thomas, 75 Wis. 529, 44 N. W. 771; Galvin v. MaeKenzie, 21 Or. 184, 27 Pac. 1039. See Stone v. Browning, 68 N. Y. 598. Acceptance is evidence by mere words, where the contract is for specific goods, supra. »8 Hanson v. Armitage, 5 Barn. & Aid. 557; Norman v. Phillips, 14 Mees. & W. 276; Hunt v. Hecht, 8 Exch. 814; Meredith v. Meigh, 2 El. & Bl. 370, 22 Law J. Q. B. 401, overruling Hart v. Sattley, 3 Camp. 528; Allerd v. Greasert, 61 N. Y. 1, 5; Jones v. Mechanics' Bank, 29 Md. 287; Johnson v. Cuttle, lOo Mass. 447; Keiwert v. Meyer, 62 Ind. 587; Grimes v. Van Vechten, 20 Mich. 410; Billin v. Henkel, 9 Colo. 394, 13 Pac. 420; Fontaine v. Bush, 40 Minn. 141, 41 N. W. 465; Spencer v. Hale, 30 Vt. 314, contra. 8 9 15 Q. B. 428, 19 Law J. Q. B. 382. 100 Chalm. Sale, 121; KeiT, Dig. Sales, § 10. 58 FORMATION OF THE CONTKACT. [Ch. 2 acceptance from that which affords excluf?ive eyidence of the con- tiact having been fulfilled. We are therefore of the opinion in this case that, although the defendant had done nothing which would have precluded him from objecting that the wheat delivered was not according to the contract, there was evidence to justify the jury in finding that the defendant accepted and received it.'' It would seem that the resale before examination was such an act of ownership as was inconsistent with the continuance of the right of property in the seller, that the defendant had thereby waived his right to reject the wheat, and that his conduct was sufficient evidence of an acceptance.'"^ I!ut the construction announced by Lord Campbell, that acceptance does not preclude rejection, has, after some dissent,'"- prevailed, and was adojilcd by the court of appeals in the recent case of Page v. Morgan,'"^ in which the natu- ral meaning of "accept" is entirely abandoned. There the buyer ex- amined the goods simply to see if they agreed with the sample, and rejected them as not equal to sample, and it was held tliat this constituted an acceptance. Brett, M. R., in giving judgment, said: ''All that is necessary is an accejitance which could not have been made except upon admission tb.at there was a contract, and the goods were sent to fulfill that contract." "I rely * ^ * on the fact that the defendant examined the goods to see if they agreed with the sample. I do not see how it is possible to come to any other conclusion with regard to that fact than that it was a dealing with the goods, involving an admission that there was a contract" 101 Benj. Sales, § 150. 102 Hunt v. Hecht, 8 Exch. S14, 22 Law J. Excli. 293; Coombs v. Bristol & E. Ry. Co., 3 Hm-l. & X. 510, 27 Law J. Exch. 401. See. also. Smith v. Hudson, 6 Best & S. 431, 34 Law J. Q. B. 145; Castle v. Sworder, 6 Hurl. & N. 882, 30 Law J. Exch. 310, per Cockburn. C. J. 103 15 Q. B. Div. 228. See, also, Cusack v. Robinson, 1 Best & S. 299, 30 Law .L Q. B. 201, per Blackburn, J.; Currie v. Anderson, 2 El. & El. 592, 20 Law J. Q. B. 87, per Crompton, J.; Kibble v. (iough, 38 Law T. (N. S.) 204; Rickard v. Moore, Id. 841. But where the buyer inspected the goods at the carrier's wharf on arrival, and wrote across the note of advice, "Re- fused, not according to representation," and 10 days later notified his re- fusal to the seller, it was held no acceptance, and Page v. >[orgau, 15 Q. B. Div. 228, was distinguished. Taylor v. Smith [1893] 2 Q. B. 65. Cll. 2] ACCEPTANCE AND RECEIPT. 59 Same — In the United States. In the United States, however, the later artificial construction of the English couits has never been adopted, and it is clearly estab- lished, in accordance vi^ith the statement of the law made by Lord Blackburn,^"* and with the earlier Englisli cases,"^ that the ac- ceptance must be in performance of the contract; that is, "there must be an assent by the buyer, meant to be final, that this part of the goods is to be taken by him as his property under the contract, and as so far satisfying the contract." "" As was observed in Phil- lips V. Ristolli,"' in a passage frequently quoted in the American cases: "There must be a delivery of the goods by the vendor with an intention of vesting the right of possession in the vendee, and there must be an actual acceptance by the latter, with an intention of taking to the possession as owner." And in the leading case of Caulkins v. Hellman, Eapallo, J., said: "Some act or conduct on the part of the vendee, or his authorized agent, manifesting an inten- tion to accept the goods as a performance of the contract, and to ap- propriate them, is required." "' This view is not inconsistent with the statement of Lord Campbell in Morton v. Tibbett that it would be open to the buyer, after acceptance of a part, to object to the quantity or quality of the residue, — a principle which is fully rec- ognized by the American cases.^"* It is enough if the part re- 10* Ante, p. 51. 105 Howe V. Palmer, 3 Bam. & Aid. 321; Hanson v. Armitage, 5 Bam. & Aid. 557; Phillips v. Bistolli, 2 Bam. & C. 511; Smith v. Surnam, 9 Bam. & C. 561; Acebal v. Levy, 10 Bing. 376; Norman v. Phillips, 14 Mees. & W. 277. 108 Caulkins v. Hellman, 47 N. Y. 449; Stone v. Browning, 51 N. Y. 211, 68 N. Y. 598; Cooke v. Millard, 65 N. Y. 352, 370; Knight v. Mann, 118 Mass. 143, 120 Mass. 219; Meehan v. Sharp, 151 Mass. 564, 24 N. E. 907; Shep- herd V. Pressey, 32 N. H. 49; Gorham v. Fisher, 30 Vt. 428; Smith v. Fisher, 59 Vt. 53, 7 Atl. 816; Hewes v. Jordan, 39 Md. 472; Bacon v. Eccles, 43 Wis. 227; Scotten v. Sutter, 37 Mich. 526; Simpson v. Krumdick, 28 Minn. 352, 354, 10 N. W. 18; Jamison v. Simon, 68 Cal. 17, 8 Pac. 502; Garfield v. Paris, 96 U. S. 567; Meyer v. Thompson, 16 Or. 194, 18 Pac. 16; Schmidt v. Thomas, 75 Wis. 529, 44 N. W. 771. 107 2 Barn. & C. 511. 108 47 N. Y. 449. 109 Garfield v. Paris, 96 U. S. 557, 562; Hewes v. Jordan, 39 Md. 472, 483. In Remick v. Sandford, 120 Mass. 309, 316, it is said by Devens, J., that "if GO FORMATION OF THE CONTRACT. [Ch. 2 ceived is accepted as a partial fulfillment of tke contract. It must, however, distinctly appear that the goods were accepted under the contract.^^" This was strongly illustrated in Atherton v. New- hall, ^^^ where a small part of the goods was delivered by an ex- pressman, and the buyer, having learned that the rest of the goods had been destroyed by fire, at once notified the seller that he would pay only for the part received. It was held that there was no acceptance. Gray, C, J., said: "The acceptance by the buyer of the part brought by the expressman was not a sufficient accept- ance to take the sale of the whole out of the statute, because it appears that it was not with the intention to perform the whole contract, and to assert the buyer's ownership under it, but, on the contrary, that he immediately informed the seller's clerk that he would be responsible only for the part received." SAME— ACTUAL RECEIPT. 30. Actual receipt is the taking possession of the goods by the buyer with the seller's consent. It implies such a transfer of possession as to divest the seller's lien, and may be effected: (a) By the actual delivery of the goods by the seller to the buyer or to his agent; or (b) By agreement. 31. BY AGREEMENT— An actual receipt takes place by agreement: (a) When the goods are in the actual possession of the seller, if he becomes bailee of the goods for the buyer. the buyer accepts the goods as those which he purchased he may afterwards reject them If they are not what they were warranted to be, but the statute is satisfied." Ttiis, however, must rest on tlie rule peculiar to ilassachusetts, and some other states, that the buyer may avoid the sale for breach of war- ranty. See post, p. 244. 110 Davis V. Eastman, 1 Allen, 422; Townsend v. Hargraves, 118 Mass. 325; Atherton v. Newhall, 123 Mass. 141; Van Woert v. Albany & S. R. Co., C7 N. Y. 538; Matthiessen & W. Refining Co. v. McMahon, 38 N. J. Law, 538. 111 123 Mass. 141. Ch. 2] ACCEPTANCE AND RECEIPT. 61 (b) "When the goods are in the custody of a third person as bailee of the seller, if such third person, -writh the consent of the seller, be- comes bailee of the buyer. (c) When the goods are in the custody of the buy- er, as bailee of the seller, if with the consent of the seller he ceases to hold them as bailee, and holds them as o-wner. Where accept.ance is shown, a very liberal construction is placed on actual receipt.^ ^- The simplest way in which a transfer of pos- session may be effected is by the removal of the goods by the buyer or his agent.^^^ Receipt, however, implies delivery,^^* and the receipt must be with the seller's consent, and with the intention on his part of transferring possession to the buyer as owner. The test for determining whether there has been such a transfer of possession is whether the seller has parted with his lien.^^^ If the goods are to be forwarded to the buyer, the time when the possession is trans- ferred depends on the character of the person by whom the goods are carried. If they are carried by the seller's servant or agent, there is, of course, no transfer of possession so long as they remain in his hands.^^^ If they are forwarded by a carrier designated by the buyer, an actual receipt takes place when they are delivered to him for carriage.^^^ And, where goods are forwarded by a common ear- ns Chalm. Sale, 121. 113 Blackb. Sales, 25; Benj. Sales, § 180; Rodgers v. Jones, 129 Mass. 420, 422. 114 Saunders v. Topp, 4 Exch. 390, per Parke, B. 115 Phillips v. BistoUi, 2 Bam. & C. 511; Baldey v. Parker, Id. 37, perHolroyd, J.; Bill V. Bament, 9 Mees. & W. 37; Cusack v. Robinson, 30 Law J. Q. B. 264, 1 Best. & S. 299; Castle v. Sworder, 29 Law J. Exch. 235, 30 Law J. Exch. 310, 6 Hurl. & N. 832; Safford v. McDonough, 120 Mass. 290; Rodgers V. Jones, 129 Mass. 420; Ex parte Safford, 2 Low. 563, Fed. Gas. No. 12,- 212; Green v. Merriam, 28 Vt. 801; Marsh v. Rouse, 44 N. Y. 643; Stone v. Browning, 51 N. Y. 211; Maxwell v. Brown, 39 Me. 98, 103; Gardet v. Bel- knap, 1 Cal. 399; Hinchman v. Lincoln, 124 U. S. 38, 8 Sup. Ct. 369; post, p. 210. 116 Grey v. Gary, 9 Daly, 363; Agnew v. Dumas, 64 Vt. 147, 23 Atl. 634. 117 Bullock V. Tschergi, 4 McCrary, 184, 13 Fed. 345; Cross v. O'Donnell, 44 N. Y. 661; Wilcox Silver Plate Co. v. Green, 72 N. Y. 17. See, also, cases cited ante, p. 57, note 98, and post, p. 195. 62 FORMATION OF THE CONTRACT. [Ch. 2 rier, the carrier is, in the absence of special agreement, regarded as the agent of the buyer, and the result is the same as if the carrier were specially designated by him.^^^ The seller may, however, preserve his lien by reserving to himself the jus disponendi, as by taking from the carrier a bill of lading to his own order, and in such a case deliver^' to the carrier does not constitute an actual receipt."" Actual Receipt by Agreement. Tlie possession of the goods may, however, be transferred and an actual receipt take place, by agreement, without the physical de- livery of the goods. Same — mien Goods (Are ia Possession of Seller. If the goods are in the possession of the seller at the time of the contract, an actual roceipt takes place if the parties agree that the seller shall cease to hold as owuer, and shall assume the (.-haracter of bailee or agent of the buyer in respect to the custody of the goods,- the possession of the seller being by the agreement converted into the possession of the buyer."" A leading case on this point is Elmore v. Stone,"^ wlicre the buyer of horses left them with the seller at livery. It was held that as soon as the seller consented to keep them at livery his possession was changed, and that from that time he lield, not as owner, but as any other liveryman might do- Hut an agieeiueut to hold in this changed character will not readily he presuiiied, and it must distinctly appear that the seller has Law .T. Exch. 23.-., 3o Law J. Exch. 310, C Hurl. & X. 832; Cusack v. linb- ins(ju, 1 Bu^t & S. 2'.:iii, per Blackburn, J.; Green v. Merrlam, 28 Vt. 801; Means v. "Williamson, 37 Me. 5.j0; Ex parte Safford, 2 Low. 563, Fed. Cas. No. 12,212; .Janvrin v. Maxwell, 23 Wis. 51; Rodgers v. Jones, 1211 Mass. 420, 422; Safford v. McDonough, 120 Mass. 200, 201; Webster v. Anderson, 42 .Mich. 554, 4 N. W. 288. Tost, p. 180. i-'i 1 Taunt. 458. 1^2 Tempest v. Fitzgerald, 3 Barn. & Aid. 680; Carter v. Toussaint, 5 Bani. & Aid. 855; Holmes v. Ilr skins Exch. 7.53. See Blaclib. Sales, 20; Jiijst, p. 210. Ch. 2] ACCEPTANCE AND BECEIPT. 63 and that some act is necessary to establish the changed character of the ownership; ^^^ but on principle it would seem that the only question is whether the agreement is distinctly established.^^* Same — When Goods are in Possession of Third Person. If the goods at the time of the contract are in the custody of a third person as bailee, an actual receipt takes place when the buyer, the seller, and the bailee agree that the latter shall cease to hold for the seller, and shall hold for the buyer, or, as is sometimes said, when the bailee, with the seller's consent, attorns to the buyer.^^^ The possession of the agent being, in contemplation of law, the possession of the principal, a transfer of possession is thus effected by simply constituting the custodian the agent of the buyer. The consent of all parties is, of course, essential, and therefore an order from the seller to a warehouseman, wharfinger, carrier, or other bailee to deliver the goods to the buyer will be inoperative to transfer the possession, unless the bailee attorns.^^" 123 Matthiessen & W. Kefining Co. v. McMahon, 38 N. J. Law, 536; Kirby V. Johnson, 22 Mo. 354; Bowers v. Anderson, 49 Ga. 143; Malone v. Plato, 22 Cal. 103. It is said in Shindler v. Houston, 1 N. Y. 261, and some other cases (ante, p. 56), that mere words cannot constitute acceptance and receipt, and that superadded to the language of the contract there must be some acts of the parties amounting to a change of possession. See, also, Bailey v. Ogden, 3 Johns. 399; Ely v. Ormsby, 12 Barb.' 570; Hallenbeck v. Cochran, 20 Hun, 416. In those cases there \yas nothing to show a change of posses- sion from that of owner to that of bailee. But in Rappleye v. Adee, 65 Barb. 589, where the sheep sold were separated from the rest of the seller's flock, the buyer's mark put upon them, and the parties agreed to let them run with the seller's sheep for a few days, it was held that the evidence warranted the jury in finding delivery and acceptance, and that the rule of Shindler v. Houston was properly applied. See, also, Wylie v. Kelly, 41 Barb. 594. i24Benj. Sales, § 182. 125 Bentall v. Burn, 3 Barn. & C. 423; Farina v. Home, 16 Mees. & W. 119; Simmonds v. Humble, 13 C. B. (N. S.) 2.jS; Townsend v. Hargraves, 118 Mass. 325, 332; Bassett v. Camp, 54 Vt. 232; post, p. 210. 128 Cases cited in note 125, supra. But where the goods were in a United States bonded warehouse, and the duties were unpaid, it was held that an at- tornment by the warehouseman could have no effect to change the posses- sion, since the goods were in possession of the United States, and the ware- houseman was not the bailee of the seller. In re Clifford, 2 Sawy. 428, Fed. Cas. No. 2,893. 61 FORMATION OF THE CONTRACT. [Ch. 2 If, however, the goods are on the premises of a third person, who is not bailee, as timber lying at the disposal of the seller on land of a person from whom he bought it, or at a public wharf, it seems that possession may be transferred by the mere agreement of the buyer and seller.'^' Same — When Goods are in Possession of Buyer. If the goods, at the time of tlie contract, are already in the posses- sion of the buj'er, an actual receipt takes place when the parties agree that the latter shall cease to hold them as bailee, and shall hold them as owner.^^* Thus, in Lillywhite v. Devereux,^^" it is said that if the buyer, under such circumstances, deals with the goods in a manner inconsistent with the supposition that his former possession remains unchanged, he may he said to have ac- cepted and actually received them; the court apparently taking the view that the consent of the seUer to the transfer of possession was given by entering into the contract, and that the same acts on the part of the seller which were evidence of an acceptance were also evidence that he had begun to hold in the character of owner. EARNEST OR PART PAYMENT. 32. Earnest is something of value, not forming part of the price given, and received to mark the final assent of the parties to the bargain. 33. Part payment may be made at or subsequently to the time of the contract of sale, either in raoney or any- 127 Tansley v. Turner, 2 Bing. N. C. 151; Cooper v. Bill, 3 Hurl. & C. 722; Marshall v. Green, 1 C. P. Div. 35, per Grove, J.; Leonard v. Davis, 1 Black, 476; Thompson v. Baltimore & O. R. Co., 28 Md. 396; Brewster v. Leitli, 1 Minn. 56 (Gil. 40); Laugd. Gas. Sak's, 1023; Benj. Sales, •§ 17S. So of logs floating in the river. Post, p. 180 128 Edan v. Dudfleld, 1 Q. B. 306; Lillywhite v. Devereux, 15 Mees. & W. 28."); Snider v. Thrall, 56 Wis. 674, 14 N. AV. S14; Langd. Cas. Sales, 1023; Benj. Sales, § 173; Cf. Jlarkham v. Jaudon, 41 N. Y. 235, 242; Brown v. War- ren, 43 N. H. 430; Dorsey v. Pike, 00 Hun, 534, 3 N. Y. Supp. 730. Post, p. 210. 12 15 Mees. & W. 285. Ch. 2] EARNEST OB PAET PAYMENT. 65 thing of value, or by the actual extinguishment of an ex- isting indebtedness by means of an agreement independent of the contract of sale. Earnest. The giving of earnest was formerly a prevalent custom in Eng- land, but it has fallen so much into disuse that the provision in respect to it is of little practical importance. Earnest may be money or some gift or token given ^^^ by the buyer to the seller to mark the final assent of both to the bargain.^" It follows that earnest and part payment are distinct.^^^ In a Massachusetts case/^" how- ever, it was said that earnest is regarded as part payment of the price, — a dictum which was hardly necessary to support the de- cision that money deposited with a third person by the parties, to be paid to either as a forfeiture if the other should neglect to fulfil his part of the contract, was not given in earnest. The thing must have some value, and on this ground a note given by the buyer for the price, and void for want of consideration, could not be re- garded as given in earnest.^^* Part Payment. The part payment, like the acceptance and receipt, may be sub- sequent to the contract of sale,^^= unless, as in some states, the stat- ute expressly provides that it must be at the time of the contract.^^" The payment must, of course, be accepted. ^^' 130 Where the buyer drew a shilling across the seller's hand, which was called "striking a bargain," but kept the coin, the statute was not satisfied. Blenkinsop v. Clayton, 7 Taunt. 597. 131 Brae. 1, 2, c. 27. 132 Benj. Sales, § 189; Kerr, Dig. Sale, § 16; Howe v. Smith, 27 Ch. Div. 89, 101, per Fry, L. J. 13 3 Howe V. Hay ward, 108 Mass. 54. See, also, Noakes v. Morey, 30 Ind. 103. 134 Krohn v. Bantz, 68 Ind. 277. 13 5 Walker v. Nussey, 16 Mees. & W. 302, per Parke, B.; Thompson v. Alger, 12 Mete. (JIass.) 428, 435; Marsh v. Hyde, 3 Gray, 331. 13 6 Hunter v. Wetsell, 57 N. Y. 375, 84 N. Y. 549; Jackson v. Tupper, 101 N. Y. 515, 5 N. E. 65; Bates v. Cheesbro, 32 Wis. 594; Kerkhof v. Atlas Pa- per Co., 68 Wis. 674, 32 N. W. 766. 137 Bdgerton v. Hodge, 41 Vt. G76. SALES— 5 66 FORMATION OF THE CONTItACT. [Oil. 2 Payment need not be in money, but may be by means of any- thing of value which by mutual agreement is given by the buyer, and accepted by the seller, on account or in part satisfaction of the price.^^' Thus it would seem that the transfer of a bill or note would suffice; ^^° and, under the New York statute requiring pay- ment at the time, the delivery of a check has been held sufficient.^*" But the delivery of the buyer's note does not operate as payment.^*^ Nor does a mere agreement, forming part of the contract of sale, to set off a debt due to the buyer constitute payment. ^*^ Such an agreement, to be effective, must be by independent contract, '^^^ and many cases even hold that mere words are not sufficient, and that some act, such as the surrender or cancellation of the evidence of the indebtedness, or a receipt, is requisite.^** But, on principle, any independent verbal agreement, whereby the indebtedness is ex- tinguished, would seem to be sufficient.^*' THE NOTE OR MEMORANDUM. 34. The note or memorandum must state: (a) The names or descriptions of the parties in their respective capacities as seller and buyer. 138 wiiite V. Drew, 5G How. Pr. '">. Surrender of note of seller held by buyer. Sharp v. Carroll, 66 Wis. 02, 27 N. W. .S'!2; Weir v. Huduut, 115 Ind. .52.5, is N. E. 24; Benj. Sales, § l'J4. 130 cbamberlyn v. D(;larive, 2 \Mls. 353; Kearslake v. Morgan, 5 Term R. 513-; Griffiths v. Owen, ll! ilees. & W. 58. 1*0 Hunter v. Welscll, S4 X. Y. 54;_>. 141 Krohn v. Bantz, (IN Ind. 277; Combs v. Bateman, 10 Barb. 573; Hooker V. Knab, 26 Wis. 511. 142 Walker v. Nussey, 16 Meos. & W. 302; Artcher v. Zeh, 5 Hill, 200; Mattice V. Allen, *42 N. Y. 4!j:j; Pitney v. Glen's Falls Ins. Co., 05 N. Y. 6; Matthiesscn & W. Refining Co. v. McMahon's Adm'r, 38 N. J. Law, .536. 143 Walker v. Nussey, 16 Mees. & W. 302. per Parke, B.; Norwegian Plow Go. v. Hanthom, 71 Wis. 529, 37 N. W. 825. 144 See Artcher v. Zeh, Mattice v. Allen, Pitney v. Glen's Falls Ins. Co., Matthiessen & W. Refining Co. v. McMahon's Adm'r, cited in note 142. 140 Dow v. Worthen, 37 Vt. 108. An agreement that the buyer shall pay a debt due by the seller to a third person assented to by the latter. Ootterill V. Stevens, 10 Wis. 366; Langd. Cas. Sales, 1037. d- 2] THE NOTE OR MEMORANDUM. 67 (b) The price, if agreed on. (c) The goods sold. (d) Any other material terms of the contract, ex- cept that it need not state the consideration of the promise of the party to be charged. 35. The note or memorandum may be made at any time before action brought, and may be written on sepa- rate papers, provided they are all signed by the party to be charged or his agent, or that such as are not so signed are attached to or referred to in a signed paper. 36. The note or memorandum need not be delivered to the party seeking to enforce the contract; it is sufficient if it admits the contract. Difference between Contract in Writing and Note or Memorandum. At common law, the parties to a contract may reduce it to writ- ing, or may agree upon some existing writing as containing the terms of contract, and Mhen they do so they are bound by the terms of the written contract, and are not allowed to offer proof of different or additional terms. The same rule applies to a writ- ing which they agree upon as containing part of the terms of the contract; for example, the specifications of an article to be manu- factured. In all such cases the contract, so far as it is reduced to writing, cannot, in general, be proved by any other means than by the writing. This result takes place, of course, only when the writing is by the consent of both parties agreed upon as containing their contract, in whole or in part.^*'' The statute of frauds leaves the common-law rule in respect to contracts in writing as it was before. If the contract be in writing, the writing must be proved as containing the only legal evidence of the terms of the contract, even though the statute has been satisfied by acceptance and receipt, or by earnest or part payment, and although, for lack of the signature of the party to be charged, the writing would not be sufllcient as a statutory note or memorandum.^*^ The note or memorandum differs from a contract in writing, in that under the i46Blackb. Sales, 40^2; Benj. Sales, §§ 201-206. 147 Sievewright v. Archibald, 17 Q. B. 103, per Brie, J. 68 FORMATION OF THE CONTRACT. [Ch. 2 statute any writing which contains the terms of the contract is sufficient, if it be signed by the party to be charged. A contract in writing, indeed, if signed by the party to be charged, will satisfy the statute, but a mere admission in writing of an antecedent oral contract is sufficients*^ In other words, the statute may be satis- fied in writing in two ways: By putting the contract in writing, or by furnishing evidence in writing of an oral contract^*^ A mere note or memorandum, however, unlike a contract in writing, need not be introduced in evidence at all, if the contract can be brought within the first or second exceptions, though in such a case it may still be introduced as an admission of the terms of the contract, of t\ hich it would be strong, though not conclusive, evi- denced^" Xok or Memorandum in the Nature of an Adiidsdon. The note or memorandum is in the nature of an admission of the contract by the party to be charged. Thus it may be in the form of a letter, and it is immaterial to whom the letter is addressed, — whether to a third person ^^ or to the writer's own agent.^"- The memorandum is sufficient though never delivered; ^"^ for example, if it be in the form of a resolution of a corporation sought to be charged.^'* It is even sufficient if it is in the form of a letter re- pudiating,^" but not denying, the existence of the contract.^^^ It 1*8 Sievewright v. Archibald, 17 Q. B. 103, per Patteson, J.; Saunderson V. Jackson, 2 Bos. & P. 238, per Lord Eldon; Parton v. Crofts, 33 Law J. C. P. ISO, per Erie, C. J.; Bailey v. Sweeting, 9 C. B. (N. S.) 843, 30 Law J. C. P. ].jO; Lerned v. Wannemacher, 9 Allen, 412, 416; Townsend v. Hargraves,, lis Mass. 325, 334; Bird v. Munroe, 66 Me. 337. "9 Langd. Cas. Sales, 1032. isoBlackb. Sales, 42. 151 Peabody v. Speyers, 56 N. Y. 230; Moore v. Mountcastle, 61 Mo. 424. 152 Gibson v. Holland, L. R. 1 C. P. 1, 35 Law ,T. C. P. 5; Kleeman v. Col- lins, 9 Bush, 460, 407; Lee v. Cherry, 85 Tenn. 707, 4 S. W. 835. 153 Drury v. Young, 58 Md. 540. isi.Tohuson V. Trinity Church, 11 Allen, 123; Tutts v. Plymouth Gold Min, Co., 14 Allen, 407; Argus Co. v. Mayor, etc., of Albany, 55 N. Y. 495. 156 Bailey v. Sweeting, 9 C. B. (N. S.) 843, 30 Law J. C. P. 150; VS^lkinson V. Evans, K R. 1 C. P., at page 411; Leather Cloth Co. v. Hieronimus, L. R. 10 Q. B. 140; Louisville Asphalt Varnish Co. v. Lorick, 29 S. C. 533, 8 S. E, 8; Drury v. Young, 58 Md. 546. ISO Bacon v. Eccles, 43 Wis. 227. Ch. 2] THE NOTE OR MEMORANDrM. 69 is enough if the memorandum be in existence at the time the action is brought.^ °' But the memorandum cannot be regarded as being nothing more than evidence of the contract, since it is held that its existence is a condition precedent to the right of action.^^' What the Note or Memorandum must Contain — Names of Parties. The statute itself expressly provides that the name of the party to be charged must be signed, and it has been settled by the deci- sions that the name or description of the other party must appear, since it takes two to make a bargain, and otherwise no contract is shown. The memorandum must not only contain the names or descriptions of the buyer ^^° and of the seller,"" but must show which is buyer and which is seller.^"^ A description of the par- ties, however, instead of their names, is suflicient, and parol evi- dence is admissible to identify the persons described. ^"^ Thus, when an agent signs his name without mentioning a principal, the other party may show that the contract was really made with the principal, who has chosen to describe himself by the name of his 15T See cases cited in next note. 15 8 Bill V. Bament, 9 Mees. & W. 3G. See, also, Gibson v. Holland. L. R. 1 C. P. 1, 35 Law J. C. P. 5, per Willes, J.; Lucas v. Dixon, 22 Q. B. Div. 357; Bird V. Munroe, 66 Me. 337; Phillips v. Ocmulgee Mills, 55 Ga. 633. 159 Champion v. Pliimmer, 1 Bos. & P. (N. K.) 252. See, also, Sanborn v. Flagler, 9 Allen, 474, 47(j; Williams v. Robinson, 73 Me. 186; McConnell V. Brillhart, 17 111. 3.j4; Mayer v. Adrian, 77 N. C. S3; Harvey v. Stevens, 43 Vt. 657. 160 Klinitz v. Surry, 5 Esp. 267; Vandenbergh v. Spooner, L. R. 1 Exch. 316, 35 Law J. Exch. 201; Grafton v. Cummings, 99 U. S. 100; Sherburne v. Shaw, 1 N. H. 157; McElroy v. Seery, 61 Md. 389; Mentz v. New witter, 122 N. Y. 491, 25 N. B. 1044. 161 Vandenbergh v. Spooner, L. B. 1 Exch. 316, 35 Law J. Exch. 201; Bailey V. Ogden, 3 Johns. 399; Calkins v. Falk, 1 Abb. Dec. 291; Nichols v. Johnson, 10 Conn. 192; Sanborn v. Flagler, 9 Allen, 474, 477. The requirement that the writing should show which is seller and which buyer has been relaxed in some cases, where parol evidence — for example, proof of the occupation of the parties — has been admitted to raise an inference on this point. Newell V. Radford, L. R. 3 C. P. 52, 37 Law J. C. P. 1; Salmon Falls Manuf'g Co. v. Goddard, 14 How. 446. But see dissenting opinion of Curtis, J., in the lat- ter case, and Grafton v. Cummings, 99 U. S. 100, 111. 16 2 Commins v. Scott, L. R. 20 Eq. 11; Catling v. King, 5 Ch. Div. 660; Bibb V. Allen, 149 U. S. 481, 13 Sup. Ct. 950; Jones v. Dow, 142 Mass. 130, 7 N. E. S39. 70 FORMATION OF THE CONTRACT. [Ch. 2 agent, just as it would be admissible to show his identity if he had used a feigned name."^ But the converse of the proposition does not hold true, and an agent so contracting cannot show by parol that he did not intend to bind himself, since this would be to con- tradict the memorandum. ^''^ Same — Price. The fourth section of the statute requires that "the agreement on which such action shall be brouglit, or some memorandum or note thereof, shall be in writing," M'hile the seventeenth section simply requires that "some note or memorandum in writing of the said bargain be made." A fine distinction has been drawn in some cases between "agreement" and "bar.i;ain," the cases which maintain the distinction holding that "agreement"' includes all the stipulations of the contract, and that, since the promise of one party is the consideration for the promise of the other, the memo- randum must contain both promises.^"" But it is held, even by the courts wliich hold that a memorandum under the fourth sec- iion must state the consideration, that under the seventeenth sec- tion it is enough if the memorandum contain the promise or under- taking of the party to be charged, and that it need make no ex- press reference to the promise of the other party. ^'"' And this rule is applied even where the memorandum is in the form of a mere offer, the acceptance of which is verbal,^"'' though it is diffi- 163 Ti-ueman v. Loder, 11 Adol. & E. 580; Dykers v. Townsend, 24 X. X. 57; Sanborn v. Flagler, 9 Allen, 474, 477; Gowen v. Klous, 101 Mass. 449; Briggs V. Munchon, 56 Mo. 467. 164 Higgins V. Senior, S Mees. «fc W. S34. See, also. Nash v. Towne, 5 Wall. 08'J; Chandler v. Coe, 54 N. H. 561; Coleman v. First Nat. Bank, 53 X. Y. 3SS. 165 The loading case holding that under the fourth section the memorandum must state the consideration is Wain v. AVarlters, 5 East, 10, 2 Smith, Lead. Cas. (8th Ed.) 2.'il. Many states have refused to follow it. See Packard v. Richardson, 17 Mass. 122, the leading case against the rule there decided. Benj. Sales (Corhin's 6th Am. Ed.) § 232, and note; Id. § 248. 166 Egerton v. Mathews, East, 307; Sari v. Bourdillon, 1 C. B. i,X. S.) 188; Smith v. Ide, 3 Yt. 200; Williams v. Robinson, 73 Me. 186; Ken-, Dig. Sale, § 18; Langd. Cas. Sales, 1032. In some states there is an express pro- vision either that the consideration must, or that it need not, be stated. See Browne, St. Frauds, §§ 376, 377. 16' Warner v. Willington, 3 Drew, 523, 25 Law J. Ch. 662; Reuss v. Picks- Ch. 2] THE NOTE OR MEMORANDUM. 71 cult to comprehend how a writing can be called a "memorandum'' of a bargain when the bargain was not yet made at the time the writing was signed.^"^ But the price constitutes a material part of the bargain, and must be stated; ^^^ though if the price be not agreed upon, but is implied, a memorandum which states no price is sufficient.^'" Same — Subject- Matter and Other Terms. The memorandum must designate the goods sold,"^ and all the other terms and conditions of the contract, so far as to enable the court to ascertain what they were."- But parol evidence is ad- missible, as in the case of other writings, to identify the subject- ley, L. R. 1 Exch. 342, 35 Law J. Exch. 218; Sanborn v. Flagler, 9 Allen, 474; .Tustlce V. Lang, 42 N. Y. 403; Farwell v. Lowther, 18 111. 252; Gradle v. Warner, 140 111. 123, 29 N. E. 1118. IS 8 See Watts v. Alnsworth, 1 Hurl. & C. 83, 31 Law J. Exch. 448, per Brannvell, B.; Banks v. Chas. P. Harris Manuf'g Co., 20 Fed. 007. 160 Elmore v. Kingscote, 5 Barn. & C. 583; Acebal v. Levy, 10 Bing. 370; Goodman v. Griffiths, 1 Hurl. & N. 574, 26 Law J. Exch. 145; Ide v. Stanton, 15 Vt. 685; Ashcroft v. Butterworth, 136 Mass. 511; James v. Muir, 33 Mich. 223; Stone v. Browning, 08 N. Y. 598; Phelps v. Stillings, 60 N. H. 50.-,; Hanson v. Marsh, 40 Minn. 1, 40 N. W. 841. Contra, O'Xeil v. Grain, 07 Mo. 2.50. If the price is to be determined in a manner agreed upon, a mem- orandum stating the agreement on this point is sufficient. Atwood v. Cobb, 16 Pick. 227; Argus Co. v. Mayor, etc., of Albany, 55 N. Y. 495; Norton v. Gale, 95 111. 533. 170 Hoadly v. M'Laine, 10 Bing. 482; Ashcroft v. Morrin, 4 Man. & G. 450; Benj. Sales, § 249. I'l Thornton v. Kempster, 5 Taunt. 786; AVaterman v. Meigs, 4 Cush. 497; May V. Ward, 134 Mass. 127; Johnson v. Delbridge, 35 Mich. 436. "2 McLean v. Nicoll, 7 Jur. (N. S.) 999; Pitts v. Beckett, 13 Mees. & W. 743; Archer v. Baynes, 5 Exch. 025; Coddington v. Goddard, 10 Gray, 436, 4-12; Hiley v. Farnsworth, 116 Mass. 223 (a memorandum containing a clause that the vendor shall "fulfill the conditions of sale," but not setting forth the conditions, is defective); Callanan v. Chapin, 158 Mass. 113, 32 N. E. 941; Williams v. Robinson, 73 Me. 186; Stone v. Browning, 68 N. Y. 598; .John- son V. Buck, 35 N. J. Law, 338, 343; James v. Muir, 33 Mich. 223; Norris V. Blair, 39 Ind. 90; Reid v. Kentworthy, 25 Kan. 701. Terms of payment: Davis v. Shields, 26 Wend. 341; Wright v. Weeks, 25 N. Y. 153; O'Donnell V. Leeman, 43 Me. 158. Time of delivery, if agreed: Kriete v. Myer, 61 Md. 558; Smith v. Shell, 82 Mo. 215; Hawkins v. Chase, 19 Pick. 502 (other- wise, if not agreed, since it will be presumed to be on demand). 72 FORMATION OF THE CONTRACT. [Cll. 2 matter,"' to show the situation of the parties and the circum- stances, and to explain the meaning of words and latent ambigui- ties."* Parol Evidence to Show that the Writing is not a Note or Memorandum. Since the note or memorandum implies the existence of a parol contract, it may be shown, for the purpose of proving the insuffi- ciency of the memorandum, that it is not the record of any parol contract; either that no contract in fact existed,^" or that the actual contract A\'as different from that evidenced by the memo- randum, — for example, that it omitted a material term.^'" As was said by Lord Selborne, the statute of frauds "is a weapon of de- fense, and not offense, and does not make any signed instrument a valid contract by reason of the signature, if it is not such according to the good faith and real intenticn of the parties." ^" Parol Eddence as to Subsequent Agreement to Modify Origmal Contract. At common law a written contract, not under seal, may be waived, annulled, changed, or qualified by means of a subsequent parol contract, written or unwritten. But this rule is not applica- 17 3 JIacclonald v. Longbottom, 28 Law J. Q. B. 203, on appeal 1 EI. & El. 977, 29 Law J. Q. B. 2r,i; ("your wool"); Barry v. Coorobe, 1 Pet. 040; Tall- man v. Franklin, 14 N. Y. 584; Jlead v. Parker, 115 Mass. 413. 1" Salmon Falls Manuf g Co. v. Goddard, 14 How. 446; Benj. Sales, §§ 213-215. In Doherty v. Hill, 144 Mass. 405, 11 N. B. 581, it was held that, under the fourth section, a memoramlum describing equally two pieces of real estate could not be supplemented by introducing a letter from the owner to the agent, showing which estate he had authority to sell, nor by evidence that the purchaser only knew of one estate owned by the seller. There are few cases involving the description under the seventeenth section, and those under the fourth section are conflicting. See Wood, St. Frauds, § 353; Williston, Cas. Sales, p. !)'.i4, note. 17 5 Hussey v. Horne-Payne, 4 App. Cas. 315, per Lord Cairns, at page 320. 176 Pitts V. Beckett, 13 Mees. & W. 743 (that the wool sold should be dryi; McMullen v. Helberg, 4 L. R. Ir. 94, C L. R. Ir. 463 (that the sale was by sample); McLean v. Nicoll, 7 .lur. (N. S.) 909 (that glass should be of best quality); Peltier v. Collins, 3 Wend. 450 (warranty); Boardman v. Spooner, 13 Allen, 3.53 (that the goods are to be subject to approval); Remick v. Sand- ford, 118 Mass. 102 (that sale was by sample). See, also, Jenness v. Mt. Hope Iron Co., 53 Me. 20; Lang v. Henry, 54 N. H. 57; Frank v. Miller, 38 Md. 450; Lee v. Hills, GO Ind. 474, and see note 27 ante. 177 Hussey v. Horne-Payne, 4 App. Cas. 311, 323. Ch. 2] THE NOTE OR MEMORANDUM. 73 ble to a contract which has been satisfied by a statutory note or memorandum. If the original contract be thus satisfied, a subse- quent contract, not evidenced by a sufQcient note or memoran- dum, to modify the original contract, is invalid."* The subse- quent contract being invalid, the original contract may be en- forced.^'" But whether parol evidence is admissible to prove a sub- sequent contract for a waiver or abandonment of the entire con- tract is an open question.^*" Parol evidence is admissible, however, to prove substantial performance when the performance is com- pleted and accepted, and such performance is a defense by way of accord and satisfaction.^^^ Separate Papers. It is immaterial whether the note or memorandum be written at one time, or at different times, and it may consist of any number of letters, telegrams, or other pieces of paper. If the connection between the papers be physical, it is enough if they were attached at the time of signature, and this may be shown by parol.^*^ If they were never attached, the signed paper must make such a ref- erence to the other as to enable the court to construe the whole together, as containing all the terms of the bargain.^** If they are 178 stead V. Dawber, 10 Adol. & E. 57, overruling CufC v. Penn, 1 Maule & S. 21; Marshall v. Lynn, 6 Mees. & W. 109; Swain v. Seamens, 9 Wall. 254. 269; Ladd v. King, 1 R. I. 224; Dana v. Hancock, 30 Vt. G16; Blood v. Good- rich, 9 Wend. 68; Hill v. Blake, 97 N. Y. 216; Carpenter v. Galloway, 73 Ind. 418. Contra: Cummings v. Arnold, 3 Mete. (Mass.) 486; Stearns v. Hall, 9 Cush. 31; Whittier v. Dana, 10 Allen, 326; Negley v. JefCers, 28 Ohio St. 90. See, also, Richardson v. Cooper, 25 Me. 450. 17 9 Moore v. Campbell, 10 Exch. 323, 23 Law J. Exch. 310; Noble v. Ward, L. R. 1 Exch. 117, 35 Law J. Exch. 81. 18 Goss V. Lord Nugent, 5 Barn. & Adol. 65, per Denman, C. J.; Harvey V. Graham, 5 Adol. & E. 61, 73. The affirmative was held in Buel v. Bliller, 4 N. H. 196. 181 Moore v. Campbell, 10 Exch. 323, per Parke, B.; Leather Cloth Co. v. Hieronimus, L. R. 10 Q. B. 140; Long v. Hartwell, 34 N. J. Law, 116, 127; Ladd V. King, 1 R. I. 224, 231; Swain v. Seamens, 9 Wall. 254; Langd. Cas. Sales, 1034 182 Ken worthy v. Schofleld, 2 Barn. & C. 945, per Holroyd, J. 183 Saunderson v. Jackson, 2 Bos. & P. 238; .Tackson v. Lowe, 1 Bing. 9; Salmon Falls Manuf'g Co. v. Goddard, 20 Curt. Dec. 376; 14 How. 446; Newton v. Bronson, 13 N. X. 587; E'lsher v. Kuhn, 54 Miss. 480; Olson v. 74 FORMATION OF THE CONTRACT. [Ch. 2 not connected by attachment or reference, they cannot be con- nected by parol.^" Parol evidence is, however, admissible to ex- plain an ambiguous reference, and to identify the document to which the signed pajier refers. ^^'^ Papers connected by reference must be consistent, for otherwise it would be impossible to deter- mine what the bargain «'as without parol evidence to show which stated it correctly.^'" The momorauduia may be in pencil.'-^' SAME— SIGNATURE OF THE PARTY. 37. Only the signature of the party against whom the contract is sought to be enforced is required. Sharpless (Minn.) .55 N. W. 125; Ryan v. V. S., 130 U. S. OS. 10 Sup, Ct. 913; Bayne v. WiKcins, 130 U. S. 210, 11 Sup. Ct. .521. But if all the separate pa- pers are signed, reference in the one to the other need not be made, if by inspection and comparison it appears that thoy severally form part of the same transaction. Thayer v. Luce, 22 Ohio St. (j2. The paper referred to need not be in existence when the signed paper is executed. Freeland v. Ritz, 151 Mass. 257, 28 N. E. 226. i84Hinde v, Whitehouse, 7 East, 558; Kenworthy v. Schofleld, 2 Barn. & C. 015; Pierce v. Corf, L. R. 9 Q. B. 210; Boydell v. Drummond, 11 East. 142; Johnson v. Buck, o5 N. J. Law, o:j8; O'Donnell v. Eeeman, 43 Me, 158; Morton v. Dean, 13 Mete. (Mass.) 385; Coe v. Tough, 110 X. Y. 273, 22 N, E. 550; Frank v. Miller, 38 Md. 4.50; Brown v. Whipple, 58 N. H. 229; North V. Jlendel, 73 Ga, 400. But in Lerned v. Wannemacher, 9 Allen, 412, it was held that, when a memorandum is drawn up in duplicate, one signed by the seller and the other by the buyer, they may be read together as if signed by both. See, also, Rhoades y, (.'astner, 12 Allen, 130. In Ridgway V. Ingram, 50 Ind. 145, where the memorandum was indorsed on an order of sale, but, without referring to it, the court held that there was no con- nection. Followed in Wilstach v. Heyd, 122 Ind. 574, 23 N. E. 963. 185 Ridgway v. Wharton, 6 H. L. Cas. 2:S8 (instructions); Baumann v. James, 3 Ch. xVpp. .508 ("terms agreed upon"); Long v. Millar, 4 C. P.'Div. 4.50 ("purchase"); Cave v. Hastings, 7 Q. B. Div. 125 ("our arrangement"); Beckwith v. Talbot, 05 U. S. 289 (but see Grafton v. Cummings, 99 U. S. 100, 112). An extreme application of the rule admitting parol evidence was made in Louisville Asphalt Varnish Co. v. Lorick, 20 S. C. 533, 8 S. E. 8. The late case of Oliver v. Hunting, 44 Ch. Div. 205, seems lireconcilable with the earlier decisions. ISO Smith V. Surman, 9 Barn. & C. 561; Thornton v. Kempster, 5 Tauut. 7SG. Calkins v. Falk, 1 Abb. Dec. 291; Phippen v. Hyland, 19 U. G. C. P. 416. 187 Clason's Ex'rs v. Bailey, 14 Johns. 484; Merritt v. Clason, 12 Johns. 102. Ch- 2] THE NOTE OR MEMORANDUM. 75 38. The signature may be by mark or initials, and may be written in pencil. Unless the statute requires the name to be "subscribed," the signature may be printed, and may be at the beginning or in the body of the document. Although the seventeenth section requires the writing to be signed by the "parties" ^^^ to be charged, the memorandum is sufficient if signed only by the party against whom the contract is sought to be enforced.^*"* It follows that the contract is good or not at the option of the party who has not signed. The signature may be by mark,"" though not by mere descrip- tion,"i or may be by initials, if they are intended as a signature."^ It may be writteninpencil; '^^ oritmaybeprinted,providedthere is suf- ficient evidence of the adoption of the printed name, as where the sel- ler fills out and gives the buyer a bill of parcels, with the name of the seller printed thereon."* Some statutes require the name to be "sub- 188 The language of tlie fourth section is "by the party to be charged." 189 Allen v. Bennet, 3 Taunt. 169; Thornton v. Kempster, 5 Taunt. 786 Clason's Ex'rs v. Bailey, 14 Johns. 484; McCrea v. Purmort, 16 Wend. 460 Justice V. Lang, 42 X. Y. 493; Old Colony R. R. v. Evans, 6 Gray, 2.j. 31 Williams v. Robinson, 73 Me. 186; Hodges v. Kowing, 58 Conn. 12, 18 Atl. 979; Easton v. Montgomery, 90 Cal. 307, 27 Pac. 280; Cunningham v. Wil- liams, 43 Mo. App. 629. See, also, Reuss v. Picksley, L. R. 1 Exch. 342. and other cases cited In note 167, ante, which hold that a written offer ac- cepted by parol is a sufficient memorandum. Contra, Wilkinson v. Heav- enrich, 58 Mich. 574, 26 N. W. 139. 190 Baker v. Dening, 8 Adol. & E. 94 (under fifth section). See, also, Zach- arie v. Franklin, 12 Pet. 151. i»i A letter by a mother to her son, beginning, "My dear Robert," and ending, "Your affectionate mother," with a full direction containing the son's name and address, is not sufliciently signed. Selby v. Selby, 3 Mer. 2. 192 Sanborn v. Flagler, 9 Allen, 474; Salmon Falls Manuf'g Co. v. Goddard, 14 How. 446. See Palmer v. Stephens, 1 Denio, 471; Benj. Sales, § 257. The omission of a middle name is immaterial. Fessenden v. Mussey, 11 Cush. 127. 193 Merritt v. Clason, 12 Johns. 102; Clason's Ex'rs v. Bailey, 14 Johns. 484. 194 Saunderson v. Jackson, 2 Bos. & P. 238; Schneider v. Norris, 2 Maule & S. 286; Drury v. Young, 58 Md. 546; Com. v. Ray, 3 Gray, 441, 447. Oth- erwise where the statute requires the name to be "subscribed." Viele v. Os- good, 8 Barb. 130. 76 FORMATION OF THE CONTRACT. [Oh. 2 scribed," and under them the signature must be at the end.^°° I'lidcr the original enactnu-ut, however, and generally in the ab- sence of express provisions requiring a different construction, the signature is good, though it be at the beginning or in the body of the document; but, if the name is put in an unusual place, it is a question of fact whether it was so written for the purpose of au- thenticating the document/^" As was said by Lord Westbury, in a case^''^ under the fourth section, where it was held that the name, which occurred in the body of the instrument, referred only to the particular part in which it was found, and was insufficient: "The signature must be so placed as to show that it was intended to relate and refer to, and that in fact it does relate and refer to, every part of the instrument." SAME— AGENTS AUTHORIZED TO SIGN. 39. The authority of an agent to sign the memorandum may be conferred by parol, and may be proved by subse- quent ratification. 40. The agent must be a third person, and not one of the parties; but a person -who acts as the agent of one party in making the contract may act as the agent of both parties in making the memorandum. The statute simply provides that the note or memorandum shall be signed by the parties to be charged, "or their agents thereunto 106 Davis V. Shields, 20 Woiiil. 341; James v. Patten, C N. Y. 0; Doughty V. INtanhattan Brass Co., 101 N. Y. G44, 4 N. E. 747. loo .Tohnson v. Dodgsoii, 2 Jlrus. & A\'. 0.50; Durrell v. Evans, 1 Hurl. & G. 174, 31 Law J. Exch. 337; Clason's Ex'rs v. Bailey, 14 Johns. 484; Hawkins V. Chase, 19 Pick. 502; Penniman v. Hartshorn, 13 JIass. ST; Codiiington v. Goddard, 10 Gray, 430; Batturs v. Sellers, 'j Har. & J. 117; l>rnry v. Young, nS Md. 540; Anderson v. Harold, 10 Ohio, 400; McConnell v. Brillhart, 17 111. 354; Tingley v. Bellingham Bay Boom Co., 5 Wash. 044, 32 Pac. 737, and 33 I'ac. 1055. Defendants' rlcrl; liy tlieir authority drew up a leller addressed to them, containing the terms on which plaintiff was to serve them, which plaintilt signed. Held, that the letter was a sufficient memorandum to bind defendants. Evans v. Hoare [lSlt2] 1 Q. B. .503. See, also, Smith v. Howell, 11 N. J. Eq. 349; Adams v. IHeld, 21 Vt. 250. i»i Oaton V. Caton, L. U. 2 H. L. 127. Ch. 2] THE NOTE OE MEMOKANDUM. 77 lawfully authorized." The manner in which their agents may be authorized is left to the rules of the common law. Thus the agent need not be authorized in writing, and subsequent ratification is equivalent to prior appointment.^"* And, as we have seen, it is im- material whether the agent sign his own name or that of his prin- cipal.^ "' Authority to contract implies authority to sign the mem- orandum, and the memorandum may be made subsequently to the contract, if the authority has not been revoked.^"" Who May be Agent to Sign. The agent to sign must be a third person, and not the other party to the contract.^"^ This rule does not, however, exclude the agent of the seller from acting as the agent of buyer,^"^ but such agency must be clearly proved. For example, the mere fact that the sel- ler's salesman signs his own name to the memorandum at the re- quest of the buyer is not proof of agency to sign the buyer's name.^"^ The auctioneer at a public sale is the agent of the buyer as well as of the seller to sign the memorandum.^"* "The technical groundis," 18 8 Maclean v. Dunn, 4 Bing. 722; Soames v. Spencer, 1 Dowl. & R. 32; Hawkins v. Cliase, 19 Pick. 502, 505; Batturs v. Sellers, 5 Har. & J. 117; Yerby v. Grigsby, 9 Leigh, 387; Conaway v. Sweeney, 24 W. Va. 643; Roehl V. Haumesser, 114 Ind. 311, 15 N. E. 345; Wiener v. Whipple, 53 Wis. 298, 302, 10 N. W. 433. 199 Ante, p. 69. See, also, Williams v. Bacon, 2 Gray, 387; Yerby v. Grigsby, 9 Leigh, 387; Conaway v. Sweeney, 24 W. Va. 649; Hargrove v. Ad- cock, 111 N. C. 166, 16 S. E. 16. 2 00 Williams v. Bacon, 2 Gray, 387, per Merrick, J.; Farmer v. Robinson, cited in note to Heyman v. Neale, 2 Camp. 337. 201 Sharman v. Brandt, L. R. 6 Q. B. 720; Wright v. Dannah, 2 Camp. 203; Farebrother v. Simmons, 5 Barn. & Aid. 333 (memorandum signed by auc- tioneer, suing as seller); Smith v. Arnold, 5 Mason, 414, Fed. Cas. No. 13,- 004; Bent v. Cobb, 9 Gray, 397; Johnson v. Buck, 35 N. J. Law, 338, 342; TuU v. David, 45 Mo. 444. 202 Durrell v. Evans, 30 Law J. Exch. 254, 6 Hurl. & N. 660; Benj. Sales, §§ 267, 267a. 203 Graham v. Musson, 5 Bing. N. C. 603; Graham v. Fretwell, 3 Man. & G. 368; Murphy v. Boese, L. R. 10 Exch. 126. See, also, Sewall v. Fitch, 8 Cow. 215; Ijams v. Hoffman, 1 Md. 423; Bamber v. Savage, 52 Wis. 110, 8 N. W. 609. 204 Simon v. Metivier, 1 Wm. Bl. 599; Hinde v. Whitehouse, 7 East, 558; Morton v. Dean, 13 Mete. (Mass.) 385; McComb v. Wright, 4 Johns. Ch. 650; 78 FORMATION OF THE CONTEAUT. [Ch. 2 as AYas said bv Shaw, C. J., "that the jjurchaser, by the very act of bid- ding, connected with the usage and practice of auction sales, loudly and notoriously calls on the auctioneer or his clerk to put down his name as the bidder, and thus confers on the auctioneer or his clerk authority to sign his name, and this is the whole extent of his au- thority." ""'' It follows that the auctioneer's authority to sign the memorandum ends with the sale, and that a memorandum subse- quently signed is invalid, -'"' and that he is not the agent to sign for the buyer at a private sale.^"^ The auctioneer's clerk, as well as the auctioneer himself, may make the memorandum, provided, at least, that he acts openly in entering the bids, so that the assent of the bidder may be implied.^"* The signature of a clerk of a telegraph company to a dispatch, the sending of which is authorized by either party, is sufficient.^"' An agent must sign as such, and his signature as a mere witness is inoperative.^^" Siinc — Broker. Broilers are as a rule agents for both parties. When so acting, th<'y have authority to do all that is necessary to bind the bargain, and hence may sign the requisite memorandum. ^^^ In this coimtry Harvey t. Stevens, 43 Vt. C^.i; Johnson v. Buck, 3.". N. J. Law, ^..^S; Gill v. Ilewett, 7 Bnsb, 10. 2"5 Gill V. Bicknell, 2 Cush. .".3.j, at page o-jS. Sue. also, Emmerson v. Htelis, 2 Taunt. :!S, per Sir James Manslield. The inference of agency to ,«ign for thu biililcrs may be rebutted. Bartlett v. Purnell, 4 Adul, & E. 7'.)2. 2or. Horton v. Jloc'arty, .">:; Me. 394. Cf. Smith v. Arnold, 5 Mas.m, 414, Fed. Gas. Xo. 13,004, per Story, J.; Bamber v. S;ivage, 52 Wis. 110, 113, 8 N. ^\'. GOO. = "7 Mews V. Carr, 1 Hurl. & N. 480, 2(; Law J. Exch. 39. Cf. Bartlett v. I'urnell. 4 Adol. .& E. 7!)2. 2"sBird V. Boulter, 4 Barn. & Adol. 443; Johnson v. Buck, 3.". X. J. Law, ;;:!S; Catlx'art v. Kiernaghan, .') Strob. 129; Gill v. Bicknell. 2 Cush. y.rCi, 358; lM< St V. Hill, 3 Wend. :isi.;; Coate v. Terry, 24 U. C. C. P. 571. But it seems that there is no general custom by which the clerk as such is the bidder's agent. I'icice v. Cnrf, L. It. 9 (J. B. 210, 215, per Blackburn, J. Cf. Cathcart v. Keirnaglian, 5 Strob. 129, per Waldlaw, J. 200 Godwin V. Francis, L. R. 5 C. P. 295; Smith v. Easton, .54 Md. 1:38; Howley v. Whipple, 4S N. H. 487; Gray, Communication, Tel. §§ 138-142. 210 CJosbell V. Archer, 2 Adol. & E. 5(H). 211 Cdddington v. Goddard, 16 Gray, 430. Ch. 2] THE NOTE OE MEMORANDUM. 79 it is customary for the broker to make an entry of the sale in a book kept for that purpose, and such an entry, if it contains the terms of the bargain, is a sufficient memorandum,^^* nor need it be signed by the broker."^ A note containing the terms of the bargain, and delivered by him to either party, is also sufflcient,^^* though, if he delivers to buyer and seller notes -which materially differ, there is no valid memorandum.^^° In England it is customary for the broker, when he makes a con- tract, to reduce it to writing, and to deliver to each party a copy of the terms as reduced to writing by him, and also to enter them in his book and to sign the entry."' As to the effect of the entry in the broker's book, there has been great difference of opinion. The view which seems to have prevailed, unlike that adopted in this country, and founded, perhaps, in some measure on the fact that brokers in London were until recently required by law to make such entries, is that the entry constitutes the contract itself, and is a contract in writing.^" It is natural, therefore, that difficult que* 212 Coddington v. Goddard, 16 Gray, 43G; Glason's Ex'rs v. Bailey, 14 .Jolins. 484; Merritt v. Clason, 12 Johns. 102; Sale v. Darragh, 2 HUt 184; Williams v. Woods, 16 Md. 220; Bacon v. Eccles, 43 Wis. 227. 213 Coddington v. Goddard, 16 Gray, 436; Merritt v. Clason, 12 Johns. 102; Clason's Ex'rs v. Bailey, 14 Johns. 484. 21-1 Butler V. Thompson, 92 U. S. 412; Bibb v. Allen, 149 U. S. 481, 13 Sup. Ct. 950; Remlcls v. Sandford, 118 Mass. 102; Newberry v. Wall, 84 N. Y. 576; Weidmann v. Champion, 12 Daly, 522; Bacon v. Eccles, 43 Wis. 227. 215 Peltier v. Collins, 3 Wend. 459; Suydam v. Clark, 2 Sandf. 133; Bacon v. Eccles, 43 Wis. 227; Bibb v. Allen, 149 U. S. 481, 13 Sup. Ct. 950, per Jackson, J. 213 Ben j. Sales, § 276. 217 Heyman v. Neale, 2 Camp. 337, per Lord Ellenborough; Thornton v. Charles, 9 Mees. & W. 802, per Parke, B.; Slevewrlght v. Archibald, 17 Q. B. 115, 20 Law J. Q. B. 529, per Lord Campbell, C. J., and Patterson, J.; Thompson v. Gardiner, 1 C. P. Div. 777; Thornton v. Meux, Moody & 51. 43, per Abbott, C. J.; Townend v. Drakeford, 1 Car. & K. 20, per Denman, C. J.; Thornton v. Charles, supra, per Lord Ablnger. But these authorities are overruled by Sievewright v. Archibald, supra. Benj. Sales, § 294. See Langd. Cas. Sales, 1035. The view was held by some judges that the entry not only did not constitute the contract, but was not even admissible In evidence, at least not without proof that It was seen by the parties when they contracted or was assented to by them. Gumming v. Roebuck, Holt, 172, per Gibbs, C. J. 80 FOEMATION OF THE CONTRACT. [Ch. 2 tions have arisen in England, where the sold note and the bought note differ from each other or from the entry in the broker's book. The result of the English decisions on this point, which owing to the difference in the law and the custom are of comparatively little value as precedents in this country, may be briefly stated as fol- lows: ^^' (1) If the broker make and sign an entry of the agree- ment in his books, the entry so signed constitutes the original agree- ment between the parties, and is the primary evidence thereof,^^* to the exclusion of any notes which may be delivered to the par- ties.-^" But if such notes correspond with one another, and differ from the entry, it becomes a question of fact for the jury whether their acceptance by the parties constitutes a new contract, as evi- denced by the notes. ^"^ (2) If there lie no signed entry, the notes, if they correspond with one another and state all the terms of the bargain, together constitute a memorandum of the contract.^-" Jiut if they do not correspond, or are insufficient, no memorandum at all exists.^^^ (3) Either note by itself constitutes a memorandum, in the absence of evidence that the signed entry or the other note differs therefrom. ^^* EFFECT OF NONCOMPLIANCE WITH THE STATUTE. 41. Failure to comply \(ritli the provisions of the statute in respect to acceptance and receipt, earnest or part pay- ment, or note or memorandum, [probably] does not ren- der the contract void, but merely prevents its enforce- ment. 2i8Tlie statement is taken from Kerr, Dig. Sales, § 20. Of. Benj. Sales, § 2!>2. 2 18 Cases cited in note 217, ante. 2 20 The notes do not constitute the contract. Thornton v. Charles, 9 Mees. «& W. 802, per Parke, B.; Hoyman v. Neale, 2 Camp. 337, per Lord Ellen- borough; Sievewright v. Archibald, 20 Law J. Q. B. 529, 17 Q. B. 115. 221 Thornton v. Charles, !» Moes. & W. 802; Sievewright v. Archibald, supra. --' Goom V. Aflalo, 6 Barn. & 0. 117; Sievewright v. Archibald, supra. 223 Thornton v. Kempster, 5 Taunt. 7SG; Grant v. Fletcher, 5 Barn. & C. 4.';il; Sievewright v. Archibald, supra. 224 Hawes v. Forster, 1 Moody & E. 368; Barton v. Crofts, 10 C. B. (N. S.) 11; Thompson v. Gardiner, 1 0. P. Div. 777. Ch. 2] EFFECT OF NONCOMPLIANCE WITH THE STATUTE, 81 The seventeenth section declares that, if there be no acceptance and receipt, no earnest or part payment, and no note or mem- orandum, the contract shall not "be allowed to be good." As to the meaning of these words, there are in England conflicting dicta, but no direct decision; some judges assuming that the words of the seventeenth section (unlike those of the fourth section, which de- clares that "no action shall be brought") go to the existence of the contract,^^' and others that there is no difference in the effect of the two sections, and that the provision affects only the remedy.^^" The latter view is sustained by the weight of opinion,--' and is certainly in conformity with the construction of the section in other respects, — for exa'mple, that, if one party has signed the contract, it may be enforced against him, though not against the other; that a mere written admission at any time before action brought, even if it repudiates the contract, is suiBcient, because it is evidence of the existence of the contract; that acceptance and receipt or part payment before action brought satisfies the section. This view has been affirmed by decision in Massachusetts,--" though the opposite view has been taken in Missouri.^^" In some states, however, the statute declares that the contract shall be "void." 225 Leroux v. Brown, D2 C. B. 809; Laythoarp v. Bryant, 2 Bing. N. O. 735, 747. 226 Bailey v. Sweeting, 9 C. B. (N. S.) 843, 30 Law J. C. P. 150, per Williams, J.; Maddison v. Alderson, 8 App. Cas. 467, 488, per Lord Blackburn; Britain v. Rossiter, 11 Q. B. Div. 123, 127, per Brett, L. J. 22TPol. Cont. (2d Am. Ed.) 605; Anson, Cont. 67; Clark, Cont. 128, 145. See Browne, St. Frauds, c. 8; 9 Am. Law Rev. 434. 228 Townsend v. Hargraves, 118 Mass. 325; Amsinck v. American Ins. Co., 129 Mass. 185; Wainer v. Milford Mut. Fire Ins. Co., 153 Mass. 335, 26 N. E. 877. See, also, Jackson v. Stanfield (Ind. Sup.) 37 N. B. 14. -229 Houghtaling v. Ball, 20 Mo. 563. To the same effect, Green v. Lewis, 26 tJ. C. Q. B. 618. SALES — 6 82 EFFECT OF THE COiNTKACT IN PASSING THE PROPEETY. [Cll. 3 CHAPTER m. EFFECT OF THE CONTRACT IN PASSING THE PROPERTY— SALE OF SPECIFIC CHATTEL. 42. In General. 43. Unconditional Sale. 44. Rules for Ascertaining Intention. 45. Conditional Sale Accompanied by Delivery. 46. Sale on Trial or Approval. 47. Sale or Return. IN GENERAL. 42. When there is a contract for the sale of specific goods, the property in them is transferred at such time as the parties to the contract intend it to be transferred. Executed and Executory Sales. The distinction between executed and executory sales has been already pointed out^ As we have seen, in an executed sale the property passes at once, and in an executory sale it does not pass until the contract is executed. In the one case the seller sells; in the other, he promises to sell. We have also seen that the thing which is the subject of sale must be ONvned by the seller, and that a contract to sell goods not yet in existence or acquired by the seller can only take effect as an executory sale.- Moreover, even if the goods which are the subject of sale are actually owned- by the seller, it is clear that if they are part of other similar goods, as 10 sheep out of a flock of 20, the property in the part sold can- not pass unless the particular goods are designated; in other words, unless the goods are specific.^ But provided the goods are specific, the rule holds universally that the property in them will pass whenever the parties so intend.* And, therefore, whether a 1 Ante, p. 5. 2 Ante, p. 22. 3 Post, p. 94. * Seath v. Moore, 11 App. Cas. 350, 370, 380; Shepherd v. Harrison, L. R. 5 H. L. 116, 127; Hatch v. Oil Co., 100 U. S. 124, 130; Elgee Cotton Cases, Ch. 3] UNCONDITIONAL SALE. 83 sale be executed or executory, and, if originally executory, when it will become executed, depends solely upon the intention of the parties. If the intention is clear, no question can arise. But be- cause the parties often fail to make clear their intention, frequently for lack of clearness in the intention itself, the courts have estab- lished certain rules of construction for the purpose of determining what is to be deemed the intention of the parties. UNCONDITIONAL SALE. 43. When there is a contract for the sale of specific goods, unless a different intention appears, the property in the goods passes to the buyer -when the contract is made. By the modern English rule, when an unconditional bargain is made for the sale of specific goods in a deliverable state, if nothing is said about payment or delivery, the property passes immedi- ately, so as to cast upon the buyer all future risk, though he is not entitled to the possession without payment of the price.*" In other words, the property passes subject to the seller's lien. This rule rests upon the presumed intention of the parties. The earlier English law was different, for it was formerly the rule that, un- less payment was made or credit given, the contract was presuma- bly executory; that is, that the intention of the parties was to transfer the property in consideration of actual payment, and not merely of the buyer's promise to pay." The rule, being one of presumption, must, of course, yield to circumstances from which a 22 Wall. 180, 1S7; Merchants' Exch. Bank v. McGraw, 8 0. C. A. 420, 59 Fed. 972; Terry v. Wheeler, 25 N. Y. 520, 525; Callaghan v. Myers, 89 111. 566, 570; Winslow v. Leonard, 24 Pa. St. 14; Kent Iron & H. Co. v. Norbeck, 150 Pa. St. 559, 24 Atl. 737; Lingham v. Eggleston, 27 Mich. 324; Blackb. Sales, 123: Benj. Sales, § 309. B Tarling v. Baxter, 6 Barn. & C. 360; Simmons v. Swift, 5 Barn. & C. 862, per Bayley, J.; Dixon v. Yates, 5 Barn. & Adol. 313, per Park, J.; Barr v. Gibson, 3 Blees. & AV. 390; Martindale v. Smith, 1 Q. B. 389; Gilmour v. Supple, 11 Moore, P. C. 566; Seath v. Bloore, 11 App. Gas. 350, 370; Benj. .Sales, §§ 313, 317. 6 Noy, Max. £)p. 87-89; Blackb. Sales, 171; Benj. Sales, § 315; 2 Kent, •Cdmm. 492. 84 EFFECT OP THE CONTRACT IN PASSING THE PROPERTY. [Ch. 3 contrary intention is to be inferred; and therefore even to-day a sale by a tradesman in his shop is presumed to be executory.'' The general rule in this country coincides with the modern English rule.' A fortiori, if payment be made at the time the bargain or credit is given, the property passes immediately. It is, indeed, frequently said that in a cash sale (and all sales where no time is agreed upon for payment are presumed to be cash sales) ° the prop- erty does not pass until payment. Eut this is not a correct state- ment of the lavs', since the seller's lien which arises in such cases can only exist provided the jiroijerty is in the Imyi-r, and the risk of loss, which ahvaj's accompanies the right of property, falls upon him, and not upon the seller.^" It is true, however, that the buyer does not acquire a complete title, since until payment he has not the right to possession. And even if the seller delivers posses- sion, if he does so upon the understanding, express or implied, that he is to receive immediate payment, he may reclaim the goods in case of nonpaj'ment^^ ^Bussey V. Barnett, Mees. & W. 312; Blackb. Sales. 173. Cf. Paul v. Reed, 52 N. H. 13G. 8 Leonard r. Davis, 1 Black, 476, 4S:.i: Blunt v. Little, 3 Mason. 107, 110, Fi'd. Cas. No. 1,.j78; Mnise v. Sherman, 106 Mass. -l:.;o; Ilaskins v. Warren, ll.j Mass. 514, vyi'.',; Goddard v. Biuney, Id. 450, 455: Townsend v. Hargraves, lis Mass. 325, 332; Wing v. Clark, 24 Me. 3GC; r'hillips v. Moor, 71 Me. 78; Ol.vpliant V. Baker, 5 I)enio, .■'.70-3S:;: Bissell v. Balconi. :y.) X. Y. 275, 270; .Jolinson V. Elwood, 53 N. Y. 431; Jloroy v. Medbury, 10 Hun, 540; Brock v. 0'I)nnii(.-ll, 45 N. J. Law, 441; Jenkins v. JaiTett, 70 X. C. 255; Sweeney V. Owsley, 14 B. Mon. 413: Barrow v. Window, 71 III. 214; Bertclson v. Bower. 81 Ind. 512: Towers v. Dellin,i;er, 54 Wis. 380. 11 X. W. 507; Rail V. Little Falls Lumber Co., 47 Minn. 422, 50 X. W. 471; Towne v. Davis (X. H.) 2J3 Atl. 4.50; Thompson v. Brannin (Ky.) 21 S. ' W. 1057; 2 Kent, Cmiim. 402. Scudder v. Bradbury, lOG Mass. 422, 427; Goodwin v. Boston & L. R. Co., Ill Mass. 487, 480; Riley v. Wheeler, 42 Vt. 528; AVard v. Shaw, 7 Wend. 404; Pickett v. Cloud, 1 Bailey, 302; Wabash Elevator Co. v. First Xat. Bank of Toledo. 23 Ohio St. 311; Miehij;an C. R. Co. y. Phillips, On 111. 100; Allen V. Hartfleld, 7G 111. 358; Fenelon v. Hogoboom, 31 Wis. 172, 17G; Southwestern Freight & Cotton Exp. Co. v. Stannard. 44 Mo. 71; Beauchamp' V. Archer, 58 Cal. 431; 2 Kent, Coram. 407; post, p. 178. i» See cases cited in notes 5 and 8, supra. 11 Haskins v. Warren, 115 Jlass. 514, .534, per Wells. .1.; Goodwin v. Boston & L. R. Co., Ill Mass. 487, 480; Palmer v. Hand, 13 Johns. 434, 435; Leven. Ch. 3] RULES FOR ASCERTAINING INTENTION. 85 RULES FOR ASCERTAINING INTENTION. 44. Unless a different intention appears, the folio-wing are rules for ascertaining the intention of the parties as to the time -when the property in the goods is to pass to the buyer: RULE 1 — When there is a contract for the sale of specific goods, and the seller is bound to do some- thing to the goods for the purpose of putting them into a deliverable state, — that is, into a state in ■which the buyer is bound to accept them, — the prop- erty does not pass until such thing is done. ilULE 2 — When there is a contract for the sale of spe- cific goods in a deliverable state, but the seller [or the buyer] is bound to Tveigh, measure, test, or do some other act Tvith reference to the goods for the purpose of ascertaining the price, the property does not pass until such act is done. V. Smith, 1 Denio, 571; Hayden v. Demets, 53 N. Y. 426, 431; Morey v. Med- bury, 10 Hun, 540; Allen v. Hartfleld, 76 HI. 358, 361; Fenelon v. Hogoboom, 31 Wis. 172, 176; Riley v. Wheeler, 42 Vt. 528, 532. See, also, Tyler v. Free- man, 3 Cush. 261; Whitney v. Eaton, 15 Gray, 225; Hirschorn v. Canney, 98 Mass. 149; Adams v. O'Connor, 100 Mass. 515; Stone v. Perry, 60 Me. 48; Seed V. Lord, 66 Me. 580; Peabody v. Maguire, 79 Jle. 572, 575, 12 Atl. 630; Paul V. Reed, 52 N. H. 136; Dows v. Kidder, 84 N. Y. 121; Harris v. Smith, 3 Serg. & R. 20; Lester v. McDowell, 18 Pa. St. 91; Wabash Elevator Co. v. First Nat. Bank of Toledo, 23 Ohio St. .311; Fishback v. Van Dusen, 33 Minn. Ill, 22 N. W. 244; 2 Kent, Comm. 497. In many of these cases it is said that the "property" had not passed, and In some of them it is clear that It had not, either because at the time of the bargain the goods were not in a deliver- able state or were not specific, or because delivery was to be made by the buyer at a particular place, or for some other reason. But in others it is clear that it must have been held, had the question been raised, that the risk of loss was by the contract cast upon the buyer, and hence that the property passed. In all such cases, where Jhe question is simply whether the buyer acquired a good "title," it is immaterial to determine whether the sale was conditional, or whether only the delivery was conditional, since in either case the title of the buyer is conditional upon payment. See Benj. Sales (Corbin's 6th Am. Ed.) § 318 et seq. 86 EFFECT OF THE CONTRACT IN PASSING THE TEOPEETY. [Ch. S Although an agreement for the sale of a specific chattel is prima facie an executed sale, the presumption may, as we have seen, be rebutted; and, if it appears that the parties have agreed that the property shall pass on the performance of a condition, the property will not pass until the condition is performed; and, if nothing has occurred in the meantime to defeat the transfer, it will then take place. When the parties have not expressed their intention clear- ly, it must be collected from the whole agreement. For the pur- pose of ascertaining the intention, the two rules of construction stated at the head of this paragraph have been adopted oy the courts. These rules, of which there is no trace in the reports be- fore the time of Lord Ellenborough, appear to have been adopted from the civil law.^^ Ride 1. Blackburn observes that the first rule is founded in reason. In- asmuch as it is for the benefit of the seller that the property should pass and the risk of loss be thereby transferred from the seller, who may still retain possession of the goods as security for the price, it is reasonable that, where the seller is bound to do some- thing before he can call upon the buyer to accept the goods, the intention of the parties should be presumed to be that the seller is to do the thing before obtaining the benefit of the transfer.^* The rule is firmly established both in England ^* and in America.^' Thus, where trees are to be trimmed, ^"^ cotton to be ginned and baled, ^^ fish to be dried,^^ grain to be threshed,^" or hops to be 12 Blackb. Sales, 174. 13 Blackb. Sales, 17,5; Benj. Sales, § 318 et seq; Chalm. Sale, § 21. 14 Rugg V. Minett, 11 East, 210; Acraman v. Morrlce, 8 C. B. 449, 19 Law J. C. P. o~\ Tansley v. Turner, 2 Scott, 23S, 2 Bing. X. C. 151; Boswell v. Kilborn, 15 Moore, P. C. 309, 8 Jur. 443; Seath v. Moore, 11 App. Cas. 350, o7(). isElgee Cotton Cases, 22 Wall. ISO, ISS; Foster v. Kopes, 111 Mass. 10; Sumner v. Hamlet, 12 Pick. 7C). S2; North Pacific L. & M. Co. v. Kerron, 5 Wash. 214, 31 Pac. 50.j. See, also, cases cited in the succeeding notes to this paragraph. 15 Acraman v. Morrice, 8 C. B. 449, 19 Law J. C. P. 57. 17 Elgee Cotton Cases, 22 Wall. 180, 193; Bond v. Greenwald, 4 Heisk. 453. 18 Foster v. Ropes, 111 Mass. 10. ;j 19 Grofe V. Belch, 62 Mo. 400; Thompson v. Conover, 32 N. J. Law, 406. Cll. 3] RULES FOR ASCERTAINING INTENTION. 87 baled,"" by the seller, the doing of these things is presumptively a condition precedent to the transfer of the property. And if the parties contract for the sale of an unfinished chattel, as a partly- built carriage or ship, in the absence of anything to show a con- trary intention, the property will not pass until the chattel is com- pleted.-^ It is also within the principle of this rule that, if the goods are to be paid for on delivery at a particular place, the prop- erty will not pass until delivery,^^ unless a contrary intention is ex- pressed ^^ or is inferable.^* But the fact that something is to be done to the goods by the seller after delivery will not prevent the property from passing.'' ° Rule 2. Blackburn states the second rule without confining it to acts to be done by the seller, and regards it as hastily adopted from the civil law, where it was a logical deduction from the principle that there could be no sale until the price was fixed.^° But the court of exchequer, in 1863, reviewed the English authorities,-' and con- cluded that the rule should be modified by confining it to acts to be done by the seller, thus bringing it within the principle of the first 2 Keeler v. Vandervere, 5 Lans. 313. 21 Halterline v. Rice, 62 Barb. 593; Pritchett v. Jones, 4 Rawle, 260. As to contracts for chattels to be manufactured by the seller, see post, 103. 2 2 Calcutta & B. S. Nav. Co. v. De Mattos, 32 Law J. Q. B. 322, 335, per Cockbum, C. J.; The Venus, 8 Cranch, 253, 275; Suit v. Woodhall, 113 Mass. 391; McNeal v. Braun, 53 N. J. Law, 617, 23 Atl. 687; Sneathen v. Grubbe, 88 Pa. St. 147; Braddock Glass Co. v. Irwin, 153 Pa. St. 440, 25 Atl. 490; Devine v. Edwards, 101 111. 138. 23 Lynch v. O'Donnell, 127 Mass. 311. 24 Weld v. Came, 98 Mass. 152; Terry v. Wheeler, 25 N. Y. 520; Bethel Steam-Mill Co. v. Brown, 57 Me. 9, 18; Lingham v. Bggleston, 27 Mich. 324, 329; Kail v. Little Falls Lumber Co., 47 Minn. 422, 50 N. W. 471. 2 6 Hammond v. Anderson, 1 Bos. & P. (N. R.) 69; Greaves v. Hepke, 2 Barn. & Aid. 131; Mount Hope Iron Co. v. Bnfflnton, 103 Mass. 62; Morrow v. Reed, 30 Wis. 81. 26 Blackb. Sales, 175. 27 Hanson v. Meyer, 6 East, 614; Zagury v. Fumell, 2 Camp. 240; Withers V. Lyss, 4 Camp. 237; Simmons v. Swift, 5 Bam. & C. 857; Logan v. Le Mesurier, 6 Moore, P. C. 116. 88 EFFECT OP THE CONTRACT IN PASSING THE PROPERTY. [Ch. 3 nile.^' Such a modification appears to rest upon sound principle; for, as Blacliburn obserres, tliere is little reason in supposing it to be the intention of the parties to render beneficial to the buyer the delay of an act in A\hich he is to concur. The rule is generally laid down in the United States without qualification,-" though it is sometimes confined to acts to be done by the seller or by the seller in connection -nith the buyer.'"' If, however, the goods are actually delivered, this shows an intention to complete the sale; and in such case a provision that they are to be weighed or meas- ured will not prevent the property from passing.^ ^ If they base been weighed or measured, the mere arithmetical calculation of the price is immaterial."^ = 3Tiirley v. Bates, 2 Hurl. &- C. 200, 33 Law J. Excli. 43; Chalm. Sale, p. 31. The point was not necessary to the decision of Turley v. Bates. 29 Jlacomber v. Parker, 13 I'iek. IT.j, 1S3; Riddle v. Varnum, 2ij Pick. 2S0; Barnard v. Poor, 21 Pick. 378; Sherwin v. :Mudge, 127 Mass. 517; Smart v. Batchelder, 57 X. H. 140; Xesbit v. Burry, 2.j Pa. St. 20S; Nicholson v. Tay- lor, 31 Pa. St. 128; Frost v. Woodruff, 51 111. 155; Rosenthal v. Kahn, 19 Or. 571, 21 Pac. 089. s" KlKee ("ntton Cases, 22 Wall. 180, 188, et seq.; Olyphant v. Baker, 5 Denio, 379, .'isl; Kein v. Tupper, 52 X, Y. 550; Russell v. Carrington, 42 N. Y. 118, 124; Linghain y. E,L;,i;lest(jn, 27 MU'h. :;24; Boswell v. CTreen, 25 X. J. Law, 390, 398; Haxall v. Willis, 15 Grat. 434, 442; McClung v. Kelley. 21 Iowa, .508, 511; King v. Jarman, 35 Ark. 190. siMacomber v. Parker, 13 Pick. 175, 183; Riddle v. Varnum, 20 Pick. 280; Odell V. Boston & M. R. R., 109 Jlass. 50; Burrows v. Whittaker, 71 N. Y. 291; Boswell v. Green, 25 N. J. Law, 390; Scott v. Wells, G Watts iV; S. 357; Ijeonard v. Davis, 1 Black, 47(j, 4S3; Upson v. Holmes. 51 Conn. .500; Bald- win V. Doubleday, 59 Vt. 7, 8 AU. 576; Haxall v. Willis, 15 Unit. 4:U. 445; Shealy v. Edwards, 73 Ala. 175; Cunningham v. Ashbrook, 20 Mo. 553; Morrow v. Reed, 30 Wis. 81; Foster v. Magill, 119 111. 75, 8 X. E. 771; Sedg- wick V. Cottiugham, 54 Iowa, 512, 6 N. W. 738; King v. Jarman, 35 Ark. 190. 3 2 Tansley v. Turner, 2 Bing. N. C. 151; Bradley v. Wheeler, 44 N. Y. 495. Ch. 3] CONDITIONAL SALE ACCOMPANIED BY DELIVERY. 89 CONDITIONAL SALE ACCOMPANIED BY DELIVERY. 45. Where the buyer is by the contract bound to do something as a condition, either precedent or concurrent, on which the passing of the property depends, the prop- erty -will not pass until the condition be fulfilled, even though the goods have been actually delivered into the possession of the buyer. The commonest condition precedent to the passing of the property is the payment of the price. Such a condition is frequently ex- pressed/^ as where goods are sold upon the installment plan;^* and it may be implied from the circumstances, as where goods are ordered to be sent by the seller, to be paid for on delivery, either in cash or by note or acceptance.'^ If the goods are delivered without payment, the presumption is that the condition is waived, or that none originally existed.'^ But this presumption may be rebutted by evidence of the acts or declarations of the parties, or of other facts, tending to show an intention to assert the condition.' ' If the sale is conditional, no title passes to the buyer; and, where the 33 Mires V. Solebay, 2 Mod. 243. Si Ex parte Crawcour, 9 Ch. Div. 419. See cases cited in notes 39 and 40, post. 8 5 Bishop V. Shillito, 2 Barn. & Aid. 329, note a; Brandt v. Bowlby, 2 Barn. & Add. 932. And see cases cited in note 11, supra, and notes 36 and 37, post. 88 Smith V. Dennie, 6 Plcls. 262; Farlow v. Ellis, 15 Gray, 229; Upton v. Sturbridge Cotton Mills, 111 Mass. 446; Wigton v. Bowley, 130 JIass. 252; Peabody v. Maguire, 79 Me. 572, 58.'), 12 Atl. 630; Paul v. Reed, 52 N. H. 136; Ward v. Shaw, 7 Wend. 404; Smith v. Lynes, 5 N. Y. 41; Parker v. Baxter, 86 N. Y. 586; Cole v. Berry, 42 N. J. Law, 308; Bowen v. Burk, 13 Pa. St. 146; Mackaness v. Long, 85 Pa. St. 158; Thompson v. Wedge, 50 Wis. 642, 7 N. W. 560; Fishback v. Van Dusen, 33 Minn. Ill, 22 N. W. 244; Warder, Mitchell & Co. v. Hoover, 51 Iowa, 491, 1 N. W. 795. 37 Tyler v. Freeman, 3 Gush. 261; Whitney v. Eaton, 15 Gray, 22.'5; Farlow V. Ellis, 15 Gray, 229; Peabody v. Maguire, 79 Me. 572, 585, 12 AU. 630; Langd. Gas. Sales, 1026; and cases cited in last note. 90 EFFECT OF THE CONTRACT IN PASSING THE PROPEETY. [Ch. 3 question is unaffected by statute, ^^ none can be acquired by his creditors/" or by bona fide purchasers from him.*" But, although the property does not pass, the buyer acquires a defeasible interest, which before breach of condition he may sell,*^ and which is subject to attachment by his creditors,*- and which upon the performance of the condition becomes perfect. And, like other bailees, he may maintain an action of trover against one who wrongfully invades his possession.*^ The seller also may sell or 38 Under statutes enacted in many states making chattel mortgages void against creditors and purcliasers from the mortgagor unless filed or recorded, conditional sales are frequently held to be chattel mortgages. Hervey v. llhode Island Locomotive Works, 93 U. S. 664; Murch v. Wright, 40 111. 487; Herytord v. Davis, 102 U. S. 2.35. See Benj. Sales (Corbiu's 6th Am. Ed.) § 4'i2 et seq. In some states, also, statutes have been enacted providing that conditional sales, where possession is delivered and the property reserved by the seller to secure the price, shall be void against creditors of the buyer or purchasers from him unless filed or recorded. See Benj. Sales (Corbin's 6th Am. Ed.) § 461. 38 Husscy V. Thornton, 4 Mass. 404; Barrett v. Pritchard, 2 Fick. 512; Forbes v. Marsh, l.'i Conn. 3S4; Mack v. Story, 57 Conn. 407, IS Atl. 707; Armington v. Houston, 3S \t. 448; Rogers v. Whitehouse, 71 Me. 222; Strong V. Taylor, 2 Hill, 320; Herring v. Hoppock, 15 N. Y. 409; Goodell v. Fair- brother, 12 R. I. 233; Call v. Seymour, 40 Ohio St. 670; Dewes Brewery Co. V. Merritt, 82 Mich. 198, 46 N. W. 379; City Nat. Bank v. Tufts, 63 Tex. 113. ■10 Harkness v. Russell, IIS U. S. 663, 7 Sup. Ct. 51; Coggill v. Hartford & X. H. R. Co., 3 Gray, 545; Hirschorn v. Canney, 98 Mass. 149; Zuchtmann V. Roberts, 109 Mass. 53; Ballard v. Burgett, 40 N. Y. 314; AVeeks v. Pike, 60 N. H. 447; Cole v. Berry, 42 X. J. Law, 308; Sanders v. Keber, 28 Ohio St. 630; Bradshaw v. Warner, 54 'ind. 58; Sumner v. Cottey, 71 Mo. 121; Fairbanks v. Eureka Co., 07 Ala. 109; Sumner v. Woods, Id. 139; National Bank of Commerce v. Chicago, B. & N. R. Co., 44 Minn. 224, 46 N. 'W. 342, 500; McComb v. Donald's Adm'r, S2 Va. 903, 5 S. E. 558; Standard Imp. Co. V. I'arlin & Orendorft Co. (Kan. Sup.) 33 Pac. 360. A different rule, however, appears to prevail in Pennsylvania, Illinois, Kentucky, and Maryland. See Beni. Sales (Corb. 6th Am. Ed.) § 446 et seq. 41 Day V. Bassett, 102 Mass. 445; Chase v. Ingalls, 122 :\Iass. 381; Car- penter V. Scott, 13 R. I. 477; Nutting v. Nutting, 63 N. H. 221. See Win- chester V. King, 40 Mich. I(i2, S X. 'W. 722. 42Newhall V. Kingsbury, 131 JIass. 445; Denny v. Eddy, 22 Pick. 535; Hurd V. Fleming, 34 Vt. 160. But the seller may retain the right to posses- sion notwithstanding delivery. Nichols v. Ashton, 155 Mass. 205, 29 N. B. 519. *3 HaiTington v. King, 121 Mass. 209. ^^- 3] SALE ON TRIAL OR APPROVAL. 91 mortgage his interest, and it may be attached by his creditors." The property being in the seller, the risk of loss remains in him." Upon breach of the condition, the right of possession revests in the seller,*^ and he may replevin the goods or sue to recover their value.*' It is generally held that he need not, in a suit to recover the value, allow for partial payments, or, in replevin, refund the same,*^ and that, although the seller reclaims the goods, the buyer cannot recover for installments paid; *" but some courts, upon equi- table principles, require the seller to account for payments re- ceived.^" SALE ON TRIAL OB. APPROVAL. 46. Where goods are delivered to the buyer on trial or on approval, the property therein passes to him — (a) When he signifies his approval; or (b) On the expiration of the time limited for trial; or (c) If no time is limited, on the expiration of a rea- sonable time. 47. SALE OR RETURN— Where goods are delivered to the buyer with the understanding that the property is to pass to him immediately, but that he may afterwards re- ** Burnell v. Marvin, 44 Vt. 277; Everett v. Hall, 67 Me. 497; McMillan V. Larned, 41 Mich. 521, 2 N. W. 662. 4 5 Randle v. Stone & Co., 77 Ga. 501; Stone v. Waite, 88 Ala. 599, 7 South. 117; Swallow v. Emery, 111 Mass. 355. See Kortlander v. Elston, 2 C. C. A. 657, 52 Fed. 180. Contra, Tufts v. Griffin, 107 N. C. 49, 12 S. E. 68; Burnley V. Tufts, 6G Miss. 49, 5 South. 627; Tufts v. Wynne, 45 Mo. App. 42. *e Hubbard v. Bliss, 12 Allen, 590. 47 Hill v. Freeman, 3 Gush. 2.j7; Salomon v. Hathaway, 126 Mass. 482; Hughes V. Kelly, 40 Conn. 148; Stone v. Perry, 60 Me. 48; Whitney v. Mc- Connell, 29 Mich. 12; Wiggins v. Snow, 89 Mich. 476, 50 N. W. 991. But see Wheeler & Wilson Manuf 'g Co. v. TeetzlafC, 53 Wis. 211, 10 N. W. 155, where a provision authorizing the seller on default to take the machine at his option was held to require demand. 4 8 Angier v. Taunton Paper Co., 1 Gray, 621; Brown v. Haynes, 52 Me. 578; Duke v. Shackleford, 56 Miss. 552; Fleck v. Warner, 25 Kan. 492. 49 Haviland v. Johnson, 7 Daly, 297; Latham v. Sumner, 89 111. 233. BO Preston v. Whitney, 23 Mich. 260; Hine v. Roberts, 48 Conn. 267; Guil- ford v. McKinley, 61 Ga. 230; Third Nat. Bank v. Armstrong, 25 Minn. 530; Snook v. Raglan, 89 Ga. 251, 15 S. E. 364. 92 EFFECT OF THE CONTRACT IN" PASSING THE PEOPEETY. [Cll. 3 turn the goods if he sees fit, the property passes to the buyer, and, in case of a return of the goods, revests in the seller. Conditions postponing the transfer of the property may exist for the benefit of the buyer as well as of the seller. Instances of such conditions are afforded in sales "on trial" or "on approval." Such a transaction amounts to a bailment, with the right in the buyer to convert the bailment into a sale, at his option. In such cases there is no sale until the buyer signifies to the seller his approval or acceptance, or does some act adopting the transaction as a sale.^^ If he does not signify his approval or acceptance, but retains the goods without giving notice of rejection, it is generally held that the property passes on the expiration of the time limited for trial, ^- or, if no time is limited, on the expiration of a reasonable time,^^ although some cases hold that failure to return is merely evidence of intention on the buyer's part to exercise his right to purchase.^* Sale or return. A bailment with an option in the bailee to buy is, however, es- sentially different from a sale with the right of return. It is, of course, competent for the parties to agree that the property in the goods shall pass to the buyer on delivery, and that, if he does not approve of the goods, he may return them. In the latter case the transaction is a sale defeasible on the fulfillment of a condition sub- si Swain v. Shepherd, 1 Moody & E. 223; Elphick v. Barnes, 5 C. P. Div. 321, 320; Hunt v. Wyman, 100 Mass. 198; Pitts' Sons Manuf'g Co. v. Poor, 7 111. App. 24; Mowbray v. Cady, 40 Iowa, 604; Pierce v. Gooley, 56 Mich. i3G2, 23 N. W. 310. 52 Humphries v. Carvalho, 16 East, 45; Elphick v. Barnes, 5 G. P. Div. 321; Waters Heater Co. v. Mansfield, 48 Yt. 378; Butler v. School Dist, 149 Pa. St. 351, 24 Atl. 308; Spicliler v. Marsh, 30 Md. 222; Delamater v. Chappell, 48 Md. 244, 253; Prairie Farmer Co. v. Taylor, 09 111. 440; Aultman v. Thelrer, 34 Iowa, 272. A sale on condition that the buyer may return on a certain contingency becomes absolute if he disables himself from performing the con- dition by mortgaging the goods. Lynch v. Willford (Minn.) .59 N. W. 311. B3 Moss V. Sweet, 16 Q. B. 493, 20 Law J. Q. B. 167; Dewey v. Erie Bor- ough, 14 Pa. St. 211. 6-1 Hunt V. Wyman, 100 JIass. 198, per Wells, J.; Kahn v. Klabunde, 50 Wis. 235, 6 N. W. 888. See Sturm v. Boker, 150 U. S. 312, 331, 14 Sup. Ct. 99. Ch. 3] SALE ON TRIAL OR APPROVAL. 93 sequent."" The property vests in the buyer, and, upon the ex- ercise of his right of return, it revests in the seller. In case the buyer disables himself from performing, the sale becomes absolute. The difficulty lies in ascertaining the intention, and diiferent con- structions would probably be placed upon the same transaction by different courts.'*'' Thus, in several cases where goods were de- livered to the buyer upon his agreement to return them on a specified day, or else to pay for them, the transaction has been construed as an executed sale with the right of return; ^' but it is perhaps open to doubt whether it would not be more in accordance with the in- tention of the parties to construe such a transaction as a bail- ment with the right to purchase. The terms "sale on trial," "sale on approval," and "sale or return" are generally used without much distinction; ^* but the term "sale or return" is in this country often confined to sales defeasible upon the return of the goods, in dis- tinction to the terms "sale on trial" and "sale on approval," which are confined to cases in which the approval of the buyer is a condi- tion precedent to the transfer of the property; "" and the distinction is a convenient one. 6 5 Eay V. Thompson, 12 Cusli. 281; Schlesinger v. Stratton, 9 R. I. 578, 580; Hotchkiss v. Higgins, 52 Conn. 205; Robinson v. Fairbanks, 81 Ala. 132, 1 South. 552. Cf. Head v. Tattersall, L. R. 7 Exch. 7; Sturm v. Boker, 150 L'. S. 312, 14 Sup. Ct. 99. See Clark, Cont. 021-624. B6 Ray V. Thompson, 12 Cush. 281. 67 Dearborn v. Turner, 16 Me. 17; Buswell v. Bicknell, 17 Me. 344; Crocker V. Gullifer, 44 Me. 491, 494; McKinney v. Bradlee, 117 Mass. 321; Martin V. Adams, 104 Mass. 262. s8 Cf. Moss V. Sweet, 16 Q. B. 493, 20 Law J. Q. B. 167; Kahn v. Klabunde, 50 Wis. 235, 238, 6 N. W. 888; Spickler v. Marsh, 36 Md. 222; Benj. Sales, § 595; Chalm. Sale, pp. 29, 32. s9 Cf. Schlesinger v. Stratton, 9 R. I. 578, 580; Hotchkiss v. Higgins, 52 Conn. 205; Robinson v. Fairbanks, 81 Ala. 132, 1 South. 552; Benj. Sales (Bennett's 6th Am. Ed.) pp. 568, 569; Id. (Corbin's Ed.) p. 796, note 30. 94 EFFECT OF THE CONTRACT IN PASSING THE PROPEKTY. [Ch. 4 CHAPTER IV. EFFECT OF THE CONTRACT IN PASSING THE PROPERTY (Continued) -SALE OP CHATTEL NOT SPECIFIC. 48-49. In General. 50-53. Subsequent Appropriation. 54-56. Reservation of Right of Disposal. IN GENERAL. 48. Where the contract is for the sale of unascertained goods, the contract is executory, and no property is thereby transferred. 49. Where the goods -wrhich are the subject-matter of a contract of sale are part of a specific stock from which they have not been separated, no property passes until separation. EXCEPTION— In some states it is held that, where the goods sold are a part of a specific bulk of uni- form character, the property in an undivided part is transferred by the contract, and -without sepa- ration, if such be the intention of the parties. The rule that the parties must be agreed on the specific goods ^vhich are to be the subject of the sale is founded, as Blackburn says, on the very nature of things; for, until the parties are agreed' on the specific goods, the contract can be no more than a contract to supply goods answering a particular description, and since the seller would fulfill his contract by furnishing any goods answering the description, and the buym- could not object to them, provided they answered the description, it is clear that there can be no intention to transfer the property in any particular goods.^ Where Goods are Part of Specific SiDck. Cut, where the goods are so far ascertained that the parties have agreed to take them from a particular stock owned by the seller, 1 Blacl>;b. Sales, 124; Benj. Sales, 3.52; 2 Kent, Comm. 49G. Ch. 4] IN GENERAL. 95 a different question may arise. If the goods are part of a specific stocl<, consisting of units of varying quality or value, as a number of sheep out of a flock, it is clear that a selection must take place before the property in any particular units can pass. But if the goods are part of a uniform mass, such as grain or oil or coal, it is possible that the parties may intend that the property in an un- divided part shall pass, the parties becoming quasi tenants in com- mon of the mass ; and such an intention may be inferable although the contract is not in terms for the sale of an undivided interest, as a half or a third, but where it is for the sale of a certain number of bushels or gallons or tons of the mass of grain or oil or coal. In England no such distinction is recognized, and the general rule is applied, even though the mass be of uniform quality and value.^ But in the United States, while many cases maintain strictly the older rule,^ others hold that if the sale be of a certain quantity, by weight or measure or count, its separation from a specific, uniform mass is not necessary to pass the property, when the intention to do so is otherwise manifested.* Upon the ques- 2 Wallace v. Breeds, 13 East, 522; Austen v. Craven, 4 Taunt. 644; White V. Wilks, 5 Taunt. 17C; Busk v. Davis, 2 Maule & S. 397; Shepley v. Davis, 5 Taunt. 617; Gillett v. Hill, 2 Cromp. & M. 530; Gabarron v. Kreeft, L. R. 10 Bxch. 274. Whitehouse v. Frost, 12 Bast, 614, may, perliaps, rest upon this distinction. See Busk v. Davis, 2 Maule & S. 397. But the case has been much questioned in England. Benj. Sales, § 354. It is, however, fre- quently cited as an authority in the American eases which recognize the distinction. 3 Woods V. McGee. 7 dhio, 127 (but see Newhall v. Langdon, 39 Ohio St. 87); Scudder v. Worcester, 11 Cush. 573; Ropes v. Lane, 9 Allen, 502; Hes- ter V. Woodman, 22 N. H. 172; Heeder v. Machen, 57 Md. 56; Ferguson v. Louisville City Nat. Bank, 14 Bush, 555; Courtright v. Leonard, 11 Iowa, 32; McLaughlin v. Piatti, 27 Cal. 451; Dunlap v. Berry, 4 Scam. 327; Warten v. Strane, 82 Ala. 311, 8 South. 231; Commercial Nat. Bank v. Gillette, 90 Ind. 268. See, also. Golden v. Ogden, 15 Pa. St. 528; Haldeman v. Duncan, 51 Pa. St. 66. Some cases cited as authorities on this point, perhaps, rest on the ground that the mass was not uniform. Woods v. McGee, supra; Hutch- inson V. Hunter, 7 Pa. St. 140; McLaughlin v. Piatti, 27 Cal. 451 (see Horr V. Barker, 8 Cal. 003, 11 Cal. 393). See Stone v. Peacock, 35 Me. 385, 388. i>rrijirintirin hi/ Act of Seller. The difficulty arises when the seller makes the sG Mass. 221, :V) X. E. 1017, per Holmes, .T. 18 Blackb. Sales, 128; Merchants' Nat. Bank v. Bangs, 102 Mass. 2!)1, 2yr,. 10 Benj. Sales, § o.'iO; Gill v. Benjamin, 64 Wis. '302, 2.5 N. W. 445 (to ))i- ■delivered over the rail of the buyer's vessel). A foreign merchant contracted for several cargoes of lumber, to be delivered, seasoned, f. o. b., witliin seven months of May 1st; certain advances to be made before .Tune 1st. The advances were made, and the first cargo was prepared by .\iiKust, piled by itself, and the buyer notified. The buyer had difficulty in chartering- ships, and the lumber was burned. Held, that the title had not passed. Schreyei- V. Kimball Lumber Co., 4 C. C. A. 547, .54 Fed. 653. 20 National Bank v. Dayton, 102 TJ. S. 59; Hyde v. Lathrop, 2 .\bb. Dec. 436; Clafiin v. Boston & L. R. Co., 7 Allen, 341; Veazie v. Holmes, 40 Me. 69; Bloyd v. Pollocks, 27 W. Va. 75; Sedgwick v. Cottlngliam, 54 Iowa, .512, 6 N. W. 738. 100 EFFECT OF THE CiiXTUACT IN PASSING THE 1 EOPERTY. [Ch. 4 if the buyer orders goods to be sent to him at his expense, and the seller delivers goods conforming to the contract to a carrier for ti-ansmission to the buyer, the appropriation is complete upon such deliver}-, provided that the seller does not reserve the right of dis- posal.-^ The right to make the appropriation springs from the au- thority to deliver to the carrier as agent for the buyer, which is equivalent to delivery to him personally, and such authority may either be conferred by the express terms of the contract, or may be implied from the course of trade. If, however, the seller is to de- liver to the buyer at the place of destination, delivery to the car- rier is not delivery to him as agent of the buyer, but as agent of the seller, and hence does not pass the projjerty.^^ Whether delivery to the carrier in pursuance of an order to that effect from the buyer, with directions to collect the price on delivery to the buyer, or, as the transaction is usually designated, "shipment 0. O. D.," operates as an appropriation to the contract is a question on which the authorities differ. On the one hand, it is held, with what ap- pears to be the better reason, that in such a case the carrier is the 21 Fragano v. Long, 4 Barn. & C. 210; Browne v. Hare, 4 Hurl. & N. 822, 20 Law J. Exch. G; affirming 3 Hurl. iV: N. 484, 27 Law J. Exch. 372; Tre- gelles V. Sewell, 7 Hurl. & N. (374; Calcutta & B. S. Nav. Co. v. De ilattos, 32 Law J. Q. B. 322. :',2S, per Blackburn, J.; The Mary and Susan, 1 Wheat. 2.5; Blum v. The CacUlo, 1 "Woods, G4, Fed. Cas. No. 1,573; Low v. Andrews, 1 Story, 38, Fed. Cas. No. S,.j.'0; Fenton v. Braden, 2 Cranch, C. C. 550, Fed. Cas. No. 4,730; Finch v. Mansfield, 07 Mass. 89; Merchants' Nat. Bank v. Bangs, 102 Mass. 201; Odell v. Boston & M. R. Co., 109 Mass. 50; Frank v. Hoey, 12S Mass. 2ij3; Smith v. Edwards, 156 Jlass. 221, 30 N. E. 1017; Torrey v. Ccirliss, 33 Me. 333; Arnold v. Prout, 51 N. H. 5S7; Hohart v. Littlefleld, 13 R. I. ;U1; Krulder v. Ellison, 47 N. Y. 36; Bailey v. Hudson R. R. Co., 40 X. Y. 70; Pacific Iron Works v. Long Island R. Co., C2 N. Y. 272; Schmertz v. Dwyer, 53 Pa. St. 335; Kelsea v. Ramsey & Gore Manufg Co.. .5.-1 N. J. Law, 320, 26 Atl. 007; Magruder v. Gage. 33 Md. 344; Watkins v. Paine, 57 Ga. 50; Pilgreen \. State, 71 Ala. 3(;S; Diversy v. Kellogg, 44 111. 114; Ellis v. Roche, 73 111. 280; Ranney v. Higby, 4 Wis. 174; Sarbecker y. State, 05 Wis. 171, 2t; N. W. 541; GavrrtS( u v. Sell)y, 37 Iowa, 520; Bur- ton V. Baird, 44 Ark. 550. 22 Calcutta & B. S. Xav. Co. v. De Mattos, 32 Law J. Q. B. 322, per Blackburn, J.; Dunlop v. Lambert, G Clark A: F. 600, per Lord Cottenham; Suit V. Woodhall, 113 Mass. 301; McNeal y. Braun, 53 N. J. Law, 617, 23 Atl. 087; Bloyd y. Pollocks, 27 W. Ya. 75; Cougar y. Galena & C. U. R. Co., 17 Wis. 477. Ch. 4] SUBSEQUENT APPEOPEIATION. 101 seller's agent, and hence that the property does not pass until de- livery by the carrier to the buyer; -^ but other cases hold that the condition as to payment is intended merely to reserve the seller's lien for the price, and that the delivery of the goods to the carrier, being made in pursuance of the instructions of the buyer, passes the property.-* Other Forms of Appropriation by Act of Seller. Appropriation by the act of the seller may take place even be- fore the goods are forwarded, as where they are to be sent in sacks furnished by the buyer. Under such circumstances, unless the seller retains the right of disposal, the appropriation is complete as soon as the seller puts the goods into the sacks.^^ Another common form of appropriation by act of the seller is where, in pursuance of the contract, he incorporates his own ma- terials with the property of the buyer, as where a carpenter is em- ployed to repair a chattel or to erect a building on land of his employer. As soon as the incorporation takes place, the property in the materials passes; but up to that moment the carpenter has the right to use any materials he sees fit, and the mere fact that he has selected materials with the intention of incorporating them confers upon the employer no right of property in them.^" 23 state V. O'Neil, .58 Vt. 140, 2 Atl. 586 (see, also, dissenting opinion of Harlan, J., in O'Neil v. Vermont, I4i U. S. 323, 12 Sup. Ct 693, in whicli a writ of error was dismissed on tlie ground that no federal question was Involved); Lane v. Cbadwicli, 146 Mass. OS, l.j N. E. 121; Baker v. Bourci- cault, 1 Daly, 23; U. S. v. Shriver, 23 Fed. 134; ^yagne^ v. Hallack, 3 Colo. 17G. ■^i Com. v. Fleming, 130 Pa. St. l.OS. 18 Atl. 622; Higgins v. Murray, 73 N. Y. 2.52, semble; State v. Intoxicating Liquors, 73 Me. 278; Pilgreen v. State, 71 Ala. 308; State v. Carl, 43 Ark. 353; Hunter v. State, 55 Ark. 357, 18 S. W. 374; Norfolk S. R. Co. v. Barnes. 104 N. C. 25, 10 S. E. 83. 2 5 Aldridge v. Johnson, 7 El. & Bl. 8S5, 20 Law .T. Q. B. 290; Langton v. Higgins, 4 Hurl. & N. 402, 28 Law J. Exch. 252. In Ogg v. Shuter, 1 0. P. Div. 47, reversing L. R. 10 C. P. 159, it was held that, by taking a bill of lading to his own order, the seller reserved the right of disposal, notwith- standing the fact that he had put the goods in the buyer's sacks. 26 Tripp V. ArmlLage, 4 Mees. & W. 687; Wood v. xJell, 6 El. & HI. 355, affirming 5 El. & Bl. 772; Seath v. Moore, 11 App. Cas. 350, 881; Johnson V. Hunt, 11 Wend. 135; Wilkins v. Holmes, 5 Cash. 147; Langd. Cas. Sales, 1029. 102 EFFECT OF THE CONTRACT IN PASSING THE PROPERTY. [Ch. 4 Seller must Act in Conformity with Authority. Wlicie llic appropriation is to lie made by the seller, no prop- erty in the ;j;oo(ls selected by him will ]iass unless he exercises his authoi'ity in conformity with the contract. Thus no property will pass if the goods do not conform to the description,-' or unless he ships the ^neds within the time s]iecitie(; N. W. r,'X\. -8 Rommel v. Wini^ate, 10:', Mass. 327. Where the order requires shipment on a speeitieil day, shipment before the day does not pass the property. Hoover V. ilalier, .jl Minn. 2(i'.>. .■>;! X. AV. CIC. ■-■■' AMieclhonse v. Parr, 141 JIass. 7,'.y.^, c, X. 10. 787. 3" Cnnliffe ^. Harrison, 1; Exch. 'Jo:!; Downer v. Thompson, 2 Hill, 137 (cf. i> Hill, 21 18); Rommel v. Wingate, lo;;; JIass. 327; Barton v. Kane, 17 Wis. .'IS; Bailey v. Smith, i'.', X. H. 141. Where earthenware was ordered, and additional earthenware, entirely ihtfereiit. was sent in the same crate, held, that tlie property had not jiassid. Levy v. (ireen, 1 El. & El. 'JIIO, 28 Law .1. (.]. B. 31'.J. Siiuie American eases hold that the seller "may satisfy the contract by tendering a greater quantity, from which the buyer may select, prcivided the mass does nut var.v in (piality." Ben.j. .Sales (Corbiu's (;th Am. Ed.) §§ ."')12, .>;!!. This is said to lie a sequence from Kimberly v. Patchin, supra, and other cases holding that where the goods sold are i.art of a s]iei'itic bulk, of uniform character, the property in an undivided part may be transferred without sep:iration. But, admitting the correctness of 1hose cases, it would be an undue extension of the principle governing them to hold that a delivery of a greater amount than that (irdered, out of which the buyer is to select, is a delivery in conformity with the contract. Ch- 4] SUBSEQUENT APPROPRIATION. 103 his cart and fetch them away. Here the buyer may choose first one part of the stack, and then another, until he has done the act determining his election; that is, until he has put the bricks into his cart. ^A'hen he has done that, his election is determined, and he cannot put back the bricks and take others from the stack." Chattel Made to Order. Where a chattel is made to order out of the materials of the maker, it seems, on princijile, that the ordinary i-ule should apply; that is, that unless the maker is authorized or required to do in respect to it, after it is completed, some act necessarily involvirii; its appropriation to the contract, — for example, to forward it to the buyer, — the propeity will not pass until it is accepted by him. In making the chattel, as in procuring goods in any other \\ ay to ful- fill a contract, the seller is acting for himself, and not for the buyer, and he can satisfy his contract equally well by making and tendering another chattel within the stipulated time as bv tendering the chat- tel first made. This view has been sustained in England, and in many of the courts of this country; ^^ but in others it is held that the property passes as soon as the seller finishes the chattel, and sets it apart for the buyer.''' Chattel to be Paid for in Installments as Work Progresses. In shipbuilding contracts, where it is provided that the pay- ments shall be made in installments at particular stages in the prog- ress of the work, a peculiar rule of construction has been adopted in England, by which the parties are held, by implication, to have 31 Benj. Sales, § y.'O; Valentine v. Brown, 18 Pick. 549. Gf. Inhabitants of VVestfleld v. Mayo, 122 Mass. 100. 32 Mucklow V. Mangles, 1 Taunt. 318; Atkinson v. Bell, 8 Barn. & C. 277; Moody V. Brown, 34 Me. 107; Tufts v. Grewer, 83 Me. 407, 22 Atl. 382; Shaw V. Smith, 48 Conn. 306; Eider v. Kelley, 32 Yt. 268; Scudder v. Calais Steamboat Co., 1 Cliff. 370, 878, Fed. Cas. No. 12,505, per Clifford, .T.; Butter- worth Y. McKinly, 11 Humph. 20(i, per Totten, J.; Tufts v. Lawrence, 77 Tex. 526, 14 S. W. 105. See Goddard v. Binney, 115 Mass. 4.50, 456; Whit- comb V. Whitney, 24 Mich. 485; Pratt v. Peck, 70 Wis. 620, 36 X. W. 410; Langd. Gas. Sales, 1029. 3 3 Bement v. Smith, 15 Wend. 403; Ballentine v. Robinson, 4(; Pa. St. 177; Shawhan v. Van Nest, 25 Ohio St, 490; Hi.uxins v. Murraj', 4 Hun, 565. See, also. West Jersey K. Co. v. Trenton Car- Works Co., 32 X. J. Law, 517; Gor- don V. Norris, 40 N. H. 370. 104 EFFECT OF THE CONTRACT IN PASSING THE PROPERTY. [Ch. 4 ('\iii(ed an intention that the property in the uncompleted vessel shall pass on the payment of the first installment.^* It follows that, as new materials are incorporated in the unfinished vessel, they hecome the property of the buyer. This rule of construction has not met with approval in the United States, and it is gen- erally ^^ held that the intention of the parties as to the time when the property is to be transferred is to be determined, as in other cases, from the terms of the contract and the circumstances of the transaction."" Therefore, unless a contrary intention appears, the ordinary rule will prevail, — that no property passes before the chattel is completed.''^ RESERVATION OF RIGHT Or DISPOSAL. 54. When there is a contract for the sale of unascer- tained goods, and the seller, in pursuance thereof, deliv- ers goods to a carrier for transmission to the buyer, but reserves the right of disposal until certain conditions are fulfilled, notwithstanding the shipment, the appropriation does not become absolute, and the property does not pass until the conditions are fulfilled. 55. BY BILL OF LADING— When the goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal.^ 56. When the seller, upon shipment, takes a bill of lad- ing to his own order, and deals Avith it so as to secure the 34 Wooils v. Russell, 5 Barn. & Aid. 942; Clarke v. Spence, 4 Adol. & E. 4-18. See, also, Scath v. Meore, 11 App. Cas. 350, 380. 35 The English rule was followed iu Seudder v. Calais Steamboat Co., 1 Cliff. 370, Fed. Cas. No. 12, .'0.', and Saudford v. Wiggins Ferry Co., 27 Ind. 522. se Clarkson v. Stevens, IDO U. S. 505, 1 Sup. Ct. 200, affirming Stevens v. SUippen, 29 N. J. E(!. (-.(12. ^T Andrews v. Durant, 11 X. Y. 35; Williams v. Jackman, IG Gray. 514; Briggs V. Light Boat. 7 Allen, 287; Wright v. Tetlow, 99 Mass, 397; Elliott v. Edwards, 35 N. .J, Law, 2c;5, Edwards v. Elliott, 30 N. .J. Law, 449; Derby- shire's Estate, 81 I'a. St, 18; Green v. Hall, 1 Houst. 500, 540. 38 Ohalm. Sale, 33. Ch. 4] EESEHVATION OF EIGHT OF DISPOSAL. 105 contract price, either by sending to an agent the bill of lading, together with a bill of exchange drawn on the buyer for the price, with instructions to deliver the bill of lading only on acceptance or payment of the bill of ex- change, or by delivering the bill of lading as security to a banker w^ho has discounted the bill of exchange, the appro- priation is conditional on the acceptance or payment of the bill of exchange, as the case may be. The rule that the seller who delivers goods to a carrier in pur- suance of authority derived from the buyer is presumed thereby to appropriate the goods to the contract, like other rules for de- termining when the property has passed, is simply a rule of con- struction adopted for the purpose of ascertaining the real intention of the parties, which they have failed to express.^" And therefore, if it appears that the seller, though authorized to make the appropria- tion, has failed to do so, or has done so upon condition, the pre- sumption must jdeld to the facts. The commonest way of rebutting this presumption is by showing that he, has reserved the right of disposal, or, as it is frequently called, the "jus disponendi." Reservation of Right' of Disposal by Bill of Lading. A bill of lading is a writing signed on behalf of the carrier to whom goods are delivered for transportation, acknowledging their receipt, and undertaking to deliver them at their place of destina- tion to the person named therein. When a bill of lading is given, no one is entitled to receive the goods except the person therein named, or one to whom the bill of lading has been properly in- dorsed. During the transit the bill of lading is the symbol of property, and the indorsement and delivery of the bill of lading operate as a symbolical delivery of the goods, and by such indorse- ment and delivery the property passes, if such is the intention of the parties. When, therefore, the seller ships the goods which he intends to deliver under the contract, but takes a bill of lading to his own order, not as agent of the buyer, but on his behalf, he thereby reserves the power of disposing of the property in the goods ; and consequently there is no final appropriatioji, but, at most, a conditional appropriation, and the property does not, on shipment, 8 9 Benj. Sales, § 381. 108 EFFECT OF THE CONTRACT IN PASSING THE PROPERTY. [Ch. 4 pnss to the buyer." The fact Ihat the seller takes the bill of lad- ing to lii.^ c.wn Older is aliiiesi dciisive to show his intention to reserve the right of disposal.*' The presumption 'that he thereby reseives such right may, indeed, be rebutted iiy proof that in so doing he acted as agent of the buyer, and did not intend to retain control of the property; and it is for the jury to determine, as a cjuestion of fact, what the real intention was.*- But the mere fact that the seller sends to the buyer an invoice desciilting the goods as sliipped on his account and at his risk is not enough to rebut the presumption;*" and the presumption arises altliough the seller ships the goods in the buyer's own vessel, and the bill of lading states that the goods are freight free, and the buyer's own property.** DailiiKj trith Bill of Lndiiiij to Secure Cmdrnrt Prhe. A common method of dealing with tlie bill of lading, when the seller reser\es the right of disiiosjil so as to secure the payment of the contract prici', is to send tlie bill of lading, together with a bill of exchange drawn on the buyer for the price, to an agent of the seller, with instructions that the bill of lading is not to be de- li\'ered to the buyer until acceptance or payment of the bill of 40 Miral)ita v. Innieiial Ottoman Bank, 3 Exch. Div. 104, 172, per Cotton, Ij. .T.; Wait v. Baker, i: Exch. 1; Brandt v. Bowlby, 2 Barn. & Adol. 9.32; Jloakes v. Nicliolson, t'.i C. B. (N. S.) 2110, .34 Law .T. ('. P. 27:1; Ok;; v. Shuter, 1 C. P. Div. 47, reversins L. R. 10 < '. P. l.'li; Ellershaw v. Magniac. li Bxcli- .'')70; Merchants' Nat. Bank v. Bani^s, 102 Mass. 2;il, L'O.j: Earmers' & Meclianics' Nat. Bank v. I>nKan. 74 X, Y. ."iiis. .->7S: Erwin v. Harris, 87 Ga. :•.:'■;;, 13 S. E. ."it::: .\labama, G. S. K. Go. v. Mt. Yernon Co., 84 Ala. 173, 4 South. a.'C; Porclieinier v. Stewart, (;."> Iowa, :<'X\. 22 N. AY, 8S(J; BerRman V. Iiidianapolis & St. L. li. Co., 104 Mo. 77, 1.5 S. W. ini2. See, also, Stolleu- werek v. Thacher, 11. "i JIass. 224. Where the seller delivers goods to a car- rier, consigned to himselt, in care of the Duyer, the property does not pass. Ward V. Taylor, .".r, 111. 4:i4. ■11 Shepherd v. Harrison. L. R. ." II. L. IKJ; Dows v. National Exchange Bank, ill U. S. lilS: Xewccmib v. Bestcjn i^c L. It. Co., 11.1 Mass. 2:'.o. <2 .loyce V. Swann, 17 C. B. (X. S.) ,S4: Yan Ciisteel v. Booker, 2 Exch. 691; Browne v. Hare, 4 Hurl. tV X. .S22. 29 Law .1. Exch. C; Moakcs v. Xiehol- son, 19 C. B. (X. S.) 290, 34 Law J. C, P. 273; Merchants' Xat. Bank v. Bangs, 102 Mass. 291; Hobart v. Littlefield, 13 R. I. 341. *'■' Cases cited in note 41, supra. 44 Turner v. Trustees of Liverpool Docks, G Exch. .j43; Gabarron v. Kreeft, L. R. 10 Exch. 274. Ch. 4] -RESERVATION OF RIGHT OF DISPOSAL. 107 exchange. In such a case the appropriation does not become ab- solute, and the property does not pass, until the buyer accepts or pays the bill of exchange, as the case may be.*^ And if the seller transmits the bill of exchange and the bill of lading directly to the bu>er, upon condition that he is not to retain the bill of lading unless he honors the bill of excliange, the buyer is bound to return the bill of lading if he does not comply with the condition; and if he Avrongfully retains the bill of lading the property in the goods does not pass to him." ilore frequently still, the seller oT?tains a discount of the bill of exchange from a banker to whom he delivers it with the indorsed bill of lading attached. T'nder these circum- stances, the banker acquires a special property in the goods to secure his advances, and the appropriation of the goods to the contract is conditional upon the buyer s payment of the bill of exchange,*^ but upon payment or tender by him the property vests in him. 4 5 ilirabita v. Imperial Ottoman Bank, 3 Exch. Div. Iii4, per Cotton, L. J.; Shepiierd v. Harrison, L. R. 4 (j. B. 19G; Id. 493, in the house of lords, L. R. 5 H. L. IIG; Oss v. Shuter, 1 ('. P. Div, 47: Alderman v. Eastern R-. R.. 115 Mass. 2o:j; Farmers' & Mechanics' Nat. Bant: v. IjO^an, 74 N. Y. 568, 578; Seeligson v. Philbrick, 30 Fed. CdO; Jones v. Brewer, 70 Ala. 545. A bill of lading deliverable to order, when attached to and forwarded with a time draft, without special instructions, to an agent, for collection, ma.v be surrendered to the drawee on acceptance of the draft. X;itioual Bank of Commerce v. Merchants' Nat. Bank, of Memphis. 91 U. S. '.(2. But where the seller delivered goods to a carrier, consigned to the buyer, and took a shipping receipt in the name of the buyer, which he sent with a di'aft to a bank, with directions to deliver the receipt on acceptance of the draft, a finding that the projierty passed to the buyer on delivery to the carrier was warranted. Wigton v. Bowley, 130 Mass. 252. ie Shepherd v. Harrison, L. R. 4 Q. B. 19G; Id. 493, L. R. 5 H. L. 110, 133, per Lord Cairns; Cayuga County Xat, Bank v. Daniels, 47 X. Y. 631. Where the seller deposited in the mail, directed to the buyer, an unindorsed bill of lading, attached to a draft for the price, the question whether the property had passed was for the jury. Alabama G. S. R. Co. v. Jit. Vernon Co., 84 Ala. 173, 4 South. .■{5(;. See Ex parte Banner, 2 Ch. Div. 278. 47 Mirabita v. Imperial Ottoman Bank. 3 Exch. Div. 104; Jenkyns v. Brown, 14 Q. B. 406, 19 Law J. Q. B. 2,S(1; Dows v. National Exchange Bank, 91 U. S. 018; Forty Sacks of Wool, 14 B'ed. c,43; First Nat. B.ank of Cairo V. Crocker, 111 Mass. 103; Fifth Nat. Bank of Chicago v. Bay ley, 115 Mass. 228; Bank of Rochester v. .Tones, 4 N. Y. 497; Farmers' & Mechanics' Nat. Bank v. Logan, 74 N. Y. 508; Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. St. 155; Emery v. Irving Nat. Bank, 25 Ohio St. 300; Halsey v. Warden, 25 Kan. 128; Merchants' Exchange Bank v. Mc(;raw, 8 C. C. A. 420, 59 Fed. 972. 108 MISTAKE, FAILURE Off CONSIDERATION, AND FRAUD. [Cll. 5 CHAPTER V. MISTAKE, FAILURE OF CONSIDERATION, AND FRAUD. 57-58. Mistake. 59. Failure of Consideration. 60-61. Fraud. 62-66. Election to Affirm or Rescind for Fraud. 67-69. Fraud on Creditois. 70. How Far Delivery is Essential to the Transfer of the Property against Creditors and Purchasers. MISTAKE. 57. The effect of mistake, when it has any operation at all, is to render the contract void. 58. A person -who has entered into a contract of sale, void on the ground of mistake, may, if it is still execu- tory, repudiate it, and successfully defend an action upon it. If he has paid money or delivered goods under the contract, he may, upon returning -what he has received under it, recover the money or the goods. As has been previously explained, when a contract has been entered into by the parties undi.T a material mistake of fact of such a character that there was no mutual assent, the contract is void."- The effect of the mistake is to prevent the contract from ever coming into existence, and hence to prevent its enforcement. A party to such an apparent agreement may wait until the other party seeks to enforce it, and then asseit its nullity by way of defense; or he may, if he ]nefers, come f(ir\\ard actively as plaintiff.- If 1 Ante, p. 28 et seq. It is sometimes said that a party to an apparent agree- ment, void by reason of mistake, may elect -^o treat it as subsisting, but, strictly speaking, the agreement which he so elects to treat as subsisting is a new agreement, based on the state of facts which he has subsequently discov- ered to exist. Pol. Cont. 450. 2 J-Ie may, where the facts warrant such a course, sue in equity to have the transaction declared void, and to be relieved from any possible claims In respect to it. Pol. Cont. i'M. Cll. 5] FAILURE OF CONSIDERATION. 109 the contract has been executed under a continuance of the mistake, a party who has performed his part may repudiate it on discovering his mistake, and may then recover the money paid or the goods delivered by him under the contract, unless he has done something to render impossible a restitutio in integrum; that is, a restora- tion of the other party to the condition he was in before the supposed contract was entered into.' In such a case the buyer can maintain an action for money had and received, and the seller can maintain an action of replevin; and, since the sale is void, the buyer acquires no title under it, and can pass no title, even to a bona fide purchaser.* FAILURE OF CONSIDERATION. 59. When the buyer has paid the price in ■whole or in part, and. the consideration for such payment totally fails, he may rescind the contract, and recover the money so paid. When the seller fails entirely to perform his part of the contract, the buyer may put an end to it, and recover in an action for money had and received any part of the price which he has advanced.-" In this respect, as will be seen, a greater effect is given to failure of performance on the part of the seller than on the part of the buyer.^ The same right of action arises in favor of the buyer when it turns 3 Cox V. Prentice, 3 Maule & S. 344; Grymes v. Sanders, 93 U. S. 55, 02; Harris v. Hanover Nat. Banlj, 15 Fed. 786; Benj. Sales, § 415, and see post, p. 121, where the same rule Is applied to rescission for fraud. Inasmuch as mistake, unlike fraud, renders the contract void, and not merely voidable, there can, strictly speaking, be no rescission but simply a repudiation of the supposed contract. i Chapman v. Cole, 12 Gray, 141; Rodliff v. Dallinger, 141 M.iss. 1, 4 N. E. 805; Alexander v. Swackhamer, 105 Ind. 81, 4 N. E. 433, and 5 N. E. 908. 5 Giles V. Edwards, 7 Term R. 181; Hill v. Rewee, 11 Mete. (Mass.) 268, 271; Miner v. Bradley, 22 Pick. 457, 458; Howe Jlach. Co. v. Willie, 85 111. 333; Benj. Sales, § 423. Money paid for shares in a projected company, which is not -formed, may be recovered back. Kempson v. Saunders, 4 Bing. 5. In some states the buyer may avoid the sale for breach of an express warranty. Post, p. 244. - Pest, p. 234. But see p. 2-10. no MISTAKE, FAILUIiE OF CONSIDERATION, AND FKAVD. [Cll. 5 out that the si^'ilei- had no title to the thing sold.'' S(i if the thing sold be a bill or noto or other seruiit y, and it turn out to be invalid because of forgery/ or material alteration," or for any other cause, "^^ the buyer may rescind for failure of consideration. So. on the sale of a patent, if the patent be void, the consideration fails.^^ But, thou.uh the thing sold turn out to be worthless, if it be what the buj-er intended to buy, tliere is uo failure of consideration. ^- T/iC Failure inu.it he Total. To authorize rescissiou, if the contract be entire, the failure of consideration must be total. The buyer is not obliged, indeed, to acci'pt a partial performance, and, if such performance only is tendered, he may rescind the contract, and recover back the price.^^ But, if he has acce])ted a partial performance, he cannot, at least without returning what he has received, afterwards rescind, but ' Post, p. 107. h .J cues V. Ryde, 5 Taunt. 4S8; Gurney v. Womersley, 4 El. & Bl. 133, 24 Law .7. Q. B. 40; Terry v. Bissell, 20 Conn. 23; Aldrieh v. Butts. ." K. I. 218; Mei-riam v. Wolcott, :; Allen. 2r>S. See, also, Whitney v. National Bank of rots.l;im, 4."> X. Y. :;o:;: Bell v. Da'jrc. on X. Y. .-,2s. Burcbfleld v. Moore. :! El. & Bl. Os:;. 23 Law J. n. B. 201. 1" iJompertz v. Bartlett, 2 El. \ Bl. S4!), 23 Liiw .L (). B. 05 (a bill of ex- cli:iiii;e purpoi-ting tn be a foreign bill, which turned ( ut to be a domestic liiU, and invalid because unstamped: AVoud v. Sheldon. 42 X. J. Law, 421 iserip illegally and fraudulently issued); Paul \. Citv of Kenosha. 22 Wis. 2.~i7 (bonds void for \vaiit of power in the citv tn issue tlieml. Bat in Lit- tauer v. Ci'ldniau. 72 X. Y. ."oi;, it Avas held that the buyer of a note v^id for usury <(iuld not verover fur failure of consideration. 11 Xash V. Liill. 102 Mass. 00; Harlow v. Putnam, 124 Mass. .",.":',; Shepherd v. .leul Iniv. he enuld not recover the purchase money on file ground that the consideration had failed. Begbie v. Phosphate Sew- age Co.. L. R. 10 Q. H. 491, affirmed in 1 Q. B. Div. 071). And see, also, T.iv- lor V. Hare, 1 Bos. & P. X. U. 20(.i; Lawes v. Purser, 6 El. & Bl. '.i30, 2t; Law J. Q. B. 2.J. 12 Lambert v. Heath, l.j ilees. A: W. 487; Bryant v. Pember, 4.j Vt. 487; Blattenberger v. Llolman. 103 Pa. St. o'jo; Xeidefer v. Chastain, 71 Ind. 303; Wheat V. Cross, 31 :\ld. 'J'.l 1- Giles V. Edwards, 7 Term R. 181. See Smith v. Lewis, 40 Ind. 9S. Ch. 5] FRAUD. Ill must sue for breach of the contract.^* If he has enjoyed part of the consideration, there can be no rescission.^ "* Nevertheless, al- though the contract be entire, if it is for a definite quantity of goods all of one quality at a fixed price per ton or pound, and the seller delivers only a part and makes default in delivering the remainder, it is held that the buyer who has advanced the price of the whole may recover back the price of the part which is deficient.^" In this case the entirety of the contract is broken by the concurrent act of the parties.^^ But, if the failure is merely as to the quality of a part of the goods, the buyer cannot rescind unless he rescinds as to the whole.^^ FRAUD. 60. When a party to a contract of sale has been induced to enter into it by the fraud of the other party, the con- tract is voidable at his option. 61. CHARACTERISTICS— Fraud is a false representa- tion of fact, made with a knowledge of its falsehood, or in reckless disregard whether it be true or false, with the intention that it shall be acted upon by the complain- ing party, and actually inducing him to act upon it. Fraud renders all contracts voidable both at law and in equity. A man is not bound by a contract to which his consent has been obtained by fraud, because but for the fraud he would not have con- ■ sented.^* liHarnor v. Groves, ir, C. B. 009, 24 Law J. C. P. 53; Miner v. Bradley, 22 Pick. 457; Clark v. Baker, 5 Jletc. (Mass.) 4.">2. 15 Taylor v. Hare, 1 Bos. & P. N. R. 2(!0; Lawes v. Purser, G El. X- Bl. 930, 20 Law J. Q. B. 25; Benj. Sales, § 427. 16 Devaux v. Conolly, 8 C. B. 040; Hill v. Rewee, 11 :Metc. (Mass.) 2GS, 272. This is in the nature of a total failure of consideration for part of the price paid, not a partial failure for the whole. Benj. Sales, § 420. As to what constitutes a severable contract, see Nurris v. Harris, 15 Cal. 226; McGratli v. Cannon (Minn.) 57 N. W. 150; Potsdamer v. Kruse (Minn.) 58 N. W. 983. ,17 Mansfield v. Trigg, 113 Mass. ;:!50, ;J.-.2, per ^^•ell,s. J. isHarnor v. Groves, 15 C. B. 009, 24 Law J. C. P. .^>3; Clark v. Baker, 5 Mete. (Mass.) 452; Morse v. Brackett, 98 Mass. 205, 104 ilass. 494; Mansfield V. Trigg, 113 Mass. 350. 18 Benj. Sales, § 428 et seq. 112 MISTAKE, FAILURE OE CONSIDEEATION, AND FRAUD. [Ch. 5 Fraud is commonly said to be so subtle in its nature and mani- fold in its forms as to be impossible of definition. Nevertheless the statement of its essential characteristics which has been given above in the language of Sir William E. Anson -" sufficiently indi- cates the nature of such fraud as will render voidable a contract of sale. The same state of facts which is ground for avoidance also gives rise to an action at common law for deceit, in which the defrauded party may recover sncli dainages as he has suffered by reason of the false representation. And a practical test of fraud, as opposed to misrepresentation AAliich is not fraudulent, is that the first does, and the second does not, give rise to an action ex delicto. ^^ Fraud is a FdUc Rcprcseidatinn. A mistaken belief in the fads may be created by ai-tive means, as by fraudulent concealment or misrepresentation, or passively, by mere nondisclosure. But it is only when a man is under some obligation to disclose facts that mere silence will be considered as a means of deceiition. In contracts of sale, disclosure is not ordi- narily incumbent on the parties.^- The rule is caveat emptor. It has even been held that the seller is under no obligation to com- municate the existence of latent defe