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There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924022471142 NOTES AND COMMENTAEIES ON THE SALE OF GOODS ACT 1893 Printed byH.&R. CiJ^K, Limited FOE William Gbeen & Sous Agents m imido^SwEET & Maxwell, Limited Agents m Glasgow-Joss Smith & Son NOTES AND COMMENTAEIES ON THE SALE OP GOODS ACT 1893 [56 & 57 Vict. Ch. 71] WITH SPECIAL EEFERENCE TO THE LAW OF SCOTLAND BY RICHARD BROWN MEMBER OF THE FAOULTT OF PBOOUEATOBS, GLASGOW ; PKOPESSOR OF MBROANTILB LAW, ST. MUNGO's COLLEGE, GLASGOW EDINBURGH WILLIAM GEEEN AND SONS 1895 'B7^307 INTKODUCTOEY NOTE. Since the Sale of Goods Act became law two excellent works have appeared explaining its provisions — one by Judge Chalmers of Birmingham, the draftsman of the measure ; the other, a more extended work, by Messrs. Ker and Pearson- Gee. These set forth the law of sale in England as codified with only trifling alterations in the Act ; but neither of them professes to deal, except inci- dentally, with the law of Scotland, or makes any attempt to explain the important and almost revolutionary changes made by the Act upon the principles and practice of the Scottish law of sale. As I had the honour, while the bill was passing through Parliament, to be associated to some extent with the learned draftsman in an endeavour to adapt the measure to Scottish requirements, I have since felt it my duty to follow up these efforts by an explanation of the bearing of the Act upon Scottish law. Another reason for the present publication is, that apart from statutory change, there seemed a distinct call for a modern treatise on the subject of sale in Scotland. The only Scottish work on sale was that of Mr. M. P. Brown, published in 1821, which, notwithstanding its general excellence, necessarily failed to throw light on many im- portant and intricate questions. It can scarcely be claimed for the little work of Professor Bell, published posthumously SALE OF GOODS ACT 1893. in 1844, that it added anything of importance to the Scottish aspect of the law of sale, or that it now adequately represents the law either of Scotland or England. Instead of summarising here the changes made by the Act upon the law of Scotland, or the differences still existing between the law of sale in England and Scotland, I have noted these changes and differences under separate headings in the General Index. The English law of sale has been enriched by the treatises of Lord Blackburn and Mr. Benjamin, both of which have been freely used in the preparation of this work The citations from Blackburn refer to the second edition, and those from Benjamin to the fourth edition. EICHAED BEOWK 138 West Gboegb Street, Glasgow, Jwne, 1895. CONTENTS. IKTRODUCTORY NOTE TABLE OF CASES PAET I. FORMATION OF THE CONTRACT. Contract of Sale. SECT. 1. Sale and Agreement to Sell . 2. Capacity to But and Sell Formalities of the Contract. PAGE V 3. Contkaot of Sale, how made ... 16 4. Gonteact of Sale fob Ten Pounds and upwards 24 Subject Matter of Contract. 5. Existing or Future Goods ... 27 6. Goods which have Perished . . 31 7. Goods Perishing before Sale but after Agreement to Sell . . . . . 34 Tfi£ Price. 8. Ascertainment of Price . 35 9. Agreement to Sell at Valuation , . 41 6 SALE OF GOODS ACT 1893. Conditions and JVarranties. sect. paoe 10. Stipulations as to Time ... .44 11. When Condition to be treated as Warranty . 49 12. Implied Undertaking as to Title, etc. . 57 13. Sale by Description .... 62 14. Implied Conditions as to Quality ok Fitness . 66, Sale by Sample. 16. Sale by Sample . . . .73 PAET II. EFFECTS OP THE CONTRACT. Transfer of Property as between Seller and Buyer. 16. Goods must be Ascertained ..... 78 17. Property passes when intended to pass . . 79 18. Rules for ascertaining Intention . . 85 19. Reservation op Right of Disposal . . 98 20. Risk prima facie passes with Property . 104 Transfer of Title. 21. Sale by Person not the Owner , . . 109 22. Market Overt . . 112 23. Sale under Voidable Title . . .114 24. Revesting of Property in Stolen Goods on Conviction OF Offender ...... ng 25. Seller or Buyer in Possession after Sale. II9 26. Effect of Writs of Execution .... 127 PAET III. PERFORMANCE OF THE CONTRACT. 129 27. Duties of Seller and Buyer ..... ^_„ 28. Payment and Delivery are Concurrent Conditions . 130 29. Rules as to Delivery . ... 135 CONTENTS. sect. page 30. Delivery of Wrokg Quantity . 140 31. Instalment Deliveries ...... 147 32. Delivery to Carrier . .... 156 33. Risk where Goods are Delivered at Distant Place . 164 34. Buyer's Right of Examining the Goods . . 166 35. Acceptance . . ... 168 36. Buyer not bound to return Rejected Goods . . 172 37. Liability of Buyer for Neglecting or Refusing Delivery OF Goods ..... . 176 PAET IV. EIGHTS OF UNPAID SELLER AGAINST THE GOODS. 38. Unpaid Seller Defined . 180 39. Unpaid Seller's Rights . . 183 40. Attachment by Seller in Scotland . .189 Unpaid Seller's Lien. 41. Seller's Lien . . . 190 42. Part Delivery . . 197 43. Termination of Lien . . . 198 Stoppage in transitu. 44. Right of Stoppage in transitu . 201 45. Duration of Transit . . . 209 46. How Stoppage in transitu is Effected . . . . 224 Re-sale hy Buyer or Seller. 47. Effect of Sub-sale or Pledge by Buyer . . 227 48. Sale not generally Rescinded by Lien or Stoppage 'in transitu ... ... 229 PAET V. ACTIONS FOR BREACH OF THE CONTRACT. Remedies of the Seller. 49. Action for Price 234 50. Damages for Non-acceptance .... 237 SALE OF GOODS ACT 1893. Remedies of the Buyer. SECT. PAGE 51. Damages foe Non-delivery . 240 52. Specifio Performance . . . 248 53. Remedy fok Breach of Warranty . . . 251 54. Interest and Special Damages . 255 PAET VI. SUPPLEMENTARY. 55. Exclusion of Implied Teems and Conditions . 257 56. Reasonable Time a Question of Fact . 261 57. Eights and Duties undek Act enforceable by Action . 262 58. Auction Sales ... ... 263 59. Payment into Court in Scotland when Breach of War- ranty Alleged ... . 266 60. Repeal . . 268 61. Savings . . . 269 62. Interpretation of terms . . . 283 63. Commencement . . . 289 64. Short Title . . 289 Schedule 290 APPENDIX I. STATUTES. Excerpts from The Statute of Frauds (1677, 29 Car. II. 0. 3) . . 291 Excerpt from Lord Tenterden's Act, 1828 (9 Geo. IV. c. 14) . . 292 Bills of Lading Ad, \?i55 {!&■ k \^ yiat. 0. 1\\) . . .293 Preamble and Repealed Sections of Mercantile Law Amendment Act, Scotland, 1856 (19 & 20 Vict. c. 60) . . . . 294 Excerpt from Merchandise Maries Act, 1887 (50 & 51 Vict. c. 28) 296 Fcustors Act, 1889 (52 & 53 Vict. u. 45) . . . 296 Factors {Scotland) Act, 1890 .... qqo Excerpts from Stamp Act, 1891 (54 & 55 Vict. c. 39) . 3O2 Excerpts from Merchant Shipping Act, 1894 (57 & 58 Vict. c. 60) . 307 CONTENTS. APPENDIX II. DIGEST OF SCOTTISH CASES ILLUSTRATIVE OF POSSESSION OF MOVEABLES AND ITS LEGAL EFFECTS. PAGE 1. Nature and Requisites of Possession . \ 312 2. Rule that Possession of Moveables presumes Property . 314 3. Exceptions to Presumption of Property . 321 4. Civil Possession through Third Parties 332 Summary of Appendix II . . . . 337 Alphabetical List of Cases in Appendix II. . . 338 APPENDIX III. NOTES. English Doctrine of Consideration . 343 History of the Statute of Frauds . • 345 GENERAL INDEX . • 353 TABLE OF CASES. English cases are distinguished by an Asterisk. The paging of cases discussed or mentioned in the text is d^enoted by Black Figures. A A. V. B. (1682), 12. *Abbott V. Wolsey (1895), 26, 169. Abercromby v. Story (1687), 321. Aberdeen, Treasurer of, v. Gordon (1760), 38. *Acebal v. Levy (1834), 36. *Acraman v. Morrice (1849), 94. Adam v. Adam's Trustee (1894), 323. Adam v. Sutherland (1863), 323. Adams v. Pattison and Co. (1884), 71. Adamson v. Smith (1799), 54, 60, 69, 254. Adamson, Howie, and Co. v. Guild (1868), 228, 232, 334. Ainslie v. Murray (1881), 88. Aiton V. Fairie (1668), 56. *Aldridge ■;;. Johnson (1857), 78, 98. Alexander v. Black (1816), 325. *Alexander u Brown (1824), 191. ♦Alexander v. Gardner (1835), 98, 130. Allans «. Gilchrist (1875), 18, 240, 251. *Allan V. Lake (1852), 63. Allan and Co.'s Trustees v. Gunn and Co. (1883), 47, 278, 319, 326, 332. Allan, Steuart, and Co. v. Stein's Creditors (1789-1790), 204, 214, 215, 217, 224, 232, 273, 320, 335. See also Jaffrey v. Allan, Stewart, and Co. Allason v. Watson (1757), 287. Alston V. Orr (1668), 54. Alston's Trustees v. Royal Bank (1893), 276. Amaan v. Handyside and Henderson (1865), 55. Anderson v. Anderson's Trustee (1892), 315. Anderson v. Buchanan (1848), 81, 82, 315. SALE OF GOODS ACT 1893. Anderson v. Ford (1844), 317, 328. Anderson v. Goddart and Co. (1809), 244. ♦Anderson v. Morice (1876), 79, 94. Anderson u Morris (1854), 131. Anderson and Crompton v. Walls and Co. (1870), 90, 91, 108. Anderson v. M'CaU (1866), 4, 195, 317. Anderson v. Stewart (1814), 266. Anderson v. Wilson (1856), 37. Anderson u M'Dowal (1865), 181, 182. Andrew v. Ross, Park, etc. (1810), 108, 162. Arbuthnott v. Paterson (1798), 316. Armstrong and Co. v. Maogregor and Co. (1875), 63, 260. Arnot 1;. Stewart (1817), 162. Arnot V. Watt (1825), 260. Arnots v. Boyter (1803), 102, 334. Arthur v. Hastie and Jamieson (1770), 5, 332. See Hastie and Jamieson v. Arthur. *Ashu Abdy(1678), 348. Athya v. Buchanan and Son (1872), 271. Athya and Co. v. Kowell and Co. (1856), 38, 236, 261. *Atkinson v. Bell (1828), 96, 98. Attwood V. Kinnear(1832), 318.- Auld V. Hall and Co. (1811), 92, 334. *Austen v. Craven (1812), 78. Aytoun i>. Stoddart (1882), 23. *Azemar v. Casella (1866), 63, 64. B *Bailey v. Gouldsmith(l790), 95. Bailey and Co. v. Paterson (1828), 57. Baird v. Aitken (1788), 54. Baird v. Charteris (1686), 57. Baird v. Montgomery (1688), 23. Baird v. Pagan (1765), 69. Baird v. Reilly (1856), 239, 245. Baird's Trustees v. Baird (1877), 148. Balfour v. Laing (1852), 333. *Banner, Ex paHe (1876), 103. Barclay v. Anderston Foundry Co. (1856), 152. Barclay and Brand v. Guild (1876), 81. *Barnes v. Toye (1884), 15, 16. *Barningham v. Smith (1874), 248. *Barr v. Gibson (1838), 32, 33, 70, 73. Barr v. Waldie (1893), 153. Barr and Shearer v. Cooper (1873), 313. Batchelor's Trustee v. Honeyman (1892), 22. *Baumann v. James (1868), 26. * TABLE OF CASES. Baxters. Pearson (1807), 207, 222, 336. *Beer v. Walker (1877), 70, 165. Beesley and Co. u M'Ewen (1884), 108. *Behn v. Burness (1862), 45. Bell V. Andrews (1885), 323. Bell v. BeU (1841), 240. Bell V. Queensberry's Executors (1824), 60. Bennoch v. M'Kail (1820), 56. Bentley v. Vilmont (1887), 118. Bentsen v. Taylor, Son, and Co. (1893), 46. Benton v. Craig (1864), 317. *Berndtson v. Strang (1867-1868), 202, 222. *BetheU v. Clark (1887-1888), 219. Bertrams v. Barry (1818), 37. Beveridge v. Indwellers in Cupar (1583), 324. ♦Beverley v. Lincoln Gas Co. (1837), 17, 95. *Bigge V. Parkinson (1862), 69, 73. *Bird V. Brown (1850), 208, 212. Birnie and Co. u Weir (1800), 254. Birrell's Trustee v. Clark and Rowe (1874), 331. ♦Bishop V. Crawshay (1824), 98. ♦Bishop V. Shillito (1819), 132. Black v. Cassels (1828), 211, 336. Black V. Incorporation of Bakers (1867), 88, 90, 91, 139, 187, 207, 326, 333. Black V. Shand's Creditors (1823), 23. ♦Bloxam v. Sanders (1825), 131, 192, 215. Blumer and Co. v. Scott and Sons (1874), 252. Boak V. Megget (1844), 81, 82, 317. Bogle V. Dunmore and Co. (1787), 102, 332. ♦Bolton V. Lancashire and Yorkshire Railway Co. (1866), 211. Booker and Co. u Milne (1870), 220, 226, 232, 331. ♦Borrowman v. Drayton (1876), 63. ♦Borrowman u Free (1878), 98. Borthwick v. Grant (1829), 317. Boswall u Morrison (1812), 243. ♦Bourne v. Gatliflf (1844), 258. Bovill u Dixon (1854), 326. 6'ee Dixon v. Bovill. ♦Bowes V. Shand (1877), 49, 63. ♦Boyd v. SifFkin (1809), 45. Bradley and Co. u G. & W. Dollar (1886), 56. ♦Bragg V. Cole (1821), 143. ♦Brandao v. Barnett (1846), 261. ♦Brandt v. Lawrence (1876), 150. Brandt and Co. v. Dickson (1876), 48, 102, 103, 328. ♦Brawley v. United States (1877) {America'ri), 145. Breichan i). Muirhead (1810), 314. ♦Bret V. J. S. and Wife (1600), 344. SALE OF GOODS ACT 1893. Brewer and Co. v. Duncan and Co. (1892), 108, 313. *Bridge v. Wain (1816), 70. Brisbane v. Merchants of Glasgow (1684), 56. ^British American Telegraph Co. v. Colson (1871), 19. *BrocHesby v. Temp. Building Society, etc. (1895), 123, 133. Brodie v. Todd and Co. (1814), 48, 102, 316. *Brogden v. Marriott (1836), 38. *Brogden v. Metropolitan Eailway Co. (1877), 17. Broughton v. Aitchisons (1809), 79, 195, 325. Brown v. Brown (1891), 22. *Brown v. Edgingtou (1841), 64, 68, 70. Brown v. Fleming (1850), 315. Brown v. Gilbert (1791), 56. *Browne v. Hare (1859), 98, 99, 102. *Brown v. Hodgson (1809), 157. Brown v. Laurie (1791), 54. *Browns v. Law (1895), 164. Brown v. M'Connell (1876), 260. Brown v. Marr, Barclay, etc. (1880), 94, 95, 116, 318 *Brown'y. Muller (1872), 248. Brown v. Somerville (1844), 186. Brown v. Watson (1816), 216, 220, 331. Browne and Co. v. Ainslie and Co. (1893), 190. Brownlie v. Miller (1880), 55. Bruce v. Jack (1670), 23. Bruce v. Mackenzie (1821), 56. *Bruno, Silva, and Son, In re (1887), 222. *Bryan v. Lewis (1826), 31, *Bryans v. Nix (1839), 98. Bryce v. Graham (1828), 11. Brydon v. Muir (1869), 271. Buchanan v. Cochrane and Swan (1764), 102, 332. *Buckmani;. Levi (1813), 158, 160. *Buddle V. Green (1857), 29, 139. *Bull V. Eobison (1854), 166. *Buller V. Crispe (1703), 126. *Bunney v. Poyntz (1833), 182, 197. *Burdett, Ex parte Byrne (1888), 85. *Burnley v. BoUett (1847), 70. Burns v. Bruce and Baxter (1799), 312. *Busk V. Davies (1814), 78. *Byrne v. Van Tienhoven (1880), 20. C Caithness v. Fleshers in Edinburgh (1629), 324. ♦Calcutta Co. v. De Mattos (1863), 90, 98, 109. Calder v. Aitchison and Co. (1831), 259. Calder v. Miller (1824), 20. TABLE OF CASES. Caledonian Ry. Co. v. Eankin (1882), 56, 174. *Camidge v. Allenby (1827), 183. Campbell v. Barry (1748), 108, 327. Campbell v. Christie (1682), 324. Campbell v. Grierson (1848), 22. Campbell v. Mason (1801), 69. *Campbell v. Mersey Docks Co. (1863), 78, 98. Campbell, Robertson, and Co. v. Shepherd (1776), 273, 330, Campbell, Ruthven, and Co. v. Brown (1803), 334. Cargill V. Somerville (1820), 315. Carnegie and Co. v. Hutchison (1815), 102, 331. Carruthers v. Bell (1812), 18. Carse v. Halyburton (1714), 316. Cars-well v. CoUard (1893), 130. ♦Carter v. Crick (1859), 77. Carter and Co. v. Campbell (1885), 54, 63, 68, 73. Cathcart v. Holland (1681), 21. Caves Case. &e Inglis v.. Royal Bank. ♦Chalmers, Ex f arte, (1873), 182, 192, 197. Chalmers v. Walker (1878), 23. Champion v. Milne (1811), 37, 38. ♦Champion v. Short (1807), 143. ♦Chandelor v. Lopus (1603), 69. ♦Chanter v. Hopkins (1838), 46, 70. ♦Chaplin v. Rogers (1800), 133. ♦Chapman v. Morton (1843), 178. Cheap u Cleugh (1713), 77. Cheap V. Cordiner (1775), 23. Christie v. Hunter (1880), 266. Chrysties v. Fairholmea (1748), 329. Clarke x. Hinde, Milne, and Co. (1884), 289. ♦Clarke v. Hutchins (1811), 158, 160. ♦Clarke v. Martin (1702), 125. ♦Clarke v. Spence (1836), 96. Clarke -w. Stewart (1872), 3. ♦Clarke v. Westrope (1856), 43, 44. Clarke and Co. v. Miller and Son's Trustee (1885), 48, 100, 102, 103, 318, 320. Clark and Co. v. West Calder Oil Co. (1882), 318. ♦Coates V. Railton (1827), 219. ♦Cochrane v. Entwistle (1890), 85. Cocker v. Crombie (1893), 251. ♦Cohen v. Foster (1892), 230. ♦Cole V. Kew (1848) (-Ammcan), 140. ♦Cole V. North-Western Bank (1875), 95, 110. Collins V. Marquis' Creditors (1804), 222, 223, 320, 330, 336. ♦Colonial Insurance Co. v. Adelaide Marine Insurance Co. (1886), 144, 146, 148. SALE OF GOODS ACT 1893. Colvin V. Short and Co. (1857), 45, 49, 102. Commercial Bank v. Beal (1890), 240. Connal and Co. v. Loder (1868), 139, 334. *" Constantia," The (1807), 202, 203. *Cooke V. Oxley (1790), 19, 265. *Cooper, ExpaHe (1879), 198, 223. *Cooper V. Bill (1865), 94, 199. Cooper V. Green and Chatto (1791), 138, 161. *Cooper V. Shuttleworth (1856), 43. Cooper and Aves v. Clydesdale Shipping Co. (1863), 69, 73. *Coote V. Jecks (1872), 84. Corbet v. Stirling (1666), 316. Cossar and Co. v. Marjoribanks (1826), 56. *Cothay v. Tute (1811), 158. *Cory V. Thames Ironworks Co. (1868), 256. *Cort V. Ambergate Railway Co. (1851), 131. Oouston V. Miller (1862), 12. Couston, Thomson, and Co. v. Chapman (1872), 53, 56, 64, 76, 77, 171, 175, 264. ♦Couturier v. Hastie (1856), 31, 32. Cowan V. Perry (1804), 323. Cowan V. Spence (1824), 81, 276, 328. Cowbrough and Co. v. Robertson (1879), 23. Craig and Co. v. Hamilton (1823), 130. *Crawshay v. Eades (1823), 222. Cree v. Durie (1810), 266. Croan v. Vallance (1881), 56, 71. Cropper and Co. v. Donaldson (1880), 81, 276, 318. ♦Cross V. Eglin (1831), 146. *Cumming v. Shand (1860), 258. *CunMe v. Harrison (1851), 98, 141, 146. *Currie v. Misa (1875), 183, 343. ♦Curtis V. Hannay (1800), 33. Cuthbertson v. Lowes (1870), 37. Cuthillu M'Lachlan (1874), 235. D ♦Danube and Black Sea Railway Co. v. Xenos (1863), 248. Darling v. Wilson's Trustee (1887), 279, 326. ♦Davies v. Maclean (1873), 130. ♦Dawes v. Peck (1799), 158. Dawson v. Muir (1851), 39. ♦De Mattos v. Great Eastern Steamship Co. (1885), 256. ♦Derry v. Peek (1889) 272, 273, 274, 288. Dick V. Thom (1829), 159. ♦Dickinson v. Dodds (1876), 19, 265. ♦Dickinson v. Shee (1801), 191, TABLE OF CASES. *Dixon V. Baldwin (1804), 219. Dixon V. Bovill (1856), 326. Dickson v. Henderson (1849), 245. Dickson v. Singer Manufacturing Co. (1886), 316. *Dixon V. Yates (1833), 78, 90, 96, 195, 197, 199, 210. Dixon, Ltd. v. Jones, etc. (1884), 166. Dickson and Co. v. Kincaid (1808), 54, 69. Dicksons and Co. v. Ponton (1824), 159. Dimmack v. Dixon (1856), 326. Distillers Co. v. Eussell and Co.'s Trustee (1889), 88, 92, 195, 335. Debbie v. Duncanson (1872), 55. *Dodsley v. Varley (1840), 199. *Doggett V. Vowell (1602), 344. Don V. Lippman (1837), 24. Douglas V. Grierson (1794), 23. ♦Douglas V. Patrick (1790), 191. Drake v. M'Millan (1807), 220, 222, 330, 336. Drew v. Ogilvy, Heggie, and Co. (1833), 130. *Drummond u Van Ingen (1887), 75. Dryden and Co. v. Hamelin and Co. (1853), 317. Dufif V. Brown (1817), 88, 327. Duflf and Co. v. Iron, etc.. Buildings Co. (1891), 245. Dunbar u Harvie (1820), 129. Duncan v. Aitobison and Co. (1879), 39. *Duncan v. Topham (1849), 137. Duncanson v. Jefferis' Trustee (1881), 328. Duncanson and Henderson v. Maver and Son (1894), 316. *Duncombe u Brigbton Club (1875), 237. ♦Dunkirk Hill Colliery Co. v. Lever (1878), 238, 246. Dunlop v. Crawford (1886), 71. Dunlop V. Crookshanks, etc (1752), 329 *Dunlop V. Grote (1845), 131, 236. Dunlop v. Higgins (1848), 19, 20, 239, 245. Dunlop v. Lambert (1839), 108, 158, 327. Dunlop V. M'Kellar (1815), 247. Dunlop u Scott and Co. (1814), 208, 212, 336. Dunlop and Co. v. Dalbousie (1830), 113. Dunmore v. Alexander (1830), 20. Dutbie V. Aitken (1893), 21. Dutbie u Carnegie (1815), 55. *Dutton V. Solomonson (1803), 98, 199. E Eadib v. Mackinlay (1815), 92, 139, 334. Eadie v. Young (1815), 81, 134, 322, 325. ♦Eastwood V. Kenyon (1840), 344. Edmond v. Mowat (1868), 84, 315. SALE OF GOODS ACT 1893. Edinburgh and Glasgow Eailway Co. v. Marshall (1853), 43. Edinburgh and Leith Brewing Co. v. Eeid (1861), 56. Edinburgh United Breweries Co. v. Nicholson's Trustee (1894), 38, 274. Ehrenbacher and Co. v. Kennedy (1874), 320. *Eichholz V. Bannister (1 864), 58. Elder v. Allen (1833), 133, 286. *Elliot V. Pybus (1834), 98. *Elliott V. Thomas (1838), 143. *Ellis V. Hunt (1789), 133, 216. *Elphick v. Barnes (1880), 95. Elton, Hammond, and Co. v. Porteous and Dewar (1808), 162. *Emmerson v. Heelis (1809), 264. *Emmerton v. Matthews (1862), 70. *Ess V. Truscott (1837), 43. Ewart V. Murray (1730), 22, 23. Fairib v. Inglis (1669), 39, 57. *Falk, Ex parte (1880), 226. *Farrer v. Nightingal (1798), 33. Faulds V. Corbet (1859), 266. Faulds V. Townsend (1861), 112. *Peise V. Wray (1802), 183. Ferguson v. Forrest (1639), 324. Ferguson v. FyfFe (1868), 3. Fergusson v. Officers of State (1749), 314. *Fielder v. Starkin (1788), 55. Fife's Trustees (Earl of) v. Snare (1849), 314. *Finch V. Brook (1834), 191. Findlay v. Donaldson (1846), 268. Fisher v. Ure (1836), 23. *Fisher ■;;. Samuda (1807), 55. Fleet Brothers v. Morrison (1854), 108, 162. Fleming v. Smith and Co. (1881), 4, 194, 196, 228, 333. Fleming and Co., Ltd. v. Airdrie Iron Co. (1882), 56. *Fletcher v. Tayleur (1855), 256. *Foakes v. Beer (1884), 344. Forbes v. Campbell (1885), 49, 129, 138, 176. Forbes v. Mains and Co. (1752), 330, 336. *Ford v. Yates (1841), 258. Forrester v. Warin and Craven (1877), 233, 235 239 247 Forsyth v. Kilpatrick (1680), 324. ' Fotheringham v. Somerville and Co. (1809), 222 330 337 *Fragano v. Long (1825), 79, 98, 130. ' ' Eraser v. Frisby (1830), 317. Eraser and Co. v. Outram and Co. (1834), 56, 143. TABLE OF CASES. *Freeth v. Burr (1874), 150, 151. *Frost V. Knight (1872), 248. Fulton V. "Watt (1850), 69. Fyfe V. Woodman (1841), 322. G *Gabaeron v. Kreeft (1867), 78. Galbraith v. Lesly (1676), 14. Galletly v. Child (1824), 143. ♦Gardiner v. Gray (1815), 63, 64, 70, 77. Gardiner v. M'Leavy (1880), 4, 71, 178, 258. Gardner v. Tenant (1677), 12. *Gath V. Lees (1865), 98. *Geipel ■;;. Smith (1872), 33. Gibb V. Walker (1751), 18. ♦Gibson v. Bray (1817), 94. ♦Gibson v. Carruthers (1841), 204. Gibson v. Forbes (1833), 88, 134, 326. Gibson v. Maguire (1876), 259. Gibson v. May (1841), 317. Gillespie v. Miller, Son, and Co. (1874), 33. Gillespie and Co. v. Howden and Co. (1885), 45. Gilmer v. Galloway (1830), 69. ♦GHmour v. Supple (1858), 80, 90, 94. Girdwood and Co. v. PoUock, Gilmour, and Co. (1827), 223, 328. Glendinning's Creditors v. Montgomery (1745), 312. Gobbi V. Lazzaroni (1859), 23. *Godts v. Rose (1855), 98, 104. ♦Godwin u Francis (1870), 26. ♦Golding, Davis and Co., Ex parte (1880), 210 229. ♦Goldman v. Koenig (1894), 119. Gordon u Earl of GaUoway (1629), 16. Gordon v. Gardiner (1784), 320. Gordon v. Menzies (1687), 113, 325. Gordon v. Scott (1773), 56. ♦Gough V. Wood and Co. (1894), 110. Gourlay v. Hodge (1875), 329. Gourlay, etc. v. Watt (1870), 272. Gowans v. Christie (1873), 45. Gowans v. Phin (1813), 331. Gracie ■;;. Pulsometer Engineering Co., Ltd. (1887), 323. Graham v. Wilson (1836), 46. Graham and Co. v. PoUock and Caldwall (1763), 18, 43, 129. Grant v. Dumbreck (1792), 56. Grant v. Smith (1758), 133, 286, 325. ♦Grantham v. Hawley (1615), 30. ♦Graves v. Weld (1833), 286. SALE OF GOODS ACT 1893. Gray v. Oowie (1684), 325. *Gray v. Cox (1825), 64. Gray v. Hamilton (1801), 55. Gray and Co. v. Farquhar (1823), 322. Grey v. Stewart (1753), 266. *Greaves v. AsMin (1813), 179. ♦Greaves v. Hepke (1818), 88. *Gr^bert Borgnis v. Nugent (1885), 247, 256. Grieve, Son, and Co. v. Konig (1880), 49. ♦Griffiths V. Perry (1859), 189. *Grimoldby v. Wells (1875), 168, 172, 175. ♦Guardians of Lichfield v. Green (1857), 183. *Gunn V. Bolckow, Vaughan, and Co. (1875), 125, 183. Gunterand Co. v. Lauritzen (1894), 247. ♦Gwilliam v. Daniel (1835), 145. H ♦Hadlbt «. Baxendale (1854), 239, 246, 247, 256. Haig v. Napier (1813), 137. Hain v. Laing and Sons (1853), 233, 266. *Hale V. Eawson (1858), 30. *Hall V. Conder (1857), 57. Hall and Co. v. Armstrong (1823), 108. Hall and Sons v. Scott (1860), 131, 143, 144, 148, 212. Haltoun'y. Northesk (1672), 12. Hamilton u Barrow and Reynolds (1767), 221. Hamilton v. Dixon (1873), 335. Hamilton «. Gordon (1710), 21. Hamilton v. Hart (1830), 143. Hamilton 11. Bichard (1698), 18. Hamilton v. Robertson (1878), 71. Hamilton v. Western Bank (1856), 276, 333. Hamlyn and Co. v. Talisker Distillery (1894), 56. ♦Harnlyn and Co. r. Wood and Co. (1891), 257. ♦Hammond v. Anderson (1804), 88. ♦Hammond v. Bussey (1887), 239, 256. *Hammonds v. Anderson (1803), 198. Hannay v. Stothert (1788), 49. Hansen v. Craig and Rose (1859), 38, 89, 90, 91, 108. *Hanson v. Meyer (1805), 94. Hardie 11. Austin and M'Aslan (1870), 54, 71, 72. Hardie v. Smith and Simons (1870), 54, 71, 72. ♦Harding v. Davies (1825), 191. Harford Brothers and Co. v. Robertson (1831), 143. See Robertson V. Harford Brothers and Co. Harle v. Ogilvie (1749), 108. ♦Harman ■y. Anderson (1809), 199, 206. TABLE OF CASES. Hai'per's Creditors v. Faulds (1791), 186, 189. Hart and Gemmell v. Panton and Co. (1861), 324. *Hart V. Mills (1846), 146. Hastie v. Campbell (1857), 108, 163. Hastie and Co. v. Warden and Son's Trustee (1849), 333. Hastie and Jainieson v. Arthur (1770), 5, 332. *Hastings v. Pearson (1893), 95, 120. *Haule V. Hemyng (1617), 43. *Hawes v. Watson (1824), 199, 206. Hay V. Elliot (1639), 113. Hay V. Leonard (1677), 324. *Hayman v. Flewker (1863), 95. Heddle v. Baikie (1846), 240. *Heilbutti;. Hickson (1872), 75, 168, 175. Heiman v. Hardie and Co. (1885), 129. *Helby i>. Matthews, etc. (1895), 18, 83, 120, 124. Henckell Du Buisson and Co. v. Swan and Co. (1889), 108, 165, 313. Henderson v. Gibson (1806), 324. Hendersons v. Stewart, etc. (1894), 276. Hendry v. Newton, Bennie, and Co. (1874), 265. Henry v. Dunlop and Co. (1842), 326. Henry v. Robertson and Sime (1822), 319. *Henthorn v. Eraser (1892), 20. Heritable Securities Investment Association v. Wingate's Trustee (1880), 276. Hesseltines v. Arrol and Co. (1802), 161. Hewat's Trustee ?). Smith (1892), 315. *Heyworth v. Hutchinson (1867), 253. *Hibblewhite v. M'Morine (1839), 31, 74. *Hiok u. Raymond and Reid (1893), 139. *Hickman v. Haynes (1875), 150. Higgin V. Pumpherston Oil Co., Ltd. (1893), 143, 152, 153. Higgins V. Dunlop (1847), 19, 239. Bee Dunlop v. Higgins. Hill V. Pringle (1827), 54. Hills V. Buchanan (1786), 48, 77, 102, 316, 330. *Hitchcock v. Giddings (1817), 29. *Hoadley v. M'Laine (1834), 18, 36. *Hoare v. Rennie (1859), 144, 150, 151. *Hoohster v. De la Tour (1853), 248. Hog V. Hamilton (1679), 321. Hogarth v. Smart's Trustee (1882), 100, 101, 328. Hogg v. Armstrong and Mowat (1874), 313. HoggiJ. Elliot (1877), 19. Hoggersworth v. Hamilton (1665), 57. Holman v. Peruvian Nitrate Co. (1878), 260. ^Holmes v. Twist (1614), 43. Home V. Atchison (1679), 314. *Honck V. Muller (1881), 144, 150, 151. SALE OF GOODS ACT 1893. Hoog V. Kennedy and Maclean (1754), 161. Hope V. Crookston Brothers (1890), 56, 57. ♦Hopkins u Hitchcock (1863), 63. Houldsworth 11. City of Glasgow Bank (1880), 55, 272. ♦Household Fire Insurance Co. v. Grant (1879), 19. *Howell V. Coupland (1874), 30, 35. Howie V. Anderson (1848), 248. *Hulse V. Hulse (1856), 3.44. ♦Humphries v. Carvalho (1812), 95. *Hunt V. Hecht (1853), 167. Hunter 1). Duff (1832), 18. Hunter v. Stevenson (1804), 12. Hunter •;;. Thomson (1843), 22. *Hurry v. Mangles (1808), 206. Hutcheson v. M'Donald (1744), 107, 108. *Hutchings v. Nunes (1863), 208. Hutchison and Co. v. Henry and Corrie (1867), 73, 74. ♦Hydraulic Engineering Co. v. M'Haifie (1878), 137, 239, 256. ♦Imperial Land Co. of Marseilles (Harris' Case) (1872), 19. ♦Imperial Loan Co. v. Stone (1892), 11. Inglis V. Anstruther (1771), 60. Inglisi). His Tutor (1701), 11. Inglis V. Port Eglinton Spinning Co. (1842), 220, 331. Inglis <;. Eoyal Bank (Cave's Case) (1736), 204, 214, 273, 274, 320 329. ♦Ireland v. Livingston (1872), 142. Ireland and Son v. Merryton Coal Co. (1894), 154. ♦Isaacson, Ex. parte (1894), 85. ♦Isherwood v. Whitmore (1843), 167, 170, 191. Jack v. Roberts and Gibson (1865), 18. Jackson v. Cowie and Sons (1872), 155. Jacobsen, Sons, and Co. v. Underwood and Son, Ltd. (1894) 20 Jacques, Serruys, and Co. v. Watt (1817), 131, 231 Jaffe 1!. Ritchie (1860), 63, 64, 68, 73, 75, 142. Jaffray v. Boag (1824), 56, 142, 143. Jaffray v. Carrick (1836), 323. Jaffrey 1;. Allan, Stewart, and Co. (1790), 204, 214, 215, 217, 224 232 *T ^''^'^'^^ ^^^- ^'' ^^^^°' Steuart, and Co. v. Stein's Creditors' ♦James v. Griffin (1837), 211, 220, 225, 226. Jardine v. Elliot (1803), 12. Jardine 1;. Pendreigh (1869), 172. ♦Jenkins 1). Beetham (1854), 46. ♦Jenner v. Smith (1869), 78, 98. TABLE OF CASES. *Jeremy v. Goochman (1596), 344. *Johnson v. Macdonald (1841), 45. *Johnsoii V. Raylton (1881), 28, 65, 66, 68. Johnson and Reay v. NicoU and Son (1881), 28, 65, 68. Johnston u Brown (1823), 12.^ Johnston v. Clark (1854), 12. ' Johnston v. Maitland (1782), 15. Johnston and Sharp v. Baillie (1815), 162. *Johnstone v. Marks (1887), 16. *Johnstone v. Milling (1886), 248. Johnstone v. Sprott (1814), 316. *Jones V. Bowden (1813), 70. *Jones V. Bright (1829), 64, 70. * Jones V. Gibbons (1853), 137, 139. *Jones V. Gordon (1877), 288. *Jones V. Jones (1841), 198. ♦Jones u Just (1868), 64. Jones and Go. v. Ross (1830), 159, 199. *Josling V. Kingsford (1863), 63, 64, 77. Jowett and Sons v. Stead (1860), 77, 173, 331. *Joyce V. Swann (1864), 36, 102. K Kelman v. Barr's Trustee (1878), 45. *Kemp v. Falk (1882), 197, 208, 226, 229. *Kendal v. Marshall, Stevens, and Co. (1883), 219. Kennard and Sons v. Wright (1865), 22. ♦Kennedy v. Panama Mail Co. (1867), 274. Ker V. Scot and Elliot (1695), 134, 316. Kerr v. Dundee Gas Co. (1861), 313. Kerr and Sons v. M'Dowall (1828), 64, 77. *Key v. Cotesworth (1852), 99. *Kibble V. Gough (1878), 26, 169. Kidd V. Brown (1828), 260. Kincaid v. Murray and Henderson (1798), 223. ♦Kingdom v. Cox (1848), 144, 147. ♦Kinloch u Craig (1790), 182. Kinneil v. Menzies (1790), 315. ♦Kirchiner v. Venus (1859), 260. ♦Knights V. Wiffen (1870), 200. ♦Laing v. Fidgeon (1815), 64, 70. Laing v. Western (1858), 55, 71. ♦Lamb v. Attenborough (1862), 95. Lamb v. M'Kenzie and Sons (1891), 54, 77. SALE OF GOODS ACT 1893. *La Neuville u Nourse (1813), 70. Lang u Bruce (1832), 325. Latta V. Park and Co. (1865), 39, 278. *Langton v. Higgins (1859), 30, 31, 98. Laurie v. Black (1831), 139, 332. Lavaggi v. Pirie and Sons (1872), 38, 43. Law V. Humphrey (1874), 265, 345. Lawson v. Milne (1839), 22. *Leask v. Scott (1877), 228. *Leatherdale v. Sweepstone (1828), 191. *Lee V. Butler (1893), 83, 120, 124. *Leeming v. Smith (1851), 145. Lees •;;. Dunwiddy (1707), 312. Leitch v. Berry (1819), 20. Leith Heritages Co. v. Edinburgh and Leith Glass Co. (1876), 57. *Leroux v. Brown (1836), 27. Leslie v. Miller (1714), 37. Lesly V. Hunter (1752), 324. Levitt v. Cleasby (1823), 334. *Levy V. Green (1859), 98, 146. *Liohfield, Guardians of, v. Green (1857), 183. Liddell's Trustee v. Warr and Co. (1893), 281, 327. *Lickbarrow -y. Mason (1793), 80, 101, 126, 160, 187. Lindsay v. Wilson (1771), 56, 69. Linn v. Shields (1863), 48, 143, 144, 148, 212, 242. Lippman v. Don (1836), 24. Sa Don v. Lippman. Little V. Dickson (1749), 59. *Llansamlet Tin Plate Co., Ex parte (1873), 248. Lochhead v. Graham (1883), 189. Lockhart, Petitioner (1862), 11. Lockhart v. Johnston (1742), 59. *Lockyer v. Jones (1796), 191. *Logan V. Le Mesurier (1847), 80, 94. Lombe v. Scott (1779), 56, 260. *London Joint Stock Bank v. Simmons (1892), 111. *Lorymer v. Smith (1822), 31, 74, 77, 168. Louson V. Craik (1842), 205, 208, 312, 322. Louttit's Trustees v. Highland Railway Co. (1892), 53. Love V. Kempt's Creditors (1786), 330. *Lucy V. MouiHet (1860), 168, 175. *Lunn V. Thornton (1845), 31. M Macandeew v. Hunter (1850), 23. M' Arthur v. Brown (1858), 317. M'Arthur v. M'Briar and Johnston's Trustee (1844), 20. TABLE OF CASES. Macartney u Macredie's Creditors (1799), 46, 47. M'Bain v. Wallace and Co. (1881), 6, 82, 84, 96, 97, 276, 277, 278, 279, 280, 281, 282, 332. M'Bey v. Gardiner (1858), 54, 56, 173. M'Bride u Hamilton (1872), 49. M'Carter v. Stewart and Mackenzie (1877), 64, 57. *M'Connal v. Murphy (1873), 145. M'Cormick and Co. v. Rittmeyer and Co. (1869), 52, 57. M'Caul's Trustees v. Thomson (1883), 315, 318. M'Caw, Stevenson, and Orr, Ltd. v. Maclaren and Sons (1893), 54. M'Clelland v. Rodger and Co. (1842), 102, 261. Macdonald i'. Western (1888), 94, 95, 116, 327. Macdonald and Fraser -y. Henderson (1882), 266. M'Dougall V. Campbell (1833), 23. Macdougall v. M'Nab (1893), 183. Macdougall v. Whitelaw (1840), 322. M'Eachern v. Ewing and Co. (1824), 260, 333. *M'Entire v. Crossley (1895), 83. M'Ewen and Co. v. Smiths (1849), 126, 206, 228, 334. M'Fadzen v. Harsewell (1802), 17. Macfarlane and Co. v. Taylor and Co. (1868), 64, 73. M'Gavin v. Stiirrock's Trustee (1891), 315. M'Gregor v. Stewart (1811), 23. Mackay v. Dick and Stevenson (1881) 42, 56. M'Kay v. Forsyth (1758), 329. Mackenzie v. Dunlop and Co. (1856), 258, 259. Mackenzie v. Newall (1824), 321. M'Kie V. Maxwell (1752), 12. Mackie v. Riddell (1874), 71. M'Kinlay v. Wilson (1885), 22. Mackinnon v. Max Nansen, and Co. (1868), 335. M'Laren v. Barclay (1777), 108. *Maclean v. Dunn (1828), 231. M'Lean v. Grant (1805), 106. M'Lean v. Hope and Thomas (1869), 18. M'Leans v. Thorley (1797), 240. Maclelland v. Adam and Mathie (1795), 129. M'Leod and Co. v. Harrison (1880), 218, 222, 336. M'Meekin v. Ross (1876), 321. M'MUlan ii. Price (1837), 322. M'Nair v. Miller (1808), 20. M'Naughton v. Baird and Co. (1852), 88, 317. *Maddison v. Alderson (1883), 25. *Maillard v. Duke of Argyle (1843), 181. Main v. Maxwell (1710), 332. ■*Makin v. Watkinson (1870), 43. Malloch V. Hodghton (1849), 37. *Manton v. Moore (1796), 133. SALE OF GOODS ACT 1893. Marshall and M'Kell v. Blackwood (1747), 19. Marston v. Kerr's Trustee (1879), 17, 260, 327. Martin and Sons v. Eoberston, Ferguson, and Co. (1872), 18. *Martindale v. Smith (1841), 48. *Martineau v. Kitching (1872), 36, 105. Martinez y Gomez v. Allison (1890), 123, 325. Mason v. Earl of Aberdeen (1709), 23. Mathieson v. Allison (1854), 195, 317. ♦Matthews v. Baxter (1873), 12. Maxwell and Co. v. Stevenson and Co. (1831), 325. *May V. Chapman (1847), 121. Mein v. Bogle (1828), 7. Melrose and Co. v. Hastie and Co. (1850-54), 182, 206, 222, 334. Melvil and Liddel ■;;. Robertson (1749), 108, 109. Melville v. Criohley and Co. (1856), 55, 56. Menzies v. Macharg (1760), 55. Menzies v. Menzies (1893), 275. ♦Merchant Banking Co. v. Phoenix Bessemer Steel Co. (1877), 198. ♦Mersey Steel and Iron Co. v. Naylor (1884), 151. ♦Meyer v. Everth (1814), 77. ♦Meyerstein v. Barber (1866), 133. ♦Miles, Ex parte (1885), 210, 219. ♦Miles V. Gorton (1834), 197. Mill V. Hoar (1812), 21. Miller v. Hutchison and Dixon (1881), 313. Miller's Trustee v. Shield (1862), 319. Mills V. Hamilton (1830), 37. Milne v. Singer Manufacturing Co. (1881), 323. Milne and Co. v. Miller (1809), 108, 165. ♦Mirabita v. Imperial Ottoman Bank (1878), 78, 99, 103. Mitchell V. Bisset (1694), 56. Mitchell V. Gowans and Phin (1813), 336. Mitchell V. Heys and Sons (1894), 82, 95, 111, 325. Mitchell V. Major (1856), 326. Mitchell's Trustees v. Gladstone (1894), 323. ♦Moakes v. Nicholson (1865), 31. *Mody V. Gregson (1868), 64, 76. Moffat V. Moffat (1737), 22. MoUison V. Hamilton (1886), 71. ♦Molton V. Camroux (1848), 12. ♦Mondel v. Steel (1841), 254. Montrose, Earl of, v. Scott (1639), 38, 43. ♦"Moorcock," The (1889), 257. Moore v. Gledden (1869), 80, 313. Moore v. Paterson (1881), 251. More V. Dudgeon and Brodie (1801), 313, 327. Morison v. Glen and Forrester (1712), 39, 56. ♦Morison v. Gray (1824), 181. TAvBLE OF CASES. *Morley v. Attenborough (1849), 57, 58, 59, 111. *Morris v. Levison (1876), 145. Morrison v. Boswall (1812), 243. See Boawall v. Morrison. Morson and Co. v. Burns (1866), 56. Morton v. Cunningham (1738), 59. *Morton v. Tibbett (1850), 26, 169. Morton and Co. v. Abercromby (1858), 159, 205, 226, 320, 333, 337. *Moss V. Sweet (1851), 89, 95. *Mucklow V. Mangles (1803), 96, 98. Muil V. Gibb (1840), 70, 77. Muir, Wood, and Co. v. Moore and Kidd (1876), 324. Murdocb v. Richardson (1776), 54. Murdoch and Co., Ltd. v. Greig (1889), 5, 81, 83, 101, 116, 276, 328. Murray v. Macwhan (1783), 266. Murray and Henderson v. Kincaid (1796), 224. See Kincaid v. Murray and Henderson. N Nairn v. Scrymger (1676), 59. Napier v. Campbell (1841), 56. *Nash V. Palmer (1816), 61. National Bank v. Forbes (1858), 187. National Bank v. Union Bank (1886), 186, 187, 276. *National Mercantile Bank v. Hampson (1880), 110. *Neate'y. Ball (1801), 95. *NeiU V. Whitworth (1865), 130. Neish V. Trompousky and Co. (1807), 208, 222, 336. Nelmes and Co. v. Ewing (1883), 316. NewaU v. Mitchell (1765), 330. Newlands v. Leggatt (1885), 106. Newmann, Hunt, and Co. v. Harris (1803), 56. *Newsome v. Thornton (1805), 182. *Nicliol V. Godts (1854), 63, 64, 69. *Nicholson v. Bradfield Union (1866), 146. *Nicholson v. Harper (1895), 88, 120. Nisbet's Trustees v. Nisbet (1871), 11. Nobles V. Armstrong (1813), 22. North British Oil Co. v. Swann (1868), 146. North British Eailway Co. v. Benhar Coal Co. (1886), 45. North-Western Bank, Ltd., v. Poynter, Son, and Macdonalds (1894), 110, 123, 283, 322. O *Oakes v. Turquand (1867), 115. *Ogle V. Earl Vane (1868), 150. *01iver v. Hunting (1890), 26. SALE OF GOODS ACT 1893. *01ivant u Bayley (1843), 70. *Omrod v. Huth (1845), 70. *Oppen]ieim v. Eussell (1802), 208. Ord u Barton (1846), 20. *Orme v. Galloway (1854), 344. Orr's Trustee v. Tullis (1870), 80, 81, 82, 326. *Oxendale v. Wetherell (1829), 141, 144, 146, 148. Padgett and Co. v. M'Nair and Brand (1852), 55, 56, 77, 173. *Page V. Morgan (1885), 26. *Page V. Norfolk (1894), 36. ♦Parker v. Palmer (1821), 77, 95. ♦Parkinson v. Lee (1802), 69, 70, 76, 77. *Pasley v. Freeman (1789), 258. Paterson 1;. Dickson (1850), 63, 69. Paterson v. Keith (1745), 242. *Patesliall v. Tranter (1835), 55. Paton V. Lockhart (1675), 56. Pattison's Trustee v. Liston (1893), 280, 314, 318. Paul V. Cuthbertson (1840), 313. ♦Payne v. Cave (1789), 265. . ■ ♦Payne v. Shadbolt (1808), 197. ♦Payne v. Wilson (1895), 119, 120, 124. Pearce Brothers v. Irons (1869), 57. ♦Pearson, Sx pa/rte (1868), 98, 199. ♦Pearson v. Dawson (1858), 228. ♦Pease v. Gloahec (1866), 115. Penny v. Penny (1894), 12. Pensonand Robertson, Petitioners (1820), 315. ♦Perkins v. Bell (1892), 168. Philip V. Edinburgh, Perth, and Dundee Railway Co. (1857), 7. Philips V. Blair and Martin (1801), 138. ♦Pickford v. Grand Junction Railway Co. (1841), 131. Pinder and Co. v. I'uUarton (1889), 94, 95. ♦Pinnel's Case (1602), 344. Pitcairn v. Brown. (1823), 56. Platnauer Brothers v. Tosh (1892), 332. ♦Playford v. Mercer (1870), 140. ♦Plevins v. Downing (1876), 150. Pochln and Co. v. Robinows and Marjoribanks (1869), 319 ♦Pointin v. Porrier (1885), 157, 158. ♦Polglass V. Oliver (1831), 41. Pollock V. Macadam (1840), 56. Pollock and Dickson v. M'Andrew (1828), 18. Pollok V. Burns (1875), 12. Pontifex and "Wood v. Robertson (1876), 254. TABLE OF CASES. *Portman v. Middleton (1858), 256. Potter V. Greig (1836), 56. *Poultoii V. Lattimore (1829), 55. *Powell V. Horton (1836), 63, 77. Prince v. Pallat (1680), 157, 158, 159, 204, 205, 273, 319, 337. Pringles v. Gribton (1710), 324. ^Printing and Numerical Co. v. Sampson (1875), 258. Purnell v. Shannon (1894), 181. R Eaebdkn v. Baird (1832), 49. Ealston v. Robb (1808), 69. Ralston v. Robertson (1761), 56, 69. Ramsay v. M'Lellan and Son (1845), 56. Ramsay v. Wilson (1666), 324. ♦Randall'v. Newson (1877), 62, 64, 65, 66, 77. Ransan v. MitobeH (1845), 56, 173. ♦Raphael v. Burt (1864), 58. *Rawson v. Johnston (1801), 131. *Ray V. Barker (1879), 95. *Read v. Goldring (1813), 191. Reid V. Morrison (1893), 29. Reid V. Steele (1824), 57. *Reuss V. Pioksley (1866), 26. *Reuter v. Sala (1879), 49, 146, 149, 150. Rhind's Trustee v. Robertson and Baxter (1891), 318. *Richardson v. Bank of England (1838), 268. *Richardson v. Dunn (1866), 146. Richardson v. Roscoe and Rigg (1837), 142. Richmond and Co. v. Railton (1854), 80, 132, 320. *Rigge V. Burbridge (1846), 255. Robb V. Cruickshank (1840), 49, 138, 173. ♦Roberts v. Brett (1865), 137. Robertson v. Harford Brothers and Co. (1832), 56, 143. Robertson and Aitken v. More and Co. (1801), 160, 222, 225, 330, 336. Robertson and Baxter v. Macpherson Brothers (1893), 200. Robertson, Harvey, and Co. v. Adam's Creditors (1803), 334. Robertsons v. M'lntyre (1882), 82, 326. Robertson's Creditors v. Udnies and PatuUo (1757), 330. Robeson v. Waugh (1874), 71. ♦Robinson v. Macdonnell (1816), 30. ♦Robinson v. MoUett (1875), 142, 260. Robinson and Co. v. M'Culloch (1808), 242, 244. Robson V. Thomson (1864), 174. ♦Rodger u Comptoir d'Escompte (1868), 228. ♦Rohde V. Thwaites (182'7), 78, 98. SALE OF GOODS ACT \i *Eoper V. Johnstone (1873), 248. *Eoscorla v. Thomas (1842), 344. Rose V. Johnston (1878), 71, 258. *Eosevear China Clay Co., Ex parte (1879), 222. Ross V. Cowie's Executrix (1888), 23. Ross V. Shaw (1784), 23. Eoss and Duncan v. Baxter and Co. (1885), 313. Eoss V. Taylor and Co. (1823), 106. Rough V. Moir and Son (1875), 55, 71. *Rourke v. Short (1856) 38. *Rousillon V. Rousillon (1880), 258. Rowan v. Coats Iron and Steel Co. (1885), 68. *Eoyal British Bank In re (Mixer's Case) (1859), 272. *Eugg V. Minett (1809), 94. Russel V. Campbell (1699), 314. Russell V. Ferrier (1792), 106. *Russell V. Nicolopulo (1860), 77. ♦Rylands v. Kreitman (1865), 147. S Salter v. Knox's Factor (1786), 316. *Salter v. Woolams (1841), 139. ♦Sanders v. Maclean (1883), 102. Sandieman and Co. v. Kempt's Creditors (1786), 330. *Sawdon v. Andrews (1874), 256. *Sohotsman v. Lancashire and Yorkshire Railway Co. (1867), 222, 226 Schuurmans and Sons v. Goldie (1828), 199, 215, 331. Schuurmans v. Stephen (1832-33), 88, 143. Scoffler V. Read (1783), 15. Scot V. Fletcher (1665), 314. Scott V. Low (1704), 112. *Scott V. Pettit (1803), 216. Scott V. Scott's Trustee (1889), 322, 332. Scott V. Steel (1857), 71, 258. *Scrivener v. Great Northern Eailway Co. (1871), 201. Seath and Co. v. Moore (1886), 4, 90, 96, 108, 278, 318, 335. Seaton v. Carmichael (1680), 56. Selkirk, Earl of v. Nasmith (1778), 38, 43. Semple v. Givan (1672), 324. Semple v. Wilson (1889), 41. Serra v. Earl of Carnwath (1725), 9. *Sharington v. Strotton (1566), 343. Sharps v. Smyth (1832), 314. Sharrat v. Turnbull (1827), 56. Shearer v. Christie (1842), 82, 317. ♦Sheffield, Earl of v. London Joint-Stock Bank (1888), 121, *Shenstone v. Hilton (1894), 121. TABLE OF CASES. Shepherd v. Campbell and Robertson (1775), 214. ♦Shepherd -o. Harrison (1871), 103, 104. *Shepherd u Pybus (1842), 70. Sheriff v. Marshall (1812), 56. Sheriffs. Stein's Assignees (1828), 260. Shewell v. Mowbray (1678), 143. Shiell V. Guthrie's Trustees (1874), 266. *Shipley v. Davis (1814), 78. *Shipton V. Casson (1826) 141. Shirra and Mains v. Harvie and Co. (1807), 243. *Siffkin V. Wray (1805), 208. Sim V. Grant (1862), 321. ♦Simmons v. Swift (1826), 90, 94. ♦Simpson v. Crippin (1872), 150, 151, 152. Simpson v. Duncanson's Creditors (1786), 96, 97, 277, 325. ♦Sims V. Marryat (1851), 58. Sinclair and Williamson's Creditors v. Robertson and Aitken (1801), 217, 221, 224. Singer Manufacturing Co. v. Docherty (1882), 323. ♦Slubey u Heyward (1795), 198. Smart v. Begg (1852), 53, 56. Smith V. Allan and Poynter (1859), 88, 335. ♦Smith V. Baker (1878) 70, 73. Smith V. Brown (1735), 38. Smith V. Flowerdew (1842), 322. ♦Smith V. Goss (1808), 208. ♦Smith V. Mercer (1867), 183. Smith v. Miller (1827), 23. Smith 17. Napier (1804), 143. ♦Smith 13. Neale (1857), 57. Smith V. BiddeU (1886), 45. Smith Brothers and Co. v. Scott (1875), 56. Smith and Jamieson v. Drake (1809), 223. Smith and Sons v. Waite, Nash, and Co. (1888), 54. ♦Snee v. Prescott (1743), 204. ♦Sneed v. Ford (1859), 256. SomervHle and Co. v. Stein (1796), 87. ♦Somes v. British Empire Shipping Co. (1860), 194. Southesk, Earl of w. Keddy and Simpson (1682), 22. ♦Spalding v. Ruding (1843), 229. ♦Sparkes v. MarshaU (1836), 98. Spence v. Auchie Ure and Co. (1810), 332. Spence v. Muir (1809), 20. Spence v. Ormiston (1687), 108, 165. Spencer and Co. v. Dobie and Co. (1879), 4, 57, 327. Standard Investment Co. v. Dunblane Hydropathic Co. (1884), 289. Starkie v. Paterson (1893), 56. ♦Startups. Macdonald(1843), 139, 170. SALE OF GOODS ACT 1893. *Staunton v. Wood (1851), 131, 137. *Stedman v. Gooch (1793), 181. Steel Co. of Scotland 11. Tancred, Arrol, and Co. (1889), 145. See Tancred, Arrol, and Co. v. Steel Co. of Scotland. Stein V. Hutchison (1810), 220, 331. Stein's Assignees v. Shirreff (1828), 260. Stephens. Lord Advocate (1878), 60. Steven v. Robertson (1760), 38, 43. Stevenson v. Dalrymple (1808), 54, 56. Stevenson v. Donaldson (1884), 323. *Stevenson v. M'Lean (1880), 20. *Stevenson v. Newnham (1853), 115. Stewart v. Bell (1814), 315. Stewart v. Fraser and Co., etc. (1878), 321. Stewart v. Gordon (1831), 38, 260. Stewart v. Jamieson (1863), 54, 55, 73, 258. Stewart v. Kennedy (1890), 250, 275. Stewart v. M'Nicol (1814), 69. Stewart v. Scott (1844), 23. Stewart, Brown, and Co. v. Biggart and Fulton (1893), 271. Stiven v. Scott and Simson (1871), 317, 329. *Stock V. Inglis (1885), 98, 105, 140. Stoppel and Co. v. Stoddart (1850), 224, 225, 226, 228, 232, 331, 336. *Stoveld V. Hughes (1811), 206, 228. Strachan v. Auld (1884), 266. Strachan v. Knox and Co.'s Trustee (1817), 211, 221, 320, 337. Strachan v. Paton (1824), 245. Strange v. Jardine (1894), 54, 258. *Strohmenger v. Attenborough (1894), 124. Strong V. Phillips and Go. (1878), 260. Stuart V. Stuart and Hume (1639), 16. *Stuart V. Wilkins (1778), 69. Stuart and Co. v. Kennedy (1885), 37. *Sturlyn v. Albany (1586), 343. Sutherland v. Montrose Shipbuilding Co. (1860), 129, 327. *Swain v. Shepherd (1832), 95. Swan V. Martin (1865), 59. *Swanwich v. Sothem (1839), 206. Sword u Milloy (1813), 160. Sword V. Sinclairs (1771), 37. Talibker Distillery v. Hamlya and Co. (1894), 270. Tancred, Arrol, and Co. v. Steel Co. of Scotland (1890) 145, 146. *Tansley v. Turner (1835), 94. *Tarling v. Baxter (1827), 90. TABLE OF CASES. *Taylor v. Caldwell (1863), 35. Taylor v. Jack (1821), 134, 316, 334. Taylors v. Maolellans (1891), 28, 138. Taylor v. Provan (1864), 12. Taylor v. Ranken (1675), 312. *Taylor v. Smith (1892), 26. Taylor and Co. v. Morrison (1809), 242, 243, 244. Taysen and Co. v. Johnsen (1872), 247. *Thomas v. Evans (1808), 191. Thomson v. Elies (1675), 318. Thomson Brothers v. Thomson (1885), 235, 287. ♦Thornton v. Jenyus (1840), 344. *Thurnell v. Balbirnie (1837), 43. *" Tigress," The (1863), 202, 226, 227. Tillicoutry v. Laird of Rollo (1678), 189. Tod and Co. v. Eattray (1809), 332. Tod and Son v. Merchant Banking Co. of London, Ltd. (1883), 321. Todd V. Armour (1882), 113, 325. Todd and Higginlsotham v. O'Regan (1859), 56. *Tooke v. Hollingsworth (1793), 203. Towill and Co. v. The British Agricultural Association (1875), 18, 261. *Towle V. White (1870), 95. *Townley v. Crump (1836), 192. Trappes v. Meredith (1871), 29. *Trege]les v. Sewell (1863), 98. *Turley v. Bates (1863), 88. Turnbull u Ker (1624), 314. Turnbull v. M'Lean and Co. (1874), 48, 49, 152, 153. *Turner v. Trustees of Liverpool Docks (1851), 222. *Tye V. Fynmore (1813), 63, 77. U Union Bank v. Mackenzie (1865), 326. Vallance v. Scot (1531), 329. *Valpy V. Gibson (1847), 36. *Valpy V. Oakeley (1851), 192. *Van Casteel v. Booker (1848), 102. Van Oppen v. Arbuckle (1855), 63, 64. Verdin Brothers v. Robertson (1871), 20, 164. *Vertue v. Jewell (1814), 208. Vickers ii. Hertz (1871), 319, 333. *Vickers v. Vickers (1867), 43. Vickers and Co. v. Sheriff and Dudgeon (1803), 56. *Vyse v. Wakefield (1840), 43. SALE OF GOODS ACT 1893. W *Waddington v. Oliver (1805), 141, 144, 148. *Wain V. Warlters (1804), 347. Walker v. Irwin and Co. (1841), 319. Walker v. Langdalea Chemical Co. (1873), 90, 91, 94, 108. Walker v. Milne (1823), 240. Walker v. Spence and Carfrae (1765), 112. ♦Wallace v. Breeds (1811), 78. Wallace and Brown v. Robinson, Fleming, and Co. (1885), 54, 168, 170. Wallace, Gardyn, and Co. v. Miller (1766), 212, 330. Walls and Co. v. Greenshields and Co. (1875), 145. Wallwood 1). Gray (1681), 56. Warin and Craven v. Forrester (1877), 233, 235, 239, 247. See Forrester v. Warin and Craven. *Warlow V. Harrison (1858), 265. Warrender v. Alexander (1715), 321. Watson V. Hunter and Co. (1841), 23. Watson V. Johnstone (1846), 23. Watson V. Singer Manufacturing Co. (1884), 323. Watson V. Stewart (1694), 56. Watt V. Findlay and Hendrie (1846), 132, 212, 274, 331. Watt V. Glen (1829), 56, 77. Watt V. Mitchell (1839), 239, 245. Wauchope v. Gall and Ross (1805), 315. Wear and CoUey v. Davidsons (1873), 260. Webster and Co. v. Cramond Iron Co. (1875), 255. Webster ■;;. Thomson (1830), 173. *Weir V. Bell (1878), 272. Welch V. Russell (1894), 61. West Lothian Oil Co., Ltd., v. Mair (1892), 279, 313, 333. West Stockton Iron Co. v. Neilson and Maxwell (1880), 28, 65, 68. Western Bank of Scotland v. Addie (1867), 272. *Westzinthus, Re (1833), 229. Whealler v. Methuen (1843), 69. Wheeler and Wilson Co. v. M'Ritchie (1884), 323. White V. Spence (1683), 22, 23. *White V. Wilks (1814), 78. White and Co., Ltd., v. Dougherty (1891), 77, 266. ♦Whitehead v. Anderson (1842), 199, 207, 213, 218, 219, 226. *Whitehouse v. Frost (1810), 78, 206. Whitson V. Neilson and Co. (1828), 49, 143, 147. *Wieleri;. Schilizzi (1856), 63, 64. Wight v. Forman (1828), 276, 328. Wilkie V. Dunlop and Co. (1834), 15, 16. ♦Williams v. Wheeler (1860), 27. ♦Wilmshurst v. Bowker (1844), 99. TABLE OF CASES. Wilson V. Marquis of Breadalbane (1859), 37. Wilson V. Carmicliael and Sons (1894), 54. *Wilson V. Hicks (1857), 246. Wilson V. Laidlaw (1816), 14. Wilson V. Marshall (1812), 56. Wilson V. Spankie (1813), 315. Wilson V. Walker (1856), 18. Wilson, Konald, and Co. v. Curie, Robertson, and Co. (1884), 179. *Windliam v. Chetwynd (1757), 346, 348. *Wingfield, Ex parte (1879), 95. *Wiseman v. Vandeput (1690), 203. *Wood V. Foster (1587), 30. Wood V. Howden (1843), 23. *Wood V. Jones (1825), 208. *Wood V. Manley (1834), 139. *Wood V. Rowcliflfe (1846), 95. *Woodu Tassell (1844), 139. *Woodley v. Coventry (1863), 110. Woodrow V. Patterson and Co. (1845), 94. *Woods V. Russell (1822), 96. Woods V. Tullocli (1893), 275. Wright V. Blackwood (1833), 54, 60, 254. Wright V. Butohart (1662), 324. Wright V. Mitchell (1871), 317, 329. Wyld and Co. v. Richardson (1832), 317. Wylie and Lochhead v. Mitchell (1870), 326. *Wylson V. Dunn (1887), 26. Wyper v. Harveys, etc. (1861), 7, 84, 92, 187, 190, 196, 321. YouuG V. Aktiebolaget Ofverums Bruk (1890), 313, 333. Young I). Dunn (1785), 48. Young V. Giffen (1858), 71. Youngs. Gray (1893), 71. Young V. Loudoun (1855), 322. Young V. Stein's Creditors (1789), 334. *Zagurt v. Furnell (1809), 94. SALE OF GOODS ACT 1893. [56 & 57 Vict. c. 71.] An Act for codifying the Law relating to the Sale of Goods. [20th February 1894] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : PART I. FORMATION OF THE CONTRACT. Contract of Sale. 1. — (1.) A contract of sale^"^ of goods ^^ is a con- Seet. 1 tract whereby the seller ^'^ transfers or agrees to trans- fer the property ^^ in goods to the buyer ^"^ for a money consideration, called the price.^'^ There may be a con- tract of sale between one part owner and another. ^■'^^ (2.) A contract of sale may be absolute or con- ditional. ^^^ (3.) Where under a contract of sale the property in the goods is transferred from the seller to the buyer ^''^ the contract is called a sale ; but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the contract is called an agreement to sell. ^"^ Sale and aqrebmbnt TO SELL. SALE OF GOODS ACT 1893. Sect. 1. (4.) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred/*^ Notes. (a) " ' Contract of sale' includes an agreement to sell as well as a sale," and " ' sale ' includes a bargain and sale as well as a sale and delivery" [Sect. 62 (1)]. "Bargain and sale" (sometimes called " executed sale ") is to be distinguished on the one hand from "agreement to sell," and on the other hand from " sale and delivery." "Bargain and sale," though unaccompanied by de- livery, may pass the property to the purchaser, but if delivery has followed, it becomes "sale and delivery." The distinction between " sale " {i.e. " bargain and sale ") and " agreement to sell " is noticed below. Com. infra, p. 4. (6) " ' Goods ' include ... all corporeal moveables except money " [Sect. 62 (1)]. (c) " Seller"— " Buyer." See definitions. Sect. 62 (1). {d) " ' Property ' means the general property in goods, and not merely a special property " [Sect. 62 (1)]. The terms "general " and " special " as applied to property are now introduced for the first time into the law of Scotland. Com. infra, p. 5. (e) Price. See Sections 8 and 9. (/) Part owners. In Scotland it has never been doubted that one part owner may sell his interest to another, but the English law of co-ownership rests on an unsatisfactory basis. The difficulty perhaps arises from the extreme development in English law of the principle that one cannot contract with him- self, a theory which frequently leads to injustice, especially in connection with trusts and partnership. — See Lindley on Partner- ship, 6th ed. p. 3 1 e< seq. (g) The contract may be conditional in itself, or it may in- clude a condition as one of its terms. The distinction is im- portant. See Com. infra, p. 7. (h) " Transferred from the seller to the buyer." In England, and now also in Scotland, there is a re-transfer of the property in certain cases from the buyer to the seller, as where the buyer recovers damages for non-delivery under Sect. 51. See Com., Sect. 4>3 post, p. 201. (i) E.g. in Section 18, Rule 1 refers to " sale," and Rules 2 and 3 to " agreement to sell." Under Rules 4 and 5 an " agreement to sell" becomes a "sale." FORMATION OF THE CONTRACT. Commentary. ggg^_ ]^_ Sale as a contract has the same general characteristics General cHar- in every system of jurisprudence. The transfer of the ^^teristics of absolute or general ^ property distinguishes it from the contracts of loan, hire/ carriage or other bailment, while the money consideration or price distinguishes it from donation and exchange or barter.^ But the legal principles involved Variations of vary in different countries, and the terminology employed l^ termiii? ^ often differs in its application. Thus the definition of oiogy. sale given in this section does not describe the contract as it existed in the law of Scotland before the passing of this Act. In Scotland the seller did not transfer the property by the contract ; he only agreed to transfer it. The contract formed the sale, but its effect was merely to and Scotland give a titulus transferendi dominii ; it did not operate of property, as a conveyance in the buyer's favour. The contract was personal between the seller and the buyer, giving the latter in the case of the sale of a specific article a jus ad rem specificam, but no jus in re} The seller remained the owner of the goods until delivery, and he might therefore validly sell the same goods to a second buyer transacting with him bond fide and obtaining delivery. In this case the second buyer's right could not have been called in question by the original buyer, whose only remedy was a personal action against the seller for damages for breach of contract. Again, prior to the Mercantile Law Amendment Act, Scotland, 1 85 6, ^ the seller's creditors could seize goods sold but not delivered, and were not bound to recognise any right in the buyer.^ The principle of the law of England, 1 The term "general prpperty " explained infra, p. 5. 2 A contract for the supply of steam power is sale, not lease— Ctor^ v. w' T ., V/ £' to bind the contract, or in part payment,^''^ or unless some note or memo- randum in writing w of the contract be made and signed by the party to be charged or his agent in that behalf. (2.) The provisions of this section apply to every such contract, notwithstanding that the goods may be intended to be delivered at some future time, or may not at the time of such contract be actually made, procured, or provided, or fit or ready for delivery .^'^ or some act may be requisite for the making or com- pleting thereof, or rendering the same fit for delivery.^ (3.) There is acceptance ^^^ of goods within the meaning of this section when the buyer does any act in relation to the goods which recognises a pre-exist- ing contract of sale whether there be an acceptance in performance of the contract or not. (4.) The provisions of this section do not apply to Scotland.^ Notes. (a) "■' Enforceable hy action." These words were substituted in Committee for " allowed to be good," ^ but the substitution does not remove the objection long urged against the 17th section of the Statute of Frauds of which this section is practi- cally a reproduction. The words as they now stand suggest that there is nothing illegal in entering into a verbal contract for the sale of goods of the value of £10 or upwards, but that if one of the parties does not keep to his bargain the other has no legal redress. The law, while recognising the right, refuses the remedy. (b) "Accept" — "actually receive." Statutory force is here ■' The change of phrase is in accordance with decision. The contract is "not void, still less illegal." See Maddison v. Alderson (1883), 8 App. Cas. 467.— Per Lord Blackburn at p. 488. 26 SALE OF GOODS ACT 1893. Sect. 4. given to a judicial interpretation of "acceptance" as it ap- peared in the Statute of Frauds. Both actual receipt and acceptance are required to elide the statute, but it has been held that the acceptance may be such as to establish the contract, while not precluding the buyer from objecting that the particular terms of the contract were not fulfilled. The buyer may reject the goods as disconform to contract, though no longer at liberty to refuse implement on the ground that the contract itself is not in writing.! fjjg provision in the present Act perhaps goes further than the common law so as to overrule such cases as Taylor v. Smith ^ (1892). It can scarcely be maintained that an examina- tion of the goods by the buyer with the view of ascertaining whether they are in terms of the contract is not an act by him in " relation to the goods which recognises a pre - existing contract." ^ (c) " Earnest " — "part payment." The giving of " earnest,'' though formerly a prevalent custom, has fallen into disuse. It is to be distinguished from " part payment," and " may be money or some gift or token given by the buyer to the vendor, and accepted by the latter to mark the final conclusive assent of both sides to the bargain." * T o distinguish it from part payment _i t is sometimes in Scotland called " dead e arnest ." ° (3J "^Writing." It is not necessary that the writing should be in the form of a deed or be in itself probative ; it is sufficient if the signature of the party to be charged is attached.® The agreement may be gathered from several connected papers "^ pro- vided the connection appears from the documents themselves with or without the aid of parole evidence.® The contract may be gathered from the terms of a series of letters,^ and even tele- grams, where the instructions for the message are signed by the party, may be used along with the signed correspondence to show its terms. 1" (e) " Delivery." Defined Sect. 62 (1). (/) " Fit for delivery." This seems another mode of express- 1 Page v. Morgam. (1885), 15 Q.B.D. 258. See also Morton v. Tibbdt (1850), 15 Q.B. 428 ; KibUe v. Gough (1878), 38 L.T. N.S. 204 ; Benjamin on Sale, p. 134 et seq. 2 2 Q.B. 62. ' Sub-section (3). See also Abbott v. Wolsey (1895), 11 Times Law Eep. 414, where the decision of a Divisional Court on the lines of Taylor v. Smith was overruled by the Court of Appeal. * Benjamin on Sale, p. 172. ^ Ersk. iii. 3. 5. " Meuss V. FichsUy (1866), L.R. 1 Ex. 342. ' Baumann v. James (1868), L.R. 3 Ch. App. 508. 8 Oliver v. Kunting (1890), L.R. 44 Ch. Div. 205. " Wylson V. Dunn (1887), L.R. 34 Ch. Div. 569. =•» Godwin v. Francis (1870), L.R. 5 C.P. 295. FORMATION OF THE CONTRACT. 27 ing " deliverable state " which is defined by Sect. 62 (4). See also Sect 4 Sect. 18, Eule 2. (g) " Acceptance." See note (J) supra. _ (A) Section not applicable to Scotland. The section reproduces vnth. additions and slight alterations the 17th section of the Statute of Frauds 1 and the 7th section of what is known as Lord Tenterden's Act,^ both of which sections are repealed by this Act.3 Neither of the Acts referred to applies to Scotland, and therefore the provisions of this section are also excluded from operation there. The question remains whether a Scottish contract not in accordance with the section can be enforced in England. If Leroiu v. Brown ^ (1836) is authoritative, the answer will be negative, but considerable doubt has been thrown upon this judgment,^ and mercantile expediency, as well as the general principles of international law, point to the recognition in England of a valid Scottish contract. Subject Matter of Contract. 5. — (1.) The goods ^"^ which form the subject of a Seet. 5. contract of sale(^> may be either existing goods, ^^ZZZs. owned or possessed ^"^ by the seller, or goods to be manufactured^''^ or acquired by the seller after the making of the contract of sale, in this Act called "future goods." ('> (2.) There may be a contract for the sale of goods, the acquisition of which by the seller depends upon a contingency^'^ which may or may not happen. (3.) Where by a contract of sale the seller pur- ports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.^*'^ ^ (1677), 29 Car. II. c. 3. In the revised editions of the Statutes, Sect. 17 is numbered 16, and as such it is repealed by this Act. The text of the original section will be found in Appendix I. post, p. 291. See also Appendix III. post, p. 350. 2 (1828), 9 Geo. IV. u. 14. See Appendix I. post, p. 292. ' Sect. 60 and relative Schedule. A sketch of the history of the Statute of Frauds will be found in Appendix III. post, p. 343. * 12 C.B. 801. 5 Mg. by Willes, J., in Williams v. Wheeler (1860), 8 C.B. N.S. 299. See Blackburn on Sale, p. 2, note ; Benjamin on Sale, p. 112, note. 28 SALE OF GOODS ACT 1893. Sect. 5. Notes. (a) " Goods." Defined Sect. 62 (1). (J) ''Contract of sale." Defined Sects. 1 & 62 (1). The subject of the contract must be an actual sale, not a security [Sect. 61 (4)]. (c) " Otoned or possessed." Possession as an alternative to ownership may refer to goods held by seller or buyer as bailee for the other party (e.g. Sects. 20 & 25), or to an agent having a power of sale. .(d) "Manufactured." Formerly there was an implied under- taking in English law that goods sold by a manufacturer were manufactured by himself. The rule is by this Act assimilated to Scots law where there is no such implication. See CoM. infra. («) "Future goods." Similarly definM in Sect. 62 (1). (/) " Contingency." But if the contract amounts to a wager it is still illegal. See Gaming Act, 1845 (8 & 9 Vict. c. 109), Sect. 18, preserved by Sect. 61 (3). (g) " Agreement to sell." Defined Sect. 1 (3). Existing and ' future goods. Goods to be manufactured. COMMENTAEY. The subject matter of sale is here divided into (1) " existing goods," (2) " future goods." The threefold division of Bell is in some respects to be preferred, viz. (1) specific goods, (2) goods described generically, (3) future goods.^ The first of these Bell calls a "p^vper sale," i.e. one which, according to the former law of Scotland, passed the risk though not the property to the buyer.^ - The bill originally provided that in the case of goods sold " by a manufacturer as such there is (in the absence /of any trade usage to the contrary) an implied undertaking I that the goods are of the seller's own manufacture." This gave effect to the English case of Johnson v. Raylton^ (1881), and was in opposition to the Scottish cases of West Stockton Iron Co. v. Neilson and Maxwell* (1880) and Johnson and Beay v. Nicoll and Son^ (1881). The sub- 1 Bell's Prin., Sect. 90. 2 yj^^,^ ggct. 91. 37Q.B.D. 438. 07 Ret. 1055. ' 8 Ret. 437. See also. Taylors v. MacUllans (1891), 19 Ret. 10. FORMATION OF THE CONTRACT. 29 section embodying this provision was deleted in committee, Sect. 5. so that, taken in connection with Sect. 14 (1), the Scottish rule is now the law of both countries.^ The res or subject of sale may be physical and tangible, Contingency. or it may be an incorporeal right, such as a debt or a share in a joint-stock company. The Act relates only to the former of these.^ It is possible, however, that the subject of sale may in Scotland be treated as an incorporeal right beyond the scope of the Act, while in England it is a " chattel personal " * falling within its provisions. Thus the validity of the sale of a spes or chance is recognised in Scotland * as well as in England,^ but in Scotland the s-pes, though incorporeal, is itself the subject of the sale. It is an absolute sale of an incorporeal thing,^ the price of which is payable although the chance itself should never be realised. A spes not being a " corporeal moveable '' does not come within the category of " goods " as defined in Sect. 62 (1), and therefore the sale of a spes is not con- trolled by the Act. In England, on the other hand, the transaction is treated as a conditional or contingent sale of the suljed of the spes, which may or may not be a corporeal moveable. *" A mere possibility or contingency, not depend- ent upon any present right nor resulting from any present property or interest . . . may be the subject of an executory agreement to sell.'"^ But being an executory agreement it necessarily relates not to the spes but to its subject. If one sold a chance as such, he would transfer at 1 See as to the former law of England— Benjamin on Sale, p. 658. It has been suggested that the evident intention of the framers of the Act has not been carried out. The subject is again referred to post, p. 65. 2 " ' Goods ' include, in Scotland, all corporeal moveables except money,' Sect. 62 (1). 3 Sect. 62 (1). . . , , . ^ Ersk. iii. 3. 3. But a spes does not vest m a trustee m bankruptcy, and even a iuture right, though much more than a spes, does not do %a.—Eeid v. Morrison (1893), "20 Eet. 510. See also Trappcs v. MeredUh (1871), 10 ^»°'Beni'amin on Sale, 87 ; Story on Sale, Sect. 185 ; HUohcock v. Giddings (1817), 4 Price 135, per Richards 0. B. at p. 139 ; Buddie v. Green (1857), 27 L.J. Ex. 33, per Martin, B., at p. 34. ^ ^t. j -^ i, 6 "A chance is a res in the wide jural sense of the word, quite as much as a claim of debt or other incorporeal is."— Mackintosh on Moman Law of Sale, p. 25. ^ . . r, , ot 7 Story on Sale, Sect. 186 ; Benjamm on Sale, p. 87. 3° SALE OF GOODS ACT 1893. Sect. 5. once to the purchaser all his property and interest in it, and therefore if the transaction had related to " goods " it would have been a " sale " as distinguished from an " agree- ment to sell." English law, however, declares that the present sale of a chance is impossible,^ and that the trans- action is an executory agreement to sell something else, contingently upon that other thing coming into existence.^ If that other thing is a corporeal moveable or " chattel personal " the Act will apply.^ It therefore follows that I in Scotland the Act wili not apply to the sale of a spes or / chance, while in England a sale exactly similar in its ' nature may fall to be dealt with under its provisions. In the case of emptio rei sjperatce, i.e. where the thing sold " may be reasonably expected to come into existence in the ordinary course of nature, e.g. the lambs to be born in the following spring on a particular sheep run, or next season's yield from a certain farm, garden, or vineyard," * the law of England somewhat inconsistently holds it to be a "bargain and sale," so that immediately on the thing coming into existence the property and the risk pass at once to the purchaser.^ It seems, however, that this rule has never been acted upon, and it has been very pro- perly suggested that " there is no rational distinction between one class of future goods and another." * Future goods. In regard to " future goods " as defined in this section and in Sect. 62 (1), there is no foundation for the state- ment of Bell that in England " no action would lie if the seller had not the goods at the time but intended to go n 1 "A contingency cannot be made the subject of a present sale." — Story on Sale, Sect. 186. ^ "Such a contract" {i.e. a contract for the sale of chance) "would not be a bargain and sale at common law, but would be a valid executory con- tract." — Benjamin on Sale, p. 87. * Sect. 62 (1). * Moyle's Sale in the Civil Law, p. 31. I ^ "Things not yet existing which may be sold are those which are said to / have a potential existence, that is things which are the natural product or [ expected increase of something already belonging to the vendor. " — Benjamin on Sale, p. 82. See on the subject generally Wood v. Foster (1587), 1 Leon 42 ; Gfrantham v. Hawley (1616), Hob 132 ; Robinson v. Macdonell (1816), 5 M. & S. 228 ; Hale v. Bawson (1858), 4 C.B. N.S. 85. ° Chalmers, Sale of Goods Act, p. 16. This view Is supported by Langton V. Eiggins (1859), 4 H. & N. 402, and perhaps also by Howell v. Coupland (1874), 1 Q.B.D. 258. FORMATION OF THE CONTRACT. 31 into the market and buy them." 1 The case of Bryan v. Sect. 5. Lewis'^ (1826) upon which he founds, and also the earlier case of Lorymer v. Smith^ (1822), were judgments of Lord Tenterden (Abbot, C. J.), who thought such a transaction a wager and therefore illegal.* In the later case of Hihhle- ' white V. M' Marine^ (1839) the cases referred to were clearly overruled.'' But though " future goods " may form the subject of an agreement to sell they cannot be made the subject of a sale so as to pass the property.'' In this respect, therefore, the section is merely declaratory of the common law of England. 6. Where there is a contract for the sale of specific Seet. 6. •goods,w and the goods without the knowledge of the hZ' ™™ seller^) have perished ("> at the time when the contract p^«i«=™- is made/'^^ the contract is void.^'^ Notes. (a) " Specific goods." Defined Sect. 62 (1). The section does not apply to goods described generically. Genw nunquam perit. (b) " Without the knowledge of tJie seller." See Com. infra, p. 32. (c) "Perished." Altered in committee from "ceased to exist." The latter phrase is the one usually employed in the decisions, e.g. in Couturier v. Hastie^ (1856). {d) " At the time when the contract is made." Sect. 7 deals with the case of goods perishing after the contract, but before the risk passes to the buyer. ' Bell on Sale, p. 16. Bell's work on Sale was written in 1843, but he appears not to have noticed Mibblewhite v. M' Marine decided four years earlier. 2 Ry. and Moo. 386. " 1 B. & C. 1. ^ "The strong opinion Lord Tenterden expressed appears to have been gradually formed in his mind, and was no doubt confirmed by the effects of the unfortunate mercantile speculations throughout the country about that time."— Per Parke, B., on HiUlewhite v. M' Marine (1839), 5 M. & W. 452 at p. 462. s 5 M. & W. 452. ° Bell himself throws doubt upon Bryan v. Lewis.' — Bell's Prin., Sect. 128, note. ^ Lunn v. JTiornton (1845), 3 C.B. 379, where a contrary argument was negatived by the Court. See also Langtan v. Higgins (1859), 28 L.J. Ex. 252 ; Moakesv. Nicholson (1865), 19 C.B. N.S. 290 ; Benjamin on Sale, p. 361. 8 7 H.L. Cas. 673. 32 SALE OF GOODS ACT 1893. Sect. 6. («) " Void." The word corresponds to the Scottish ab initio." See Note (a), Sect. 23 post, p. 114. ■null Couturier v. Hastie, Knowledge of parties. Partial loss. Commentary. This section is founded on Couturier v. Hastie^ (1856), where a sale of corn at sea was contracted in London, but it was afterwards found that the cargo, having got heated, had been sold at a foreign port before the date of the contract. A court of seven judges, and afterwards the House of Lords, unanimously found the London contract void, holding, in the words of Lord Chancellor Cranworth, that " what the parties contemplated was an existing something to be sold and bought." The case further shows that it is not essential to the application of the rule that the goods perish physi- cally, if they cease to answer the description in the contract. The corn continued to be called by that name, but it was no longer the specific cargo intended by the parties. Knowledge on the part of the seller that the goods he professes to sell have perished will very properly subject him to a claim for damages. The contract in that case is not void in the sense of freeing both parties. The section, however, does not refer to the buyer's knowledge, or state what the effect would be in the event of the subject of sale having only partially perished. The rule of the Eoman law was that in the case of partial loss, if the buyer knew and the seller did not, the sale was good, and the buyer was obliged to pay the full price,^ while in the event of total loss the sale was altogether void.^ There seems no room here for a similar distinction. When the goods sold have partially perished the only question seems to be, whether the subject of sale continues to answer the description in the contract. If not, it ceases to be the. specific article sold.* Pothier though? thatTn 1 7 H.L. Cas. 673. 2 xii^^^i!, I8. 1. 57. ' Ibid. 18. 1. 15. pr. But see Mackintosh's Boman Law of Sale, p. 106, where it is suggested that the rule as to partial loss extended to total loss. * This may be deduced from the converse proposition that if the thing sold continues to answer the description, the sale is good. In Barr v. Gibson (1838), 3 M. & W. 390, a ship sold while at sea had, previous to the contract, and unknown to the parties, been stranded. It was held that the FORMATION OF THE CONTRACT. 33 every case of partial destruction the buyer should have the Sect. 6. option of either abandoning the sale, or of claiming the part preserved at a reduced price/ but this suggestion, though adopted in France and embodied in the French Code,^ forms no part of the law of England ^ or Scotland.* Impossibility of performance is probably the true basis upon which the impossibility avoidance of the contract proceeds, but impossibility is not "fP^^"''"*"''^ removed by a part remaining possible, nor can fulfilment of a part of a contract be said to be the fulfilment of the contract itself. If performance is impossible, the fact should operate in favour of an innocent seller as well as in favour of a buyer; both parties should be bound or neither. A difficulty may be suggested where specific goods, Partial de subject to two or more contracts of sale, are found to have struction where two or been partially destroyed. If, for instance, the seller has raorecon- tracts. subject of sale was still extant as a ship, though it might be a total loss in the sense of an insurance policy. In certain circumstances the buyer may be bound to communicate to the seller the benefit of an insurance effected by \Lvm.—GUle.spie v. Miller, Son, and Co. (1874), 1 Eet. 423. ^ Contract de Vente, No. 4. ^ Art. 1601. ^ Chalmers on Sale of Goods Act, p. 17. ^ So far as sale is concerned, no very direct authority either in England or Scotland can be cited for the non-application of the French rule, though an analogy may be found in the law as to leases — Pollock on CoTitract, 6th ed. p. 393 ; Stair, i. 15. 2 and 3 ; Ersk. ii. 6. 41 ; Bell's Prin. Sect. 1208. In England Barr v. Gibson (1838), 3 M. & W. 390, is sometimes cited as authority, but is not directly in point. Perhaps Geipel v. Smith (1872), L.R. 7 Q.B. 404, is a better illustration. While it related to an excepted risk in maritime law, the principle seems of general application. It was held that where the principal part of a contract becomes impossible by an excepted risk, the parties {i.e. loth parties) are discharged from performing any other part which remains possible. (See Pollock on Contract, 6th ed. pp. 404, 408.) The leading American text-writers are, however, inclined to adopt the French rule as applicable both to England and Scotland. Kent, referring to Pothier and the Code Napoleon, says : "I presume the principles contained in the English and American cases tend to the same conclusion, provided the inducement to the purchase be thereby materially affected" (Com. ii. 469). Story says : " If the thing sold be only partially destroyed at the time of the sale, the buyer may either abandon the contract or he may take the thing at / a proportional reduction of the price, according to the ternls of the original j bargain " (Sale, Sect. 184). Two English decisions are cited as authority by I both authors, but neither supports the law as stated. Curtis v. Hannay] (1800), 3 Esp. 82, merely illustrates the well-recognised English rule as to warranty set forth in Sect. 11 of this Act, while Farrer v. Nightingal (1798), 2 Esp. 639, if it has any relation to this subject, is adverse to the proposition set forth. Story further states that the la-w of Scotland is the same as that of the Code Napoleon, and cites M. P. Brown on Sale, Sect. 134, but Brown merely sets forth the Roman law, adding^ in a note that " the rule now adopted in France seems conformable to equity." D 34 SALE OF GOODS ACT 1893. Sect. 6. 100 boxes of raisins in a particular warehouse, 50 of which he sells to A and 50 to B without definite apportionment, if it turns out that 40 out of the 100 have perished, is the seller free from both contracts or either of them ? Analogy points to both contracts being void, though each separately is capable of fulfilment. The further question, however, arises, whether, in the case supposed, the goods are really specific so as to come within this section. Sect. 7. Goods peeish- inq before SALE BUT AFTER AGREE- MENT TO SELL. 7. Where there is an agreement to sell ^"^ specific goods,^''^ and subsequently the goods, without any fault ^°^ on the part of the seller or buyer, perish before the risk passes to the buyer,^''^ the agreement is there- by avoided.^'^ Notes. {a) " Agreement to sell." Defined Sect. 1 (3). (6) " Specific goods," i.e. " goods identified and agreed upon at the time a contract of sale is made." Sect. 62 (1). (c) " Fault " means wrongful act or default. Sect. 62 (1). {d) " Before the risk passes the buyer." Compare Sect. 1 (4) with Sect. 20, and see Sect. 18, Eules 2 and 3. (e) " Avoided," i.e. becomes or is made void. The Scottish term " reduced " is analogous, but it implies a formal decree of a Court. See Note (a). Sect. 23 post, p. 114. COMMENTAEY. The rule here, as in the previous section, applies only to specific goods. In Sect. 6 the goods were the subject of a " sale " under which, had they not previously perished, both property and risk would have passed to the purchaser ; here, the goods, though specific, are subject only to an " agreement to sell," under which the risk has not passed. The section will apply to the cases specified in Sect. 18, Eules 2 and 3, and also to any case where the parties have agreed to alter the primd facie rule by postponing the passing of the risk. It wUl be observed that, although the word " sale " is FORMATION OF THE CONTRACT. 35 inadvertently used in the rubric, it is not the sale but the Sect 7. passing of the risk which forms the terminus ad quern of the rule. A " sale " impUes that the property has passed/ but, though primd facie the property and the risk pass together, the conjunction is not essential and may be altered by agreement.^ The leading case upon which the rule of this section is founded is that of Rowell v. Coupland^ (1874), where the subject of sale was 200 tons of a special class of potatoes, grown on particular lands. The potatoes having afterwards suffered from blight, so that the seller was only able to deliver 80 tons, he was held to be under no obligation as to the remainder. This judgment was founded on Taylor v. Caldwell* (1863), where an important general principle was laid down in these words : " In contracts in which the per- formance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance." ^ The Price. 8. — (1.) The price ^"^ in a contract of" sale^'^ may be Sect. 8. fixed by the contract, or may be left to be fixed in mbnt op price. manner thereby agreed, or may be determined by the course of dealing ^°^ between the parties. (2.) Where the price is not determined in accord- ance with the foregoing provisions the buyer must pay a reasonable price. ^'^ What is a reasonable price is a question of fact dependent on the circumstances of each particular case.^^^ 1 Sect. 1 (3). 2 Sect. 20. 3 L.E. 9 Q. B. 462, 1 Q.B. Div. 258. * 3 B. & S. 826. 5 3 B. & S. at p. 839. — Per Blackburn, J. As to the eflfeot of the subject of sale having only partially perished, see Com., Sect. 6, ante, p. 32. 36 SALE OF GOODS ACT 1893. Sect. 8. Notes. (a) " Price." The price must be in money. It is defined in Sect. 1 (1) as a "??m»!,«2/ consideration." Payment of the price and delivery are concurrent conditions, Sect. 28. As to the effect of the Act upon barter in England and Scotland respect- ively, see Com. mfra, p. 39. (&) " GmtriKt of sale." Defined Sects. 1 (1) and 62 (1). (c) "Course of dealing." This is usage between the parties, but not " usage of trade." The latter may, however, be implied. See Sect. 55 and Com. infra, p. 258. {d) "Reasonable price." The current price at the port of shipment may be exceptional, and therefore not reasonable. See Acebal v. Levy'^ (1834). The lavi^ of Scotland seems to be altered by this sub-section. Com. infra. («) If a rate has been fixed, but the exact amount cannot be ascertained in consequence of the goods having perished, the Court or the jury may make a reasonable estimate.^ Ascertainment of price. Differences between English and Scottish law as to reason- able price. ' COMMENTAEY. The price may be ascertained in three different ways : (1) fixed by the contract ; (2) fixed in manner specified in the contract ^ ; (3) determined by usage between the parties. Palling all of these, the buyer must pay a reasonable price. The section is declaratory of the law of England, but, in so far as it admits of the fixing of a reasonable price, it seems to alter the common law of Scotland. The law of England admitting the validity of a sale, where the price is not stated, and recognising a reasonable price, was settled by Acebal v. Levy* (1834), and was extended to executory contracts by Hoadley v. M'Laine^ (1834). In Eoman law there could be no sale without a definite price fixed by the contract, or in some mode provided by the contract. " Until 1 10 Bing. 376. ^ Martineau v. Kitchmg (1872), L.E. 7 Q.B. 436.— Per Lord Blackburn at p. 456. ' For example, by valuation, as to which special rules are enacted by Sect. 9. * 10 Bing. 376. See also Falpy v. Gfibson (1847), 4 C.B. 837, especially the remarks of Wylde, C. J., at p. 864. = 10 Bing. 482. See also Joyce v. Swann (1864), 17 C.B. N.S. 84, per Erie, C. J., at p. 93. It may, however, be of the essence of the bargain that the price be determined by the contract itself, in which case there is no binding agreement until it is fixed— Pap'e v. Norfolk (1894), 70 L.T. N.S. 781. FORMATION OF THE CONTRACT. 37 SO fixed there was no obligation, and therefore no con- Sect. 8. tract." ^ This rule of the Eoman law has been adopted in Scotland, hence all our Institutional writers describe a price certain as an essential of sale.^ It is true that if the sale had been " executed," i.e.. if delivery had taken place, the buyer was obliged to pay the market price of the goods actually received by him.^ This, however, was not due to agreement, but to the fact that something had followed on the supposed contract which could not be undone.* The party receiving the benefit was in equity bound to recom- pense the other at the market rate, but he had no obliga- tion in regard to any part of the goods not delivered.^ The same principle held where there was mutual error regarding the price. The purchaser was bound to pay the market value of the goods, but only in so far as res non integrce.^ ' Moyle, Sale in tfie Ciml Law,-p.6S ; 'Ma.ckiutoah, HomanZaw of Sale, -p. 2S; Dig. 45. 1. 75 and 18. 1. 7. 1 and 2 ; Inst. iii. 23. 1 ; Benjamin on Sale, p. 376 ; Blackburn on. Sale, p. 242. " Contracts of a kind with which we are so familiar, as where one goes to a shop and gets goods on credit without asking the price, or directs a shopkeeper to make one an article of a particular description without asking what it will cost, are in the Civil Law not contracts of sale at all, but innominate : the tradesman who supplies the goods, or who makes and delivers the article which has been ordered, sues for a money compensation not by actio ex vendito, but by actio prcescriptis verbis." — Moyle, supra, p. 69. 2 Stair, i. 14. 1 ; Mackenzie, iii. 3. 1 ; Bankton, i. 19. 3 ; Ersk. iii. 3. 4 ; Bell's Com. i. 461 ; Bell's Prin. , Sect. 92 ; Bell on Sale, p. 18. The same holds in France, Civil Code, Art. 1591. 5 Leslie v. Miller (1714), M. 14197 ; Bertrams v. Barry (1818), 1 Mur. 348 ; Wilson v. M. Breadalbane (1859), 21 D. 957 ; Stuart and Co. v. Kennedy (1885), 13 Ret. 221 ; Malloch v. HodgMon (1849), 12 D. 215 ; CutUertsony. Lowes (1870), 8 Macp. 1073. Where invoices stating a price were sent with the goods and the price was not timeously challenged, it was held fixed though above the market rate. — Mills v. Hamilton (1830), 9 Sh. 111. * Per Lord President Inglis in Stuart and Co. v. Kennedy (1885), 13 Ret. at p. 223. ^ It is not easy to reconcile the theory of no contract with the common case of goods bought in a shop on credit without price stated, especially if there had been a previous course of dealing between the parties. Such a transaction would probably have been recognised as binding in Scotland as well as in England, although the goods had not been actually carried away by the buyer. It is also to be observed that where recourse was had to the market price, it was the market price at the date of the supposed contract, not at the date of the delivery of the goods— Malloch v. Hodgjdon (1849), 12, D. 215 ; Champion v. Miln^ (14th January 1811), E.C. The inconsistency is no doubt due to the influence of English law, and may be noticed elsewhere, e.g. in Bell on Sale, p. 19. " Sword V. Sinclair (1771), Mor. 14241 ; Wilson v. M. Breadalbane (1859), 21 D. 957 ; Stuart and Co. v. Kennedy (1885), 13 Ret. 221. In Anderson v. Wilson (1856), 19 D. 39, the executors of a deceased seller sued for the price as it appeared in deceased's books, and refused delivery at a less price alleged 38 SALE OF GOODS ACT 1893. Seet. 8. Price ascer- tained by arbitration, etc. Course of dealing. We thus find that previous to the passing of this Act the rules of English and Scottish law as to price differed in principle as regards executed contracts, and were wholly different where the contract was executory. Now, however, the Scottish law has been assimilated to that of England. In Scots law, so long as the contract provided a means of fixing the price, the requirement of a certain price was satisfied : ^ there is therefore no change in this respect. The price may be left to the decision of arbiters,^ or may be fixed by some public standard,^ or may even be left to the decision of one of the parties.* The price may be alterna- tive, and made to depend on some extraneous event,^ or it may be agreed to be fixed by the result of an examination of books,* or it may be left to be fixed by weight, or measurement, or test.''' The " course of dealing between the parties " may be quite special, and has no necessary connection with usage of trade. Trade usage may, however, be implied, so as to fix the price or the mode of payment,^ as where a particular trade allows a discount in respect of settlement when due. In some trades a large proportion of the price is thus dis- counted ; but this is not a proper trade discount, and if the by the buyer to be the price arranged. In the course of the proceedings the pursuers lodged a minute accepting the price named by the buyer, but it was held that the previous refusal to deliver was a breach of contract entitling the buyer to resile. The case seems one of mutual error as to price, which, as the law then stood, might have justified a finding of no contract ; but the existence of a contract is assumed. ^ E.g. the same price " as such a person gave or as shall be had from others by the seller for the like goods, or as such a person shall apnoint." — Stair, i. 14. 1. 2 E. Selkirk v. Nasmith (1778), Mor. 627. But the reference may be such as to be a mere wager, and therefore il\egs.\~£rogden v. Marriott (1836), 3 Bing. N.C. 88 ; Mourke v. Short (1856), 5 El. & Bl. 904. ' Such as fiars prices, Treas. of Aberdeen v. Gordon (17fiO), Mor. 4415 ; or the lowest market price of the day — Champion v. Milne (14th January 1811), F.C. * E.Montrose v. Scott (1639), Mor. 14155 ; Steven v. Mobertson (1760), Mor. 3158; Lavaggi v. Pirie and Sons (1872), 10 Macp. 312. See Com., Sect. 9 post, p. 43. * Smith V. Brown (1735), Elchies, Sale, No. 1. ^ E.g. in Edinburgh United Breweries, Limited, v. Nicholson's Trustee (1893). 20 Ret. 581, Affd. (1894), 21 Ret. H.L. 10. ' As in Hansen v. Craig and Rose (1859), 21 D. 432. See Sect. 18, Rule 3. 8 See Sect. 55 ; also Stewart v. Gordon (1831), 9 Sh. 466 ; Athya and Co. v. Eowell and Go. (1866), 18 D. 1299 ; Bell's Com. i. 465 ; Bell's Pri«., Sect. 101. FORMATION OF THE CONTRACT. 39 seller requires to raise action he is under no obligation to Seet. 8. allow the reduction.^ Mere inadequacy of price without fraud will not avoid inadequacy the sale.2 Nor is the remedy of the later Eoman law avail- °^ P"'=6- able to the seller so as to enable him to rescind the contract where less than half the real value has been given.^ The price must be in the form of money, otherwise the Act does not contract is barter or exchange and not sale. The Bill appjy*° ..,,,- . , exchange. origmally had a section explanatory of " exchange " and providing for the application of the Act to that contract subject to any necessary modifications, but this clause was deleted in Committee, and we are left to infer that the Act does not apply to exchange.* Where, however, the considera- tion for the transfer of goods is partly money and partly other goods, the contract is deemed to be one of sale and not of exchange.^ In Scotland the distinction between sale and barter is Barter in perhaps of greater importance than in England. The ^^o**'^^ '*"«'• Scottish law follows more closely that of Eome, where sale was a consensual, while barter was a real, contract. Three important distinctions operated in Eoman law,® but of these only one is capable of being applied to Scotland. It may Passing of the be expressed thus. In sale the risk passed to the buyer "^'^' ' Duncan v. Aitchison. and Co. (1879), 6 Ret. 582. ^ Ersk. iii. 3. 4 ; M. P. Brown on Sale, pp. 147, 148 ; Fairie v. Inglis (1669), Mor. 14231 ; Zatta v. Fark and Co. (1865), 3 Macp. 508. In Dawson V. Muir (1851), 13 D. 843, vats were sold by auction for £2 and were after- wards discovered to contain white lead valued at £300. The sale was sus- tained. The "consideration" which English law requires in order to validate a simple contract is not recognised in the law of Scotland, and even in England it does not affect the question of adequacy, for the consideration may be quite illusory. See Appendix III. post, p. 341. 3 This was enacted by Diocletian and Maximian, a.d. 285, Cod. 4. 44. 2 ; Moyle, p. 75. It was pleaded but not sustained in the Scottish case, Fairie v. Inglis (1669), Mor. 14231. * The question as to whether there is any difference in principle between sale and exchange gave rise to a long controversy between the Sabinian and Proculian schools (Benjamin on Sale, pp. 1, 2, note). The modern law on // the subject is elaborately discussed by an American writer, who argues that! the difference is merely nominal. —Travis on Sale (1892), vol. i. pp. 1, 32. 5 Chalmers on Sale of Goods (1890), p. 87, and cases there cited. It was so in the Civil Law (Dig. 19, 1. 6. 1). "Where some article was given in addition to money, it was in old times called "to boot" or "to the bargain," e.g. in Fairie v. Inglis (1669), M. 14231, and Morrison v. Glen (1712), M. 14236. 8 Moyle, Sale in the Civil Law, p. 5. 40 SALE OF GOODS ACT 1893. Sect. 8. Differences of opinion as to effect of barter. Effect upon law of Scot- land of ex- clusion of exchange from the Act. Effect of pay- ment of the price upon the passing of the property. from the date of the contract without regard to delivery : in barter, if one party conveyed and the other was unable .to do so on account of the subject having perished, the former was entitled to get his property back. It is possible that this distinction holds in Scots law, though no direct authority can be cited. Erskine indeed states expressly that "the nature of both contracts, and the obligations on the contrac- tors, are in effect the same " ^ ; and further, that barter " is by our practice fully perfected by consent alOne without any interventus rei"^ In the opinion of M. P. Brown these dicta are inaccurate, Erskine himself " having stated a very important distinction between sale and exchange." ^ Bell in turn expresses dissent from M. P. Brown's criticism on the ground that he proceeds on a distinction peculiar to excambion of land.* It will be observed, however, that, granting the illustration as to excambion of land to be valueless, the question as to the passing of the risk is not touched by any of the writers mentioned. It may therefore be suggested that the exclusion of exchange from the operation of this Act is of importance in Scotland. An executory barter may be possible,^ yet it does not follow that either property or risk will pass before delivery. In Eoman law the passing of the property followed, not from the contract as in England, nor even from delivery as in Scotland, but from payment of the price, so that, unless credit were expressly given, delivery to the buyer did not make him owner if the price remained due.^ This rule had no place in the law of Scotland, but it may have con- tributed to a misconception on the part of some Scottish writers. Thus Bell makes payment of the price the test in certain cases of constructive delivery,^ and Lord Ivory, in 1 Ersk. iii. 3. 4. " Ersk. iii. 3. 13. ^ M. P. Brown on Sale, p. 151, referring to Ersk. ii. 3. 28. ■* Bell's Prin., Sect. 92, note (m). ^ Its validity as a contract is expressly stated by Stair. ' ' Though neither of the things exchanged be delivered, the agreement is valid." — Stair, i. 14. 1. 8 Inst. ii. 1. 41 ; Dig. 14. 4. 5. 18 ; Dig. 18. 1. 19 and 53 ; Moyle, p. 145 ; Mackintosh, p. 41 ; Bell's Com. i. 257. ' Bell's Com. i. 177, note ; i. 217 ; i. 224, note. In the last of these passages Bell enters into a detailed criticism of the supposed principle, but proceeds upon a mistaken view of stoppage in transitu, which is corrected by FORMATION OF THE CONTRACT. 41 his notes to Erskine, falls into a similar error.^ There is Sect. 8. nothing, however, to prevent a special agreement such as that of hire-purchase, under which, notwithstanding delivery, the property is not to pass to the purchaser until the price is paid.^ Payment of the price must be made by legal tender if Legal tender. such be insisted on. Legal tender in_ScotlaniJS-^oii£ned to coinage, viz. gold for a payment of any amount; silver for a payment not exceeding forty shillings ; bronze for a payment not exceeding one shilling.^ But an objection to. tender of payment in any commonly recognised currency,/ such as Scotch bank notes in Scotland, will not be looked' upon with favour by the courts.* Where payment is made under a condition either ex- Conditional pressly or tacitly acquiesced in by the seller, the condition p^^™®° • must receive effect. Thus where a cheque was enclosed in a letter requesting in return a guarantee in regard to de- livery of the goods, the receiver, having cashed the cheque but refused the guarantee, was held liable in repayment.^ Proof of payment of the price differs in England and Proof of Scotland. "Written or oral evidehce may be offered in P^^™™ • England, but in Scotland only written evidence is allowed, except in case of ready money, or where the amount is under £8:6:8. The Mercantile Law Commission of 1855 recommended that the law of Scotland in this respect should be assimilated to that of England,® but the recommendation did not receive statutory effect in the Act of 1856.'' 9. — (1.) Where there is an agreement to sell ^"^ goods Sect. 9. ■ • , 1 r> T 1 j_i Aqeeembnt to on the terms that the price is to be nxed by the sell at VALUATION. his editor (Bell's Oom., 7th ed. i. p. 217, note). Elsewhere Bell says : " Nothing is better fixed than that payment of the price has no effect whatever on the transfer of the property " — Oom. i. 192, note. 1 Ersk. (Ivory's ed.), p. 645, note. ^ See as to hire-purchase, Com., Sect. \1 post, p. 83. 2 Coinage Act 1870, 33 Vict. c. 10, Sect. 4. Bank notes of Scotch Banks 1 are not a legal tender, and Bankof England notes, although a legal tender in / England, are not so in Scotland (8 & 9 Vict. e. 38, Sect. 15). ' ^ See in England Polglass v. Oliver (1831), 2 Or. & J. 15, and other cases cited by Benjamin, Sale, p. 423. « Semple v. Wilson (1889), 16 Ret. 790. 8 2nd Report, p. 7. M9 & 20 Vict. 0. 60. 42 SALE OF GOODS ACT 1893. Sect. 9. valuation of a third party /'^ and such third party cannot or does not make such valuation, the agree- ment is avoided ;<"> provided that if the goods or any part thereof have been delivered to and appropriated ^^ by the buyer he must pay a reasonable price ^'^ therefor. (2.) Where such third party is prevented from making the valuation by the fault ^ of the seller or buyer, the party not in fault may maintain an action for damages against the party in fault.^^^ Notes. (a) ''Agreement to sell." Defined Sect. 1 (3). \h) " Valuation of a third party." In Scotland the price may even be left to the determination of one of the parties them- selves. Com. infra, p. 43. (c) " If the persons appointed as valuers fail or refuse to act, there is no contract in the case of an executory agreement, even though one of the parties should himself be the cause of prevent- ing the valuation." ^ But the second sub-section gives a remedy in the form of damages] Com. infra, p. 43. (d) "Appropriated " here seems equivalent to " accepted." See Sect. 35. (e) " Beasonable Price." See Sect. 8 (2). (/) "'Fault; i.e. wrongful act or default," Sect. 62 (1). See also Sects. 7 and 20. {g) " Where parties have agreed that something shall be done which cannot effectually be done unless both concur in doing it . . . each agrees to do all that is necessary on his part for the carrying out of that thing." ^ Commentary. This section is supplementary to Sect. 8, which declares that the price may be left to be fixed in manner agreed upon in the contract. The rule as stated is that of the ^ Benjamin on Sale, p. 90. ^ Per Lord Blackburn in Mackay v. Dick and Steveiison (1881), 8 Ret. H.L. 37 at p. 40. FORMATION OF THE CONTRACT. 43 Civil law and of the law of Scotland, except in so far as (failing a price being fixed) it imports a reasonable price, and after delivery imputes payment to contract rather than to recompense or quantum meruit} The law of Scotland, however, goes further than the Roman law,^ and permits not merely a valuation by a third party such as this section contemplates, but a reference of the amount of the price to one of the contracting parties.* "Where the price has been referred to a third party, the death of one of the parties to the contract before the referee has fixed the price, will not avoid the agreement.* The first sub-section is declaratory of English law,* but where the valuation had been prevented by the fault of seller or buyer the law previous to the Act was doubtful. In Thumell v. Balhirnie^ (1837) the law was assumed to be as now stated, though the point did not arise for de- cision. On the other hand, in Vickers y. Vickers'' (18Q7), Page- Wood, V.C., refused specific performance on the ground that there was " no existing contract," a reason which would equally prevent a claim for damages. If an arbiter accept office he cannot refuse to proceed to a final determination,^ and in England a valuer in such circumstances will be hel d liable in^damaggs.^ Sect. 9. Eeferenoe to one of the parties. Effect of death of third party. Fault of seller or buyer. Arbiter's I refusal toj proceed. / 1 Inst. iii. 24. 1 ; Dig. 18. 1. 15. 1 ; Ersk. iii. 3. 4 : M. P. Brown on Sale, p. 148 et seq. See also Com., Sect. 8, s^ipra, p. 37. ^ Moyle, Sale in Ciml Law, p. 69 ; Mackintosh, Roman Law of Sale, p. 71 ; Dig. 18. 1. 35. 1. ; Cod. 4. 38. 13. ^ StevenT. Sobertson (1760), Mor. 3158 (seller) ; H. Montrose v. Scott (1639), Mor. 14155 (buyer) ; Lavaggi v. Pirie and Son^ (1872), 10 Macp. 312 (buyer). See also Gfraham and Co. v. Pollock and Caldwall (1763), Mor. 14198. — Stair, i. 14. 1 ; Ersk. iii. 3. 4 ; Bell's Prin., Sect. 92 ; M. P. Brown on Sale, p. 150. All these text-writers state or assume that the price so fixed is not absolute, but subject to correction by a judge, and Stair extends the same rule to any reference of the price to a third party. In either case, however, it is difficult to see how a judge could interfere unless upon a formal reduction of the award, as in the case of an ordinary reference. As to English law on this subject, see Haule v. Hemyng (1617), Cro. Jac. 432, cited in Vyse v. Wake- field (1840), 6 M. & W. 442, 454 ; Solrms v. Twist, (1614), Hob. 51, cited in MaUn v. Watkinson (1870), L.R. 6 Ex. 25, 29. ^ E. Selkirk v. Nasmith (1778), M. 627. 5 Ess V. Truscott (1837), 2 M. & W. 385 ; Clarke v. Westrope (1856), 18 C.B. 765. 6 2 M. & W. 786. '■ L.R. 4 Eq. 529. 8 Edin. and Olas. Ry. Co. v. Marshall (1853), 15 D. 603. 8 Jenkins v. Beetham (1854), 15 C.B. 189 ; Cooper v. Shuttleworth (1856), 25 L.J. Ex. 114. Sect. 9. 44 SALE OF GOODS ACT 1893. Although the agreement is avoided under the first sub- section, the buyer, if he has received and retained or used the goods, will be liable upon a quantum, meruit} Sect. 10. Stipulations as to time. Conditions and Warranties. 10. — (1.) Unless a different intention ^"^ appears from the terms of the contract, stipulations ^'> as to time of payment are not deemed to be of the essence ^°^ of a contract of sale/*^ Whether any other stipulation as to time is of the essence^') of the contract or not depends on the terms of the contract. (2.) In a contract of sale " month " means prim4 facie calendar month /'^ Notes. (a) "Different intention." E.g. the seller may stipulate a right of re-sale on the buyer's default, which right, if exercised, rescinds the contract [Sect. 48 (4)]. (b) "Stipulations." This word is used to include both "con- ditions" and "warranties." "A stipulation may be a condition though called a warranty" [Sect. 11 (1) (6)]. (c) "Essence." Any stipulation which is of the essence of a contract of sale is a " condition " ; if it is not of the essence of I the contract it is a " warranty." See definition of " warranty " [Sect. 62 (1)]. {d) "Contract of sale." Defined Sects. 1 (1) and 62 (1). (e) " Calendar month." So also in Bills of Exchange Act 1882 ^ [Sect. 14 (4)]. In all Acts, unless the contrary intention appears, " month " means " calendar month." ^ COMMENTAEY. Conditions. The remainder of Part I. (Sects. 10 to 15 inclusive) deals with conditions and warranties. A condition {i.e. a suspensive condition or condition precedent) is a stipulation ^ Clarke v. 2 45 & 46 Yiot. c. 61. (1856), 18C.B. 765. = 52 & 53 Vict. 0. 63, Sect. 3. FORMATION OF THE CONTRACT. 45 which goes to the essence of a contract, so that non-fulfil- Sect. 10. ment either avoids the contract or makes it voidable in the option of one of the parties. In the former case the con- tract itself is conditional,^ so that if the condition is not fulfilled both parties are free from obligation.^ In the latter case the condition is one (not impossible in itself), the non-fulfilment of which by one of the parties constitutes a breach of contract by him.* In the event of such a breach, the other party may either repudiate or maintain the contract, and if he repudiate he is not only free from his counter obligation, but he may obtain damages in respect of the breach.' By the former law of Scotland, if the party not in fault desired to maintain the contract, he was ex- cluded from any claim of damages. It was a pre-requisite to such a claim that the contract should be repudiated and annulled, and both parties placed as far as possible in the same position as if it had never been entered into. Now, however, the buyer has an alternative remedy against the seller, who is in breach of a condition. If the goods are offered for delivery he is entitled as formerly to reject them and repudiate the contract, or he may accept the goods and maintain the contract without depriving himself of his ^ Com., Sect. 1, ante, p. 7. 2 Kelman v. JBmr's Trustee (1878), 5 Eet. 817 ; Ivory's Erskinc, p. 647 (note). See also numerous English oases, such as Boyd v. Siffkin (1809), 2 Camp. 326 ; Johnson v. Macdmiald (1841), 9 M. & W. 600 ; Benjamin, p. 569 ct seq. ^ As to impossibility of performance see Stair, i. 10. 13 ; Ersk. iii. 3. 84 ; Dig. 18. 1. 8. pr. ; Benjamin, p. 81; M. P. Brown, p. 110; Gouuns v. Christie (1873), 11 Macp. H.L. 1 ; Gillespie and Co. v. ffowden and Go. (1885), 12 Ret. 800 ; SmUh v. Riddell (1886), 14 Eet. 95 ; Korth British My. Co. V. Benhar Coal Co. (1886), 14 Ret. 141. "An agreement to do an act impossible in itself is void " (Indian Contract Act, Sect. 56). In discuss- ing the different kinds of impossibility of performance, Pollock says: "An agreement is not void merely by reason of the performance being impossible in fact, nor does it become void by the performance becoming impossible in fact without the default of either party, unless, according to the true inten- tion of the parties, the agreement was conditional on the performance of it being or continuing possible in fact. Such an intention is presumed where the performance of the contract depends on the existence of a specific thing." —Pollock on Contracts, 6th ed. p. 382. See also Sect. 11 (3) of this Act. •■ " A condition is either a promise or the statement of a fact in a contract upon the truth of which the existence of a contract is to depend "—Behii v. Bnrncss (1862), 3 B. & S. 751 ; Coh-iii v. Short (1857), 19 D. 890 ; Anson on Contracts, 6th ed. pp. 146, 201. » Benjamin, p. 940 ; Bell's Bnn., Sect. 120. 46 SALE OF GOODS ACT 1893. Sect. 10. right to claim damages in diminution or extinction of the price.-^ Warranties. The term " Warranty " is used in the Act in a peculiarly English sense. It is defined as regards England and Ireland as " an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated." ^ In Scotland, however, the word " warranty " is generally used in its natural sense of guarantee (i.e. condition), and it is practi- cally so defined as to Scotland in Sect. 62 (1).^ Conditions in Scotland are divided into " suspensive ' and "resolutive," corresponding to what are termed in England conditions " precedent " and " subsequent." * A suspensive condition holds the sale in suspense until the condition is fulfilled. A resolutive condition implies that a sale has taken place, but that in a certain event it will be resolved or " dissolved," and the subject of sale become unsold, res fit inempta.^ In the event of the sale Conditions in Scotland. Suspensive and resolutive. 1 Sects. 11 (2) and 63 (1). ^ Sect. 62 (1). Anson points out no less than six different meanings of the word "warranty " in English law {Contracts, 6th ed. p. 303). The defini- tion given above is the one usually recognised in connection with sale. It is founded on the judgment of Lord Abinger in Chwnter v. Eophims (1838), 4 M. & W. 399, where warranty is distinguished from condition. Both are parts of the contract, but a condition is fundamental and essential, while a warranty is only collateral. But both condition and warranty are to be dis- tinguished from mere representation, which has no effect on the contract of sale except where the representation is fraudulent. The use of a particular word will not, however, affect the substance of the thing intended. " A stipulation may be a condition, though called a warranty in the contract " [Sect. 11 (1) (J)], and in like manner a representation may amount to a warranty. _ " When a, contract is entered into between two parties every representation made at the time of entering into the contract may or may not be intended as a warranty or as a promise that the representation is true." — Per Bowen, L.J., inBentsen'v. Taylor, /Som, ami (7o. [1893], 2 Q.B. at p. 281. ^ The use of the word " warranty " in Sect. 12 (2) is exceptional in the case of Scotland, at least in connection with the sale of goods. * In the bill as introduced in 1891 the interpretation clause bore, "A con- dition includes a resolutive as well as a suspensive condition." In Committee of the Lords the words were changed to "condition means a condition prece- dent," but at the report stage in 1892 all reference to "condition" was deleted from the clause. " Stair, i. 14. 3 to 5 ; Bell's Com. i. 256 et seq. ; M. P. Brown, pp. 82 et seq. and 427 et seq. As an example of a resolutive condition, see Oraham V. Wilson (1836), 14 Sh. 866. In Mom/rimy v. Macredie's Creditors (1799), FORMATION OF THE CONTRACT 47 being resolved, the rights of parties will be extricated accord- Sect. 10. ing to agreement, or failing agreement by restoring each party as nearly as possible to his former position. The rights of third parties are affected differently by the two kinds of conditions. A suspensive condition will be good/ against third parties acquiring a title from a person to I whom the property in the goods has not passed, and who is | consequently not the true owner.^ A resolutive condition, on the other hand, does not prevent the buyer from giving a title to others which will prevent the seller from reclaim- ing the property.^ If^ a condition is truly suspensive of the sale it will not be affected by Sect. 25 (2).' There is no sale pending the conditlbiirand therefore no buyer to whom the terms of the section referred to can be applied. Thus, under Sect. 18, Eule 4, where goods are delivered to the buyer on " approval " or on " sale or return," the property does not pass till the occurrence of the events mentioned in the section, which in each case is practically a condition sus- pensive of the sale. It is true that one of the parties will be bound irrevocably in the event of the other exercising the option conferred upon him. If, however, the option is not exercised, not only does the property not pass, but both parties are as free as if the contract had never been entered into.^ There may, however, be a condition, not suspensive of conditions not suspensive of Mor. Sale, App. No. 1, the Lord Ordinary (Meadowbank) thought the con- ^'^^ ^''^^• dition resolutive, but the Court altered and found it suspensive. The final judgment was, however, founded on an erroneous view of stoppage in troMsitu. The delivery was to the buyer himself, hence there could be no transitus. More (notes to Stair, Ixxxviii.) views the condition in Macartney's Case as resolutive. ^ See Sect. 21. But the holder of the goods, if a "mercantile agent," will be subieot to Sect. 2 of the Factors Act, 1889 (52 & 53 Vict. c. 45). ^ Stair, i. 14. 4 and 5 ; Bankton, i. 19. 29 et seq. ; Ersk. iii. 3. 11 ; M. P. Brown, p. 427 et seq. Where delivery has been obtained under a resolutive con- dition the condition is not effectual against the buyer's creditors. See Ersk. iii. 3. 12, and Ivory's note, p. 648 ; Pothier, 06%, No. 224 ; Bell's Com. 1. 259, 260 ; Bell's Prin., Sect. 110. In Allan and Go's Trustee v. Ounnand Co. (1883), 10 Ret. 997, a resolutive condition of the nature of a, pactum de retro- venderulo was held effectual against creditors of the buyer, but the case is of doubtful authority. See post, p. 278. * The sub-section referred to is taken almost verbatim from Sect. 9 of the Factors Act 1889 (52 & 53 Vict. c. 45), extended to Scotland by the Factors (Scotland) Act 1890 (53 & 54 Yiot. c. 40). * See Com., Sect. 18, Rule ipost, p. 94. 48 SALE OF GOODS ACT 1893. Sect. 10. stipulations a to time of payment. Time of pay- ment in con- nection with continuing contracts. the sale, but merely suspending the passing of the property, as to which see Com., Sect. 17 fost, p. 83. This section deals with stipulations as to time of pay- ment, and is founded on the English case of Martindale v. Smith ^ (1841). The law of Scotland is not changed. Unless expressly so agreed, payment of the price upon delivery of the goods, or upon a day named, is neither a condition of the sale nor of the passing of the property.^ But, as we have seen, the stipulation may be so expressed as to be suspensive,^ and such a stipulation may also be imported into the contract by usage of trade.* The question whether time of payment is an essential condition may arise in connection with a continuing contract. Thus where coal was to be delivered in monthly instal- ments, and the price settled monthly, it was held that the sellers were not bound to continue deliveries into another month while the price of the deliveries for the previous month remained unsettled. " The completion of the monthly delivery," says Lord Justice -Clerk Moncreiff, "and the obligation to pay the monthly price, were in this contract concurrent, both from its general import and because it was plainly contemplated that the sellers, who were not coal- masters, were to be assisted in their monthly deliveries by the settlement of the price from time to time. It therefore 1 1 Q.B. 389. ^ In JUnn v. Shields (1863), 2 Macp. 88, the contract, as interpreted by the Court, was "cash on delivery." Cash not having been paid on the delivery of a small portion of the goods, the seller maintained that his obligation to deliver the remainder was at an end ; in other words, that in his option the contract was rescinded. This plea was negatived on the ground that the mode and time of payment had not been made an express condition. Lord Justice-Clerk Inglis held that the seller had mistaken his position. (2 Macp. at p. 93). The mere fact that payment by draft forms a term of the contract, and that the buyer has not accepted the seller's draft, will not prevent the property passing unless a. jus disponendi (see Sect. 19) has either been reserved in the contract, or is to be inferred from the circumstances. Compare Clarke and Co. v. Miller and Sons' Trustee (1885), 12 Ret. 1036, with Brandt and Co. v. Dickson (1876), 3 Ret. 375. Time bf payment was, however, held to be of the essence of the contract in Young v. Dunn (1785), Mor. 14191 ; Hills v. Buchanam (1785), Mor. 14200 ; Affd. H. of L. (1786), 3 Pat. App. 47 ; Brodie v. Todd and Co. (20th May 1814), F.C. 3 Stair, i. 14. 4 ; Ersk. lil. 3. 11 ; Bell's Com. i. 149. See also Sect. 19 as to reservation oijus disponendi. * E.g. Turnbull v. M'Lean wnd Co. (1874), 1 Ret. 730. FORMATION OF THE CONTRACT. 49 cannot he said that the time of payment was less of the essence Sect. 10. of the contract than the payment itself." ^ Stipulations as to time other than time of payment are stipulations as entirely matter of construction. " Where a purchaser tij^n time of means to make it an essential condition of his bargain that payment. certain things should be done by a given day, he must take care to express this condition in the most distinct terms, and on failure to fulfil the condition he should immediately declare his bargain to be at an end." ^ In Bowes v. Shand ^ (1877) a provision of the contract that rice was to be shipped " during the months of March and [or] April " was held to import an essential condition of time, so that rice shipped during February did not faU under it.* In giving judgment in the Divisional Court Blackburn, J., said : " It was argued, or tried to be argued, that it was immaterial when the rice was shipped ... its being shipped at another and a different time, being (it was said) only a breach of stipulation which could be compensated for in damages, but I think that that is quite untenable." ^ This judgment was reversed in the Court of Appeal,^ but was restored in the House of Lords.'^ 11, — (1.) In England or Ireland — Sect. 11. ia.) Where a contract of sale is subject to any when con . ,. „ .„., - , , ,, , DITION TO t condition ^"^ to be luliilled by the seller, the treated as DITION TO BE TREATED AS WARRANTY. 1 TumbuU V. M'Lean and Co. (1874), 1 Ret. 730, at p. 738. See also Com., Sect. 31 post, p. 152, and cases there discussed. 2 Per Lord Balgray in Smbum v. Baird (1832), 10 Sh. 765. The condi- tion founded on was held not essential in Raeburn v. Baird, supra, and in Forbes v. Campbell (1885), 12 Ret. 1065 ; but it was held otherwise in Eannay V. Stothert (1788), Mor. 14194 ; Boib v. Cruickshank (1840), 2 D. '988 ; Colvin V. Short (1857), 19 D. 890 ; M'Bride v. Samilton aiid .Son (1872), 2 Ret. 775. See Bell's Com. i. 258, and remarks of Lord Shand in Grieve, Son, and Go. v. Konig (1880), 7 Ret. 521, at p. 524. '^ 2 App. Cas. 455. ^ The circumstances of the Scottish case, Whitson y. Neilson and Co. (1828), 6 Sh. 579, bear a certain resemblance, but the specialties fully justified the finding of the Court that the seller's obligation as to delivery had been implemented. s 1 Q.B.D. at p. 480. 6 2 Q.B.D. 112. ' 2 App. Cas. 455. See especially per Lord Cairns at p. 463, and see also Renter v. Sala (1879), 4 C.P.D. 239, per Cotton, L. J., at pp. 246, 249. E 50 SALE OF GOODS ACT 1893. Sect. 11. buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty/''^ and not as a ground for treating the contract as repudiated. (&.) Whether a stipulation in a contract of sale is a condition/"^ the breach of which may give rise to a right to treat the contract as re- pudiated, or a warranty,^''^ the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the con- tract. ^°^ A stipulation may be a condition, though called a warranty in the contract, (c.) Where a contract of sale is not severable,^'*^ and the buyer has accepted ^^^ the goods, or part thereof ; or where the contract is for specific goods, the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the con- tract as repudiated, unless there be a term of the contract, express or implied,^-''^ to that eflfect. (2.) In Scotland, failure by the seller to perform any material part ^^ of a contract of sale is a breach of contract, which entitles the buyer either within a reasonable time ^''^ after delivery to reject ® the goods and treat the contract as repudiated, or to retain the goods and treat the failure to perform such material FORMATION OF THE CONTRACT. 51 part as a breach which may give rise to a claim for Sect. 11. compensation or damages. ^■'^ (3.) Nothing in this section shall affect the case of any condition or warranty, fulfilment of which is excused by law by reason of impossibility^"^ or otherwise.® '' Notes. (a) " Condition " is here opposed to " warranty " and means a stipulation, the breach of which gives rise to "a right to treat the contract as repudiated." The word is not expressly defined , in the Act, but inferentially this deiinition i§ contained in Sub- Sect. (1) (b) of this section, and in the definition of warranty [Sect. 62 (1)]. See Com., Sect. 10 ante, p. 44. (b) " JVarranty " as regards England and Ireland is more fully defined in Sect. 62 (1). (c)" " Construction of the contract." Com. infra, p. 52. (d) Severable contract. See Sect. 31 (2). («) Acceptance is here used in the sense of Sect. 35, not of Sect. 4. (/) " Express or implied." See Sect. 55. {g) "Material part." "As regards Scotland a breach of warranty shall be deemed to be a failure to perform a material part of the contract." Sect. 62 (1). This is not, strictly speaking, a definition of "warranty" in Scotland, but the effect of a breach is precisely the same as that of a condition, and warranty may therefore be taken to mean condition. In England " warranty " has a diiFerent meaning. See Sub-Sect. (1) (6) supra, and Sect. 62 (1). Qi) " lieasonable time." See Sect. 35. " What is a reasonable time is a question of fact " [Sect. 56]. See CoM. infra, p. 53. {i) "Reject." The buyer's right of rejection in Scotland is reserved by Sect. 53 (5). (J) " Compensation or damages." As in the case of an English "warranty." The buyer's remedies both in England and Scotland are specified in Sects. 51 and 53. In Scotland where the buyer is entitled to reject and exercises his right, the seller is in the position of having failed to deliver the contract goods, and the buyer's remedy is therefore under Sect. 51. (k) "Impossibility." CoM., Sect. 10 ante, p. 45. (Z) " Or otherwise." This may refer to illegality. 52 SALE OF GOODS ACT 1893. Seet. 11. COMMENTAHY. The adjustment of this section in Parliament gave rise to considerable difficulty, especially in the adaptation of its provisions to Scotland. Formerly the buyer in England had greater latitude in regard to claims of damages than the buyer in Scotland ; but, on the other hand,- his right to rescind the contract was more limited. This arose from the English division of the stipulations of a contract into " conditions " and " warranties " ^ a breach of the former of which justified rejection and rescission, while a breach of the latter merely gave rise to a claim for damages. In the case of a " warranty " in England the buyer cannot rescind the contract, but in Scotland every warranty is a " condition," a breach of which gives a right of rescission.^ Construction As stated in the section it depends (in England and e con rac . jj-g^g^fj^ upon the " construction of the contract " whether a stipulation is a " condition " or a " warranty," but, judged by a Scottish standard, the canons of construction founded on judicial interpretation are uncertain and arbitrary. While, therefore, it was desired to adopt in Scotland the actio quanti minoris, forming the remedy under an English " warranty," it was not deemed expedient to incorporate with it the English rules relating to warranties themselves. It will be observed that sub-section (2) gives the buyer in Scotland a right to keep the goods and claim damages without restricting the right which he previously possessed of rejecting the goods and rescinding the contract.^ The buyer in Scotland has thus an alternative remedy, and is not only in a more advantageous position than formerly, but has a privilege not known in England. The law of Scotland before the passing of this Act did not absolutely reject the actio quanti minoris, but confined ^ See definition of "warranty" Sect. 62 (1). See also Com., Sect. 10 ante, p. 46. (^ The buyer's remedies in Scotland before this Act are explained by Lord President Inglis in M'Cormick and Go. v. Rittmeyer and Co. (1869), 7 Macp. 854 at p. 858. * As to the actio redhibitoria, see Moyle's Sale m the Civil Law, pp. 194, ■ 201 ; Mackintosh on RoTnan Law of Sale, p. 157 ; M. P. I5rown on Sale, p. 285. FORMATION OF THE CONTRACT. 53 its application to the case of " a latent infirmity either in Sect. 11. the title or the quality of the subjects sold discovered when matters were no longer entire." ^ It was a pre-requisite to the buyer's claim for relief that, immediately on the dis- covery of the defect, the contract should be rescinded and both parties placed in the position they occupied before it was entered into, but if restoration of the article sold was impossible in consequence of the defect not being discover- able until after consumption or use by the buyer, the seller was not obliged to return the price if it had been paid, and on the other hand the buyer was free to prove his damage.^ The remedy of rescission, thus qualified, is not impaired by the Act, but if a buyer rescinds instead of taking advantage of the actio quanti minoris in the form now enacted for Scotland, he must conform to the old condition of rejection and timeous intimation to the seller. The section expressly provides that the remedy of Notice of re- rejection of the goods and rescission of the contract must be g"*'"""^, exercised within a " reasonable time." ^ In every case the time. buyer must reject without imdue delay, but in Scotland such rejection is not necessarily connected with the act of delivery. In England delivery and acceptance are con- / current conditions,* and goods once accepted cannot be / afterwards rejected, but in Scotland the question may turn upon timeous rejection after delivery.^ If the breach of contract is patent the buyer must intimate the rejection immediately,^ but if it is latent, as often happens, especially ^ Per Lord M'Laren in LouttU's Trustees v. Sighland Railway Co. (1892), 19 Ret. 791 at p. 800. 2 gell's Com. i. 463-465. ' " What is a reasonable time is a question of fact." Sect. 56. ^ Benjamin, p. 710. But mere receipt is not necessarily acceptance. Com., Sect. 35 post, p.. 169. ^ The distinction between the English and the Scottish rule is pointed out by Lord Chelmsford in Couston, Thomson, and Co. v. Chapman (1872), 10 Macp. H.L. 74 at p. 80. The sale in question was by sample, but the principle is applicable to any executory sale. See Com., Sect. 35 post, p. 171. The buyer is not obliged to return rejected goods [Sect. 36], but failing return of the goods he must give the seller timeous intimation of rejection [Sect. 35]. ^ " I hold it of the greatest consequence in cases such as the present to enforce strictly the rule of law as to the obligation of a purchaser to examine his goods without delay." — Per Lord Justice-Clerk Hope in Smart v. Begg (1852), 14 D. 912 at p. 915. "According to all the authorities it is for the purchaser of goods to satisfy himself whether the contract has been fulfilled, and, if not, to return them to the seller iiistcmily." — Per Lord President 54 SALE OF GOODS ACT 1893. Sect. 11. Notice of in- tention to claim damages. I in the case of seeds bought for the purpose of being sown, I it is sufficient if the rejection is intimated immediately on the defect being discovered.^ Under the buyer's new alternative right it is open to him to retain the goods and treat the breach as giving rise to a claim for damages "in diminution or extinction of the price." ^ There is no express time limitation of this right. It is not provided that notice of the intention to claim damages must be given within a specified time, or within a " reasonable time," or, indeed, that any notice whatever is required. In England no notice is necessary where the breach is that of a warranty, but the want of notice raises a strong presumption that the complaint is not well founded.^ A similar presumption will probably be applied in Scotland. Inglis, in Cart&r and Co. v. Campbell (1885), 12 Ret. 1075 at p. 1079. JLven where the word instantly is used it implies that the goods have been fully delivered to the buyer, for it is a return of the goods, or an offer to return them, which the law requires, not a conditional delivery of them as in England. Such words as "immediately," "instantly," "without delay," etc., express no more than the "reasonable time" allowed by the section. Even where the defect is not latent the buyer must have a fair opportunity for examina- tion, but the precise time will vary according to the circumstances. In the following cases the intimation of rejection was held timeous : — M'Bey v. Gardiner (1858), 20 D. 1151 (three days) ; M'Carter-v. Stewart and Mackenzie (1877), 4 Ret. 890 (five days) ; IVallajx v. RoUnson (1885), 22 S.L.R. 830 (seven days) ; Lamb v. M'Kenzie and Sons (1891), 8 Sh. Ct. R^p. 28 (three days). On the other hand, in Stevenson v. Dalrymple (1808), Mor. App. Sale 5, intimation of rejection three weeks after receipt of the goods was held in- sufficient. See also Strange r. Jardine (1894), 11 Sh. Ct. Rep. 49. As to the conditions attached to the buyer's right of rejection, see also Sect. 36 and Com. post, p. 171. 1 Adamson v. Smith (1799), Mor. 14244 ; Dickson and Co. v. Kincaid j[15th December 1808), F.C. ; Rill v. Pringle (1827), 6 Sh. 229 ; M'Caw, ptevenson, and Orr, Ltd. v. Maclaren and Sons (1893), 20 Ret. 437. In the [case of seeds the buyer's remedy has been denied on the following grounds : (1) , teon-timeous intimation of rejection — Murdoch v. Richardson (1776), 5 Br. (Sup. 583 ; Baird v. AUken (1788), Mor. 14243 ; CaHer and Co. v. Campbell (1885), 12 Ret. 1075 ; Wilsm v. Carmichael and Sons (1894), 21 Ret. 732. (2) The alleged defect not proved— Alston v. Orr (1668), Mor. 14231 ; Stewart V. Jamieson (1863), 1 Macp. 525. (3) Implied warranty excluded by the Mercantile Law Amendment Act 1856—ffardie v. Austin and M' Asian (1870), 8 Macp. 798 ; Bardie v. Smith and Simons (1870), 42 Sc. Jur. 464. (4) implied warranty excluded by the terms of the contract— e. a. Smith and Sons V. Waite, Nash, aTid Co. (18§8), 15 Ret. 533. 2 Sect. 63. The price, or the price with interest, may form the measure of the buyer's damage. If payment has been made, the buyer may claim repayment ; if not paid, the buyer's obligation to pay is extinguished— Brown v. Laurie (1791), Mor. 14244 ; Adamson v. Smith (1799), Mor. 14244 ; "' ■ ■ 1 V. Blackwood (1833), 11 Sh. 722. 'No length of time elapsed after the sale will alter the nature of a FORMATION OF THE CONTRACT. 55 Although the buyer who rejects goods is not entitled to Seetjill. retain them in respect of damages or expenses, he may do ^u*™*f™r^'' so (after due notice) in security of repayment of the price.-^ payment of On the other hand, as a check upon frivolous complaints P™®' and claims on the part of the buyer. Sect. 59 provides that the Court in Scotland may order the buyer to consign the price or give reasonable security for its due payment. Where the seller's conduct was tainted with fraud it Seller's fraud, was assumed, if not decided, under the former law of Scotland, that the buyer might exercise the option now extended to the general case. He was not obliged to rescind the contract and reject the goods, but might if he pleased retain and claim damages.^ Although this alter- native is now open to the buyer without allegation of contract originally false. Neither is notice necessary to be given, though the not giving notice will be a strong presumption against the buyer . . . and will make the proof on his part much more difficult. " — Per Lord Loughborough in Fidder v. Starkin (1788), 1 H. Bl. 17, at p. 19. See also Fisher v. Samuda (1807), 1 Camp. 190 ; Pmlton v. Laitimore (1829), 9 B. & 0. 259 ; Pateshall v. Tranter (1835), 3 A. & E. 103 ; Benjamin on Sale, p. 945. 1 Padgett and Go. v. M'Nair and Brand (1862), 15 D. 76 ; Melville v. Crichley and Co. (1856), 18 D. 643 ; Laing v. Western (1858), 20 D. 519. 2 Stair, i. 9. 14 ; Bell's Com. i. 467, no.te ; Menzies v. Macharg (1760), Mor. 14165 ; Gi-ay v. Hamilton (1801), Mor. Sale, App. No. 2 ; Amaan v. Bandy- side and Henderson (1865), 3 Macp. 526 ; Dobhie v. Duncanson (1872), 10 Macp. 810. Non-disclosure by the seller of serious defect in the article sold was treated as fraud in Bidhie v. Carnegie (21st January 1815), F.C. ; Rough V. Moir and Son (1875), 2 Ret. 529. " At common law the liability of a seller who knows of defects in what he sells is a liability not upon warranty but upon fraud." — Per Lord Neaves in Stewart v. Jamieson (1863), 1 Macp. 525 at p. 531. This, however, does not solve the question whether, previous to the present Act, an action for damages could have been founded on the seller's fraud where the buyer kept the goods and did not repudiate the contract. It was, however, so assumed in recent cases in the House of Lords. Thus in Houldsworth v. City of Glasgow Sank (1880), 7 Ret. H.L. 53, Lord Cairns, L. C, said: "There is no doubt that, according to the law of England, a person purchasing a chattel or goods concerning which the vendor makes a fraudulent misrepresentation may, on finding out the fraud, retain the chattel ' or the goods, and have his action to recover any damages he has sustained by reason of the fraud. I will assume that the law of Scotland in the case of a chattel or of goods is the same as that of England" (7 Ret. H.L. at p. 55). Again, in Prownlie v. Miller (1880), 7 Bet. H.L. 66, Lord Blackburn assumed for the purpose of argument that the buyer had this privilege as against the fraudulent seller, but stated that he believed the point was not quite settled (7 Ret. H.L. at p. 79), and Lord Watson thought the point was surrounded with considerable difficulty in view of the decisions (7 Ret. H.L. at pp. 83, 84). The weight of authority in Scotland was, however, in favour of the admission of the actio quanti minoris as in place of a rescissory action. See argument of Lord Kinloch in Amaan v. Handyside and Henderson, 3 Macp. at pp. 526, 527. See also Com., Sect. It post, p. 71 ; and Com., Sect. 6\post, p. 271. 56 SALE OF GOODS ACT 1893. Sect. 11. Questions between English and Scottish con- tracting parties. Cases illus- trative of buyer's remedy. fraud, the existence of fraud must necessarily widen and strengthen the remedy, and may he important in questions regarding "reasonable time," and the presumption arising from the buyer's delay in giving notice. The buyer's remedy in Scotland has now gone beyond, instead of falling short of, the corresponding remedy in England. The laws of the two countries in this matter are not assimilated, and therefore questions of difficulty may still arise between English seller and Scottish buyer, or vice versd. If either country is clearly the locus contractus, the law of that country will probably prevail, but it is often difficult to determine whether a correspondence between England and Scotland results in an English or a Scottish contract.'^ Additional cases illustrative of the buyer's remedies in Scotland before this Act will be found in the footnote.^ ^ See Hope v. Crookston, Brors. (1890), 17 Ret. 868 ; Hwmlyn and Co. v. Talisker DistilUry (1893,) 21 Eet. 204, Revd. H.L. (1894), 21 Ret. H.L. 21 ; StarUe v. Paterson (1893), 10 Sh. Ot. Repts. 27. 2 Aiton V. Fairie (1668), Mor. 14230 ; Faton v. LockJiart (1675), Mor. 14232 ; Seaton v. Carmichael (1680), Mor. 14234 ; Wallwood v. Chay (1681), Mor. 14235 ; Brisbane v. Merchants in Glasgow (1684), Mor. 12328 & 14235 ; IVatson V. Stewart (1694), 1 Fount. 589 ; Mitchell v. Bisset (1694), Mor. 14236 ; Balston v. Eobertson (1761), Mor. 14238 ; Lindsay v. Wilson (1771), 5 Br. Sup. 585 ; Gordon v. Scott (1773), 5 Br. Sup. 585 ; Lombe y. Scott (1779), Mor. 5627 ; Brown v. Gilbert (1791), Mor. 14244 ; Gramt v. Dumbreck (1792), Hume 673; Vickers and Co. v. Sheriff and Dudgeon (1803), Hume 332; Netmumm, Hunt, and Co. v. Harris (1803), Hume 335 ; Stevenson v. Dal- rymple (1808), Mor. Sale, App. No. 5 ; Sheriff v. Marshall (1812), Hume 697 ; Wilson v. Marshall, (1812), Hume 697 ; Bermoch v. M'Kail (27th January 1820), F.C.; Bruce v. M'Kemie (1821), 1 Sh. 77 (N.E. 79) ; Pitcaim V. Brown (1823), 2 Sh. 576 (N.E. 495) ; Jaffray v. Boag (1824), 3 Sh. 375 (N.E.i266) ; Gossar and Co. v. Marjoribanks (1826), 4 Sh. 685 (N.E. 629) ; Sharrat v. Tumbull (1827), 5 Sh. 361 ; Watt v. Glen (1829), 7 Sh. 372 ; Robertson v. Harford Brors. and Co. (1832), H.L. 6 W.S. 1 ; Fra^er and Co. V. Outram and Co. (1834), 13 Sh. 84 ; Potter v. Greig (1836), 14 Sh. 210 ; Pollock V. Macadam (1840), 2 D. 1026 ; JVapier v. Campbell (1841), 3 D. 879 ; Bavsan T. Mitchell (1845), 7 D. 813 ; Mamsay v. M'Lellam and Son (1845), 8 D. 142 ; Smart v. Begg (1852), 14 D. 912 ; Padgett and Co. v. M'Nair and Brand (1852), 15 D. 76 ; M'Bey\. Gardiner (1858), 20 D. 1151 ; Todd and Higginbotham v. O'Regcm (1859), 21 D. 1320 ; Fdinr. and Leith Brewing Co. v. Eeid (1861), 24 D. 26 ; Morson and Co. v. Bums (1866), 5 Macp. 99 ; Couston, Thomson, and Co. v. Chapman (1872), 10 Macp. H.L. 74 ; Smith Brors. aiid Co. v. Scott (1875), 2 Ret. 601 ; Croan v. Vallance (1881), 8 Ret. 700 ; Fleming and Co., Ltd. v. Airdrie Iron Co. (1882), 9 Eet. 473 ; Col. By. Co. Y. Rankin (1882), 10 Ret. 63. See also Morison v. Glen and For- rester (1712), Mor. 14236 ; Melville v. Crichley and Co. (1856), 18 D. 643 ; Mackay v. Dick and Stevenson (1881), 8 Ret. H.L. 37 ; Bradley amd Go. v. G. & W. Dollar (1886), 13 Ret. 893. In a few cases the actio quanti minoris seems to have been admitted in opposition to the FORMATION OF THE CONTRACT. 57 ETO. 12. In a contract of sale, unless the circumstances Sect. 12. of the contract are such as to show a different inten- ^"™^° „„„ UNDERTAKING tion/"^ there is — :^f J^" ^i-^' (1.) An implied condition ^''^ on the part of the seller that in the case of a sale ^"^ he has a right to sell the goods, and that in the case of an agreement to sell ^"^ he will have a right to sell the goods at the time when the property is to pass : ^''^ (2.) An implied warranty ^''^ that the buyer shall have and enjoy quiet possession ^'^ of the goods : (3.) An implied warranty ^''^ that the goods shall be free^-'^ from any charge or encumbrance ^^^ in favour of any third party, not declared or known to the buyer before or at the time when the contract is made. Notes. (a) Giroumsta/mes showing a different intention. A sale by auction of forfeited pledges was held to imply a sale of such right only as the seller himself possessed.^ Different intention may be inferred from the terms of the contract^ or from the nature of the subject sold, e.g. a patent right.^ general principles of Scottisli law, e.g. Hoggersworth v. Hamilton (1665), Moh 14230 ; Fairie v. Iriglis (1669), Mor. 14231 ; Baird v. Charteris (1686), Mor. 14235. In other eases the remedy has been allowed as forming an indirect term of the contract, e.g. M'Oormick v. Eittmeyer (1869), 7 Maop. 854 ; Hope v. Crookstcm Brors. (1890), 17 Ret. 868 ; or as arising out of circumstances otherwise inextricable, e.g. Bailey and Oo. v. Paterson (1828), 4 Mur. 478 at p. 480 ; Pearce Brors. v. IroTis (1869), 7 Maop. 571 ; M'Carter V. Stewart arid Mackenzie (1877), 4 Eet. 890 ; Spencer and Co. v. Dobie and Co. (1879), 7 Ret. 396. See a\so Meid v. Steele (1824), 3 Sh. 201. The alternative remedy now allowed to the buyer is confined to the sale of goods. The law as to heritage is unaltered. 1 Morley v. Attenborough (1849), 3 Exoh. 500. The same rule seems to apply to any sale by a person acting in a special or limited capacity, such as a sale under a judicial warrant. 2 Leith Heritages Co. v. Edinr. and Leith Glass Co. (1876), 3 Ret. 789. 3 Hall V. Conder (1857), 2 C.B. N.S. 22 ; Smith v. Neale (1857), 2 CP. N.S. 67. 58 SALE OF GOODS ACT 1893. Sect. 12. (&) " Condition "— " warranty." See Com., Sect. 10 ante, p. 44 ; also Sect. 11, Note {a) ante, p. 51, and Com. infra, p. 60. (c) "&Ze" — "agreement to sell." Defined Sect. 1. See also Sect. 62 (1). (d) Passing of the property. See Sect. 1 7. (e) " Quiet possession" — "encumbrance." Words now for the first time applied to the sale of goods. Adopted from the English law of real estate. (/) "Shall be free." The words are not "are free." The seller, therefore, does not warrant that the goods are free at the date of the contract, but that he is, or will be, in a position to discharge the encumbrance. Development of law of im- plied title in England. COMMENTAEY. The rule of this section has been the subject of much controversy in England. The result of the older authorities was thus stated by Baron Parke in 1849. Where, in the sale of a specific chattel, there is no fraud or concealment on the part of the seller, and where nothing is said about title, " there is no warranty of title any more than there is of quality. The rule of caveat emptor applies to both." ^ Two years later Lord Campbell' thus referred to Baron Parke's judgment. The exceptions stated in it, he said, " well-nigh eat up the rule. Executory contracts are said to be excepted; so are sales in retail shops, or where there is a usage of trade ; so that there may be difficulty in finding cases to which the rule would practically apply." ^ The decision in Mchholz V. Bannister^ (1864) cast further doubt upon the rule itself, and led to a new rule formulated by Benjamin, and confirmed in Baphael v. Burt* (1864), as follows : " A sale of personal chattels implies an affirmation by the vendor that the chattel is his, and therefore he warrants the title, unless it be shown by the facts and circumstances of the sale that the vendor did not intend to assert ownership, but only to transfer such interest as he might have in the ^ In Morley v. Atteiiborough, 3 Ex. 500 at p. 510. ^ In Sims t. Marryat (1851), 17 Q.B. 281 at p. 291. ^ 17 C.B. N.S. 708. A full review of the previous authorities will be found in the report of this case, pp. 709 to 720. See also Broom's Legal Maxi/ms, 4th ed. p. 768. * Cabab6 and Ellis, p. 325. FORMATION OF THE CONTRACT. 59 chattel sold."i This is the rule embodied in the first sub- Sect. 12. section, but to avoid ambiguity the word " condition " is used instead of warranty. During the development which led to the change of rule Law of ■ in England, the law of Scotland was often quoted, along Scotland. with that of Eome, as affording an example of implied warranty of title.^ The reference to the Civil Law was/ inaccurate, for under that law the only obligations of the seller were delivery, and a warranty against eviction.^ The buyer, even if he could show that the seller was not owner of the thing sold, was not entitled to get rid of his bargain so long as he had undisturbed possession. The language of Stair implies that the law of Scotland was the same,* but it was early settled in Scotland that, at least in the case of heritage, the seller was bound to give a good title to the subject sold.^ Bell in certain passages, frequently cited in England, extended the rule to moveables,^ but M. P. Brown, after a careful review of the authorities, doubted if warranty of title in Scotland extended beyond sales of heritage.'^ The judgment in Swan \. Martin^ (1865) supports the view Swan v. that in Scotland before this Act the warranty in a sale of goods was only against eviction. The sale was of goodwill ■• Benjamin, p. 634. ^ Kg. by Baron Parke in Morley v. Atteriborough (1849), 3 Ex. 500 at p. 510. 3 Dig. 18. 1. 25. 1 ; ibid. 19. 4. 1 ; Cod. 8. 44. 3 ; Moyle, p. 103 et seq. ; Macintosh, p. 150 et seq. ; Benjamin, p. 377 et seg. * Referring to the law of Rome (and iuferentially to that of Scotland), Stair says: — "In sale, delivery of the goods or things bought, with the obligation of warrandice in case of eviction (which is implied in sale though not expressed) is the implement of it on the seller's part, and even though the buyer know and make it appear that it were not the seller's, yet he could demand no more but delivery and warrandice." — Stair, i. 14. 1. ^ Nairn v. Scrymger (1676), Mor. 14169 ; E. Morton v. Cunningham (1738), Mor. 14175 ; Lockhart v. Johnston (1742), Mor. 14176 ; Little v. Dickson (1749), Mor. 14177. ^ Bell on Sale, pp. 79, 94, 95. But Bell is inconsistent, or at least ambiguous, for, while stating the rule, he qualifies it in a manner destructive to its existence. "The seller," he says, "by the act of selling gives an implied assurance to the buyer that he holds such powers as efi'ectuallj' to make the transfer to him. This assurance resolves into u, right on the part of the buyer and corresponding obligation on that of the seller that the buyer shall be safe against eviction or disappointment from other parties." — Bell op Sale, p. 95. In his Principles (Sect. 114) Bell states the rule without qualification. ' M. P. Brown on Sale, pp. 231, 239. ^ 3 Macp. 851. Martin. 6o SALE OF GOODS ACT 1893. Sect. 12. Exceptional instance of "warranty '' in Scotland. and fittings per inventory, and the Sheriff and Sheriff- Substitute (whose judgments were reversed) held that the pursuer had proved a title in another person, inconsistent with that of the seller. It was further urged that the property had never passed to the buyer, his possession being attributable to his occupation of the premises as lessee. The decision, however, is not necessarily incon- sistent with the provisions of this section, taken in connec- tion with the then existing law of Scotland as to rejection and repudiation. The buyer had been in possession for nearly three years before raising action, and the remedy asked was not rescission of the entire contract, but repay- ment of the price of certain items of the inventory, alleged by the buyer to have been claimed by the landlord. In holding that the action was not relevant without a state- ment of eviction or distress, the Court may have had in view that repudiation of the contract was not asked, and was perhaps impossible, and that therefore the remedy was limited to a warranty in the English sense of the term.. It will be noticed that the first sub-section provides an implied condition and the remaining two sub-sections an implied warranty. The distinction illustrates an excep- tional case in which, in the matter of warrandice, the law of England and the former law of Scotland run on parallel lines. " Warranty,'' as elsewhere observed,^ is generally in Scotland equivalent to " condition," but an exception exists where restitutio in integrum is impossible, e.g. where delivery has been given and the subject of sale has been used by the buyer. In such a case the contract cannot be rescinded, and the buyer's only remedy is one of damages. It is true that the measure of damages may in some cases be repay- ment of the full price, as where seed has been sown result- ing in a total failure of crop,^ but the result is the same ^ Com., Sect. 10 ante, p. 46. ^ Adamson v. Smith (1799), Mor. 14244 ; Wright v. Blackwood (1833), 11 Sh. 722. The damages are assessed on the principle of indemnification, and may therefore include interest and expenses necessarily incurred by the buyer. Adamson v. Smith, and Wright v. Blackwood {supra) ; Bell v. Queensberry's Execidors (1824), 3 Sh. 416. But see Inglis v. Anstruther (1771), Mor. 16633 ; Stephen v. Lord Advocate (1878), 6 Eet. 282. FORMATION OF THE CONTRACT. 6i whether the breach be viewed as relating to the contract Sect. 12. itself according to the law of Scotland, or as arising out of a collateral contract of warranty according to the law of England. The first sub-section takes effect when the pro- perty passes and refers to the immediate effects of the con- tract; the second sub-section assumes that the buyer has had possession, but is afterwards disturbed by a title superior to that of the seller.^ A warranty that the buyer shall have and enjoy quiet Limitation of possession, clearly cannot imply an absolute warranty yt^^™*''"^ against unauthorised disturbance by third parties. " When a man covenants to indemnify against all persons, this is but a covenant to indemnify against lawful title. And the reason is, because, as it regards such acts as may arise from rightful claim, a man may well be supposed to covenant against all the world, but it would be an extravagant exten- sion of such a covenant if it were good against all the acts which the folly or malice of strangers might suggest, and ■therefore the law has properly restrained it within its reasonable import ; that is to rightful title." ^ Under the third sub-section the " implied warranty " is, charge or in Scotland, equivalent to a " condition," a breach of which gives the buyer the option of repudiating the contract or claiming damages.^ If, however, the charge or incumbrance is not discovered until after possession and use of the thing ^ The warranty in the second sub-section is analogous to warrandice in a conve3'ance of heritage. In reference to the latter Lord M'Laren remarks in a recent case that the remedy of restitution of the subjects sold and repay- ment of the price is singularly inappropriate. "Suppose," he says, "that thirty-nine years after the sale of an estate, a cottage or an acre of moorland, which had been included in a description of subjects, was found to belong to another proprietor. Is it consistent with legal principle or with justice, that the. heirs of the seller should be required to repay the price, or should be obliged to take back the estate diminished by the evicted acre ? ... It is evident from the nature of the obligation of warrandice that it must in the general case, and probably in all cases, resolve into a claim of pecuniary indemnification for the loss of the subject of sale or its diminution in value." — Welsh V. Rmaell (1894), 21 Ret. 769 at p. 773. 2 Per Lord EUenborough in Nash v. Pal-rmr (1816), 5 M. & S. 379 at p. 380. =* See Sect. 11 (2), and definition of " warranty " in Scotland, Sect. 62 (1). But the transference of a Bill of Lading takes with it the liabilities as well as the rights of a consignor— 18 & 19 Vict. c. Ill, Sect. 1, preserved by Sect. 61 (3) of this Act. incumbrance. 62 SALE OF GOODS ACT 1893. Sect. 12. sold, the buyer's remedy will be limited to damages as in tbe case of the second sub-section. Sect. 13. 13. Where there is a contract for the sale of goods DBsoEiPTioN. by description/"^ there is an implied condition^'' that the goods shall correspond with the description ; and if the sale be by sample/"^ as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. Notes. (a) "Description.'' The word has two different meanings in the Act. It may be used in a generic sense to denote the intrinsic nature or quality of the article sold, as where the goods are said to be " of a description " {i.e. kind) " which it is in the course of the seller's business to supply"^ [Sect. 14 (1)] ; or it may refer, as in this section, to a term of the contract expressing, in written or spoken language, the particular nature or quality which it is intended that the article should possess.^ In the former case the word is applied to attributes generally ; in the latter, the meaning is restricted to the form of words by which certain particular attributes are expressed in the contract. It would seem from the judgment in Randall v. Newson^ (1877), that where a " description " is embodied in words in a contract, certain other words may be added by implication, so that in addition to an express description there may also be an implied description. If this be so, it involves serious confusion between this and the immediately succeeding section relating to implied warranties and conditions. The subject is discussed Com. infra, p. 64. (i) " Condition." Not a mere " warranty " in the English sense. (c) " Sale hy sample." See Sect. 1 5. ' The same meaning is intended in Sect. 30 (3) where the words are, " milted with goods of a different description." " Section 14 (2) contains the word in both its applications. 3 2 Q.B.D. 102. FORMATION OF THE CONTRACT. 63 COMMENTAEY. Sect. 13. Although there is no implied warranty of quality or Description as fitness except as in Sect. 14, the seUer is bound to furnish eonto'Lt.' ^''^ goods of the description^ specified in the contract. Thus delivery of an adulterated article in name of " Tchaboe guano," ^ or " flax yarn," ^ or " oxalic acid," * or " cluster oats," ^ will not free the seller from his obligation. The thing delivered must meet the description in the ordinary sense of the term.^ " If," said Lord Blackburn (adopting an illustration of Lord Abinger), " you contract to sell peas, you cannot oblige a party to take beans. If the description of the article tendered is different in any respect, it is not the article bargained for, and the other party is not bound to take it." "^ A description may, however, be held to be substantially complied with, although from special circum- stances the goods furnished do not correspond with its precise terms,^ while on the other hand a merely literal interpretation of a description may not convey its mercantile meaning to which the law will give effect.' The rule is Description almost necessarily confined to executory contracts, for, where executory" g oods a re ^ijlgntified and agreed upon at the time the con- contracts. tract is made," ^^ they cannot, in the ordinary case, be said to be sold by description. The section provides that where ' Description is here used in the sense of a term of the contract. See note (a) supra. A single word may stand as the descriptive name of an article consisting of many separate but necessary parts, e.g. a ship, which includes all necessary sailing gear. See Armstrong and, Co. v. M'Gfregor and Co. (1875), 2 Ret. 339. 2 Paterson v. Dickson (1850), 12 D. 502. 3 Jaff^ V. Ritchie (1860), 23 D. 242. ^ Josling v. Kingsford (1863), 13 C.B. N.S. 447. 5 Carter and Co. v. Campbell (1885), 12 Ret. 1075. * If the name of the article indicates its purpose, it must be fit for that purpose— Fowl Oppen v. ArhwMe (1855), 18 D. 113 (" pint cork "). !■ Bowes V. Shand (1877), 2 App. Ca. 455 at p. 480. See also Tye v. Fyn- more (1813), 3 Camp. 462 ("pimento"); Gardiner^. Gray (1815), 4 Camp. 144 ("waste silk"); Allan v. Lake (1852), 18 Q.B. 560 ("Skirving's Swedes") ; Nidiol v. GodU (1854), 10 Ex. 191 ("foreign refined rape oil") ; Wieler v. Schilizzi (1856), 17 C.B. 619 ("Calcutta linseed"); Azimar v. Casella (1866), L.R. 2 C.P. 677 ("Salem cotton") ; Borrowmany. Drayton (1876), 2 Ex. Div. 15 ("cargo" of goods). 8 Hopkinsy. Hitchcock (1863), 14 C.B. N.S. 65. » Powell V. HoHon (1836), 2 Bing. N.C. 668. ^i" See definition of "specific goods," Sect. 62 (1). 64 SALE OF GOODS ACT 1893. Sect. 13. Is undertaking as to quality or fitness an implied description ? the sale is by sample as well as by description the bulk must correspond with both. Such a combination does not alter the character of the sale, which, except in some rare cases, will be executory. Though sample is often given in sales of specific goods a description rarely forms a term of the contract except where the goods are furnished upon the buyer's order.^ The exceptions in Sect. 14 to the rule of •' Caveat emptor" are sometimes based upon the theory of descrip- tion. Thus in delivering the judgment of the Court of Appeal in Randall v. Newson^ (1877) Brett, J., sums up a review of the authorities as follows : — " In some contracts the undertaking of the seller is said to be only that the article shall be merchantable ; in others that it shall be reasonably fit for the purpose to which it is to be applied. In all cases it seems to us it is either assumed or expressly stated that the fundamental undertaking is that the article offered or delivered shall answer the description of it con- tained in the contract. That rule comprises all the others." * In a case regarding " waste silk " Lord Ellenborough said : " The purchaser has a right to expect a saleable article answer- ing the description m the contract." * Commenting on this ■^ The distinction is clearly pointed out in Couston, Thomson, and Co. v. Chapmcm (1872), 10 Macp. H.L. 74, where in comparing the circumstances with those of jaff4 v. Ritchie (1860) 23 D. 242, cited in argument. Lord Chancellor Hatherly says: "The case cited was a case in which a person engaged to supply certain quantities of yarn according to sample. He might supply the yarn from whenoesoever he pleased (there might not be a single hank of it m esse at the time beyond the sample of it), and he furnished some jute instead of flax. There, the very contract was for flax, not for jute, a thine different m rerum natura. Bj]JjiaiB,..the_fiQHtuct..vvasimuceiiaiU-SMCifiw wines lying in pertajn specified, cellars " (10 Macp. H.L. at p. 80)7866 also Lord" Colonsay To the same effect (at p. 84). The following cases illustrate executory sales by sample as well as by description : — Van Oppen v. ArlmcJcle (1855), 18 D. 113 ; Kerr mid Sons v. M'Dowall (1828), 6 Sh. 1029 ; Nichol\. Godts (1854), 10 Ex. 191 ; Azdmar v. Oasella (1867), L.R. 2 C.P. 677 ; Mody V. Gregson (1868), L.R. 4 Ex. 49; Macfarlane and Co. v. Taylor and Co. (1868), 6 Macp. H.L. 1 (see specially p. 13). 2 2 Q.B.D. 102. ^ 2 Q.B.D. at p. 109. The authorities specially referred to by Brett, J., are— Gardiner v. Gray (1815), 4 Camp. 144 ; Laing v. Widgeon (1815), 4 Camp. 169 ; Gray v. Cox (1825), 4 B. & C. 108 ; Jones v. Bright (1829), 5 Bing. 533 ; Brovm v. Edgington (1841), 2 M. & G., 279 ; Nichol\. Godts (1854), 10 Ex. 191 ; Wieler v. Schiliszi (1856), 17 C.B. 619 ; JosUng v. Kmgsford (1863), 13 C.B. lSr.S.447 ; amlJonesv. Jmi{1868), L.E. 3 Q.B. 197. * In Gardiner v. Gray (1815), 4 Camp. 144 at p. 145. FORMATION OF THE CONTRACT. 65 dictum Brett, J., says : " The decision is that the commodity Seet. 13. offered and delivered must answer the description of it, and be ' saleable waste silk' " ^ But if the expressed description " waste silk " becomes, by the addition of an implied term, " saleable waste sUk," and " carriage-pole " becomes " reasoTidbly-fit-and- 2?rq29e?--carriage-pole," ^ it is equally competent to imply any adjective or number of adjectives expressive of quality or fitness. In this view, the present section and the one immediately following deal with the . same subject, but the one provides without limitation that the goods must corre- spond with the description,^ while the other provides that there is no implied warranty or condition as to quality or fitness, except in the special cases mentioned.* This com- • bination of description and implied condition of quality or fitness, raises a question of importance, and may lead to consequences not foreseen by the legislature. Thus it has Sale by a been suggested by commentators entitled to respect, that the ™^°"f^<='"" rule laid down in Johnson v. Eaylton^ (1881), that where a Johnsons. manufacturer sells goods he warrants them of his own ^^y^*°'^- manufacture, forms an instance of implied description, and continues to be the law of England under this section.® In the original bill the rule was treated as an implied condi- tion, and was embodied in Sect. 14'' in the following terms : — " Where there is a contract for the sale of goods by a manufacturer as such, there is, in the absence of any trade usage to the contrary, an implied undertaking that the goods are of the seller's own manufacture." This pro- vision was deleted in Select Committee of the Lords, the understanding being that by this means the law of England was assimilated to that of Scotland, where by two decisions * of earlier date a rule contrary to that of Johnson v. Eaylton had been established. If, however, the rule of Johnson V. Baylton is preserved by the present section, the mere 1 In Randall v. Newsm (1877), 2 Q.B.D. at p. 106. 2 Banctall v. Newaon (1877), 2 Q.B.D. 102. 3 Sect. 13. * Sect. 14. = 7 Q.B.D. 438. ' Ker and Pearson-Gee on Sale of Goods Act, p. 87. !■ Clause 17 of the bill. ' ?res< St ocktp^ Iron Oo.^ v. J/g}l3onand_Maxwell (1880), ,7 , Eet..,10.55 ; Johnson anSTSeay^. Nicoll amd •Sorr^6Si)^'8 ReCiZf. 66 SALE OF GOODS ACT 1893. Seet. 13. reservation of the common law in Sect. 61 (2) may not be sufficient to prevent assimilation of the Scottish rule to that of England. This result was certainly not contemplated, and it is submitted that by the Act, not only is the Scottish rule preserved, but the English rule has ceased to exist. The effect of the reasoning of Brett, J., in Randall v. Newson, is to push a theory beyond reasonable limits, and no better illustration of its unsoundness could be found than its effect upon the circumstances of Johnson v. Baylton. It does not, however, seem to have occurred to the Lords-Justices who decided the latter case, that they were in any way dealing with a question of description.^ Sect. 14. Implied con- ditions AS TO QUALITT OK FITNESS. 14. Subject to the provisions of this Act^"^ and of any statute in that behalf/'^ there is no implied war- ranty or condition ^"^ as to the quality ^^ or fitness for any particular purpose of goods supplied under a contract of sale/*^ except as follows : — (1.) Where the buyer, expressly or by implication,^-'^^ makes knov?n to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description ^^^ which it is in the course of the seller's business to supply (whether he be the manufacturer^''^ or not), there is an implied condition 1 There is no suggestion of implied description in the judgment. Various words and phrases are used, such as "agreement," "obligation," "implied stipulation," "suggested implication," " suggested contract." Brett, L. J., who delivered the opinion of the Court in Handall v. Newsm, states the question in Johnson v. Maylton thus — " The question is whether, . . . there being no express stipulation that the goods are to be of the manufacture of the manufacturer, there is an implied stipulation that the goods shall be of the manufacture of the manufacturer who is to supply them" (7 Q.B.D. at p. 452) ; and again, "The question really is whether the suggested contract is to be im- plied from the fact of the order being given, or contract made, with a person holding himself out to be a manufacturer of such goods, and not holding him- self out as otherwise dealing in such goods " (pp. 453, 454). It may further be noted that in Johnson v. Maylton the Court consisted of Cotton, Bramwell, and Brett, LL.-J., and that Bramwell, L. J., strongly dissented. FORMATION OF THE CONTRACT. 67 that the goods shall be reasonably fit^*^ for such Sect. 14. purpose, provided that in the case of a contract for the sale of a specified article under its patent or other trade name/'^ there is no implied condition as to its fitness for any particular purpose : (2.) Where goods are bought by description ^^'^ from a seller who deals in goods of that description^*'^ (whether he be the manufacturer^''^ or not), there is an implied condition that the goods shall be of mer- chantable quality ; provided that if the buyer has examined® the goods, there shall be no implied con- dition as regards defects which such examination ought to have revealed : (3.) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade/™^ (4.) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith/"^ Notes. (a) E.g. Sect. 13 as to sale by description. (&) " Statute in that lehalf." E.g. Chain Cables and Anchors Act 1874,^ Sect. 4 (implied warranty that cable tested and stamped) ; Sale of Food and Drugs Act 1875,^ Sect. 6 (penalty on sale of food or drugs not of nature, substance, or quality demanded); Merchandise Marks Act 1887,^ Sect. 17 (warranty that trade mark or trade description genuine) ; * Fertilisers and Feeding Stuifs Act 1893,^ Sects. 1 & 2 (invoice containing specified particulars to act as a warranty). (c) " Warranty or condition." " Warranty " is defined as to England, Sect. 62 (1). The negative of " warranty " in that 1 37 & 38 Vict. 0. 51. 2 33 & 39 vict. c. 63. ' 50 & 51 Vict. c. 28. * Section quoted in Appendix I. post, p. 296. « 56 & 57 Vict. c. 56. 68 SALE OF GOODS ACT 1893. Seet. 14. definition, and in Sect. 11 (1) {a), is inferentially a definition of " condition." The buyer may waive the condition and treat the seller's breach as a breach of warranty. In Scotland " warranty " and " condition " are synonymous, and entitle the party not in fault to repudiate the contract. Com,, Sect. 10 ante, p. 46. {d) " ' Quality of goods ' includes their state or condition." Sect. 62 (1). («) " Contract of sale." Defined Sect. 1 and Sect. 62 (1). (/) "By implication." This is a new remedy in Scotland, having been previously excluded by the Mercantile Law Amend- ment Act, Scotland, 1856,^ Sect. 5. (g) "Description." See Sect. 13, note (a) ante, p. 62. (h) " Manufadwer." Before the Act a manufacturer in Eng- land who sold goods was held to warrant that they were manu- factured by himself.^ It was otherwise in Scotland,^ and it would seem that the English rule has now been assimilated to that of Scotland.* («) " Reasonably fit." " "When a party undertakes to supply an article for any particular purpose, he warrants that it shall be fit and proper for such purpose. If a purchaser himself selects the article, it has been held that the mere fact that the vendor knew the use for which it was designed, will not raise an implied warranty, because the skill and judgment of the latter are not relied on in making the purchase." ^ (y) "Patent or trade name." Thus the sale of a machine under the name of " patent gas producer of the four cwt. per hour size," was held not to import a warranty that the machine was capable of consuming four cwts of coal per hour.^ A similar provision is contained in the Sale of Food and Drugs" Act 1875 in regard to patent medicines.' Qc) "Description." Compare this sub -section with Sect. 13, and see note (a) ante, p. 62, and Com. ante^ p. 64. The word "description" in this sub -section occurs twice, and seems to illustrate both of the meanings referred to ante, p. 62. In Scotland a small admixture of foreign substance has been held to entitle the buyer to repudiate the contract on the ground that the goods were not conform to description.* 1 19 & 20 Viet. c. 60. ' Johnson v. Baijlton (1881), .7 Q.B.D. 438. ' West Stockton Iron Go. v. Neilson and Maxwell (1880), 7 Ret. 1055 ; Johnson and Meay v. NicoU and Son (1881), 8 Ret. 437. ■* But see Com., Seet. 13 ante, p. 65. 5 Per Erskine, J., in Brown v. Edgington (1841), 2 M. & G. 279 at p. 292 l^. . J . -. J--'-^ ° .^mmn V. Goati.Jxm.a'nd St,(;.f.l, (fn. ,(1,8f^5), 12 Ret. JSfi.. i" 38 & 39 tTet. c. 63, Seet. 6 (2). '^ 8 Jaff^ V. Ritchie (1860), 23 D. 242 ; Carter and Co. v. Camplell (1885), 12 Ret. 1075. FORMATION OF THE CONTRACT. 69 Perhaps a remedy may also be found under this sub-section Sect. 14. on the ground that the goods are deficient in qyudity. (l) "Has examined." In the original bill the exclusion of implied warranty did not depend on the fad of examination by the buyer, but upon his having had an opportunity of examination. The alteration was made in Select Committee of the Commons, and probably widens the previous English remedy. (m) " Usage of trade." Com. infra, p. 72. (n) "Exp-ess" — "implied." See Sect. 55, which expresses the converse of this sub-section. The law of Scotland is not altered. ^ COMMBNTAEY. This section expresses what remains of the rule of Cavmt emptor. " caveat em;ptor," but the rule itself is now subordinated to the exceptions. The original principle of Scottish law was that a sound price implied a sound article, irrespective of the buyer's object in buying, or the knowledge of the parties regarding the condition of the goods.^ Even in England there was at one time " a current opinion that a sound price was tanta- mount to a warranty ^ of soundness," * but the older law^ of I " caveat emptor " was re-affirmed by Lord Mansfield in 1778,^ I 1 Cooper and Aves v. Clydesdale Shipping Co. (1863), 1 Macp. 677. The English law has been stated otherwise [Bell's Com. i. 470, M'Laren's note (3)], but correct by Sigge v. Parkinson (1862), 7 H. & N. 955 ; Nichol v. Oodts (1854), 10 Ex. 191. ( 2 "The principle of the law of Scotland is that every man selling an article is bound, though nothing is said of the quality, to supply a good article without defect unless there are circumstances to show that an inferior article was agreed on." — Per Lord Justice-Clerk Hope in Whealler-v. Methuen (1843), 5 D. 402 at p. 406. See also JRalston v. Bohertson (1761), Mor. 14238 ; Baird v. Pagan (1765), Mor. 14240 ; Lindsay v. Wilson (1771), Mor. 14243; Adamson v. Smith (1799), Mor. 14244; Campbell v. Mason (1801), Hume 678 ; Palston v. Pobb (1808), Mor. Sale, App. 6 ; Dickson and Co. v. Kincaid (15th December 1808), F.C.; Gilmer v. Galloway (1830), 8 Sh. 420 ; Paterson v. Diekson (1850), 12 D. 502 ; Fulton v. PTatt (1850), 22 Sc. Jur. 648. But, on the other hand, see Stewart v. M'Nicol (1814), Hume 701, where it was held that there was no implied warrandice in the case of a large lot of cattle purchased for a slump price. It seems to have been held that the bad must be taken with the good, as in the case of the sale of a draught of fishes. 3 "Warranty " is here used in the sense of "condition." * Per Grose, J., in Parkinson v. Lee (1802), 2 East 314 at p. 321. s See, for example, Chandeler v. Lopus (1603), Cro. Jac. 4 ; and Fitz- herbert's Natura Brevium (1537), p. 94 C. ^ Stuart v. Wilkins, 1 Douglas 18. 70 SALE OF GOODS ACT 1893. Seet. 14. and still more emphatically in the judgment in Parkinson v. Lee^ (1802). Subsequent cases show the development in English law of the exceptions now embodied in this section.^ Divergeftces The exceptions in England to the rule of " caveat emptor " Eu*^andand°^ ^^® ^° numerous that Scottish text- writers perhaps exag- Scotiand. gerated the effect of the rule in producing divergence between the laws of the two countries. Bell, writing in 1843, called the difference between the rules a " remarkable distinction," * but when taken in connection with the excep- tions in each case the divergence is comparatively trifling. Bell himself excepts from the Scottish rule of implied warranty " the case of faults so obvious that they cannot be supposed to escape ordinary observation," * while, speaking of English law, notwithstanding the general rule of caveat emptor, he excepts (1) warranty implied from trade usage ; (2) implied warranty " that the article sold shall answer its description as understood in the trade " ; and (3) implied warranty " in regard to an article ordered from a manufacturer that it shall be fit for the avowed purpose." ^ In 1 8 5 5 the Eoyal Com- mission appointed with a view to the assimilation of the laws of the United Kingdom, reported that the divergence I should be removed, and that the Scottish rule should be assimilated to that of England and Ireland.® Upon this Eeport was based the Mercantile Law Amendment Act, Scotland, 1856, which provided that where the seller was without knowledge that the goods were defective or 1 2 East 314. See also Za NewiAlU v. Nourse (1813), 3 Camp. 350 ; Barr v. Gibson (1838), 3 M. & "W. 390 ; Chanter v. Hopkins (1838), 4 M. & W. 399 ; Ormrod v. Huth (1845), 14 M. & "W. 651 ; OlUvamt v. BayUy (1843), 5 Q.B. 288 ; Burnley v. Bollett (1847), 16 M. & W. 644 ; Emmerton v. Matthews (1862), 7 H. & N. 586 ; Smith v. Balcer (1878), 40 L.J. N.S. 261. I ^ Laing v. Fidgeon (1815), 4 Camp. 169 ; Jones t. Bright (1829), 5 Bing. 1533 ; Brown v. Edgington (1841), 2 M. & G. 279 ; Shepherd v. Pyhus (1842), |3 M. & 6. 868 ; Beer v. Walker (1877), 46 L.J. C.P. 677. ' Bell on Sale, p. 96. See also M. P. Brown, pp. 285 et sea. ; Bell's Prin., Sects. 96, 97. * Bell on Sale, p. 96. Muil v. Gill (1840), 2 D. 1227. " Bell on Sale, p. 99. The English authorities cited are Jones v. Bowden (1813), 4 Tannt. 847 (trade usage) ; Gardiner v. Gray (1815), 4 Camp. 144 (description—" waste silk ") ; Bridge v. Wain (1816), 1 Stark 504 (descrip- tion— " scarlet cuttings"); Laing v. Fidgeon (1815), 6 Taunt. 108 (avowed purpose— saddles for export); Jones v. Bright (1829), 5 Bing. 533 (avowed purpose — copper sheathing for ship). • « 2nd Report, p. 10. See also Appendix to Eeport, p. 130. FORMATION OF THE CONTRACT. 71 Act. of bad quality he should not be held to warrant their Sect. 14. quality or sufficiency, but the goods, with all faults, should be at the risk of the purchaser unless they were expressly sold for a specified and particular purpose.^ This, it will Effect of be observed, did not produce assimilation ; on the contrary, Scottish Mer- , , J . . ' •" cantile Law / tbe divergence was increased. If the Scottish rule was Amendment / formerly broader than the English one, it was now so narrowed as to form a greater contrast in the other direc- tion. Apart from imputed fraud,^ there was now no implied warranty except in the case of goods expressly sold for a specified and particular purpose. This excluded implied warranty arising from usage of trade, or from circumstances showing reliance by the. buyer on the seller's skill or judg- ment, or from the fact that the seller was also manufacturer, and that the buyer had not had an opportunity for inspec- tion. To exclude the operation of the Act in the case of specific goods it was necessary that there should be either (1) an eocpress warranty, or (2) a sale expressly made for a specified and particular purpose. " You can never say that goods have been sold for a specified and particular purpose if they have been sold for the ordinary purpose for which all such goods are sold." ^ The provisions of the Mercantile Law Amendment Act are repealed by this Act,* and the English and Scottish 1 19 & 20 Vict. c. 60, Sect. 5. ^ See Com., Sect. 11 ante, p. 55 ; and Com., Sect. 61 post, p. 271. ' Per Lord President Inglis in Hamilton v. Sobertson (1878), 5 Ret. 839 at p. 842. See also Dunlop v. Cravjfm-d (1886), 13 Eet. 973 at p. 975. Effect was given to this view of the Mercantile Law Amendment Act in the follow- ing Sheriff Court cases : — Adams v. Pattison and Co. (1884), Guth. Sel. Ca. 2nd sen p. 526 ; Mollison v. HamiVUm (1886), 2 Shf. Ct. Rep. 303 ; Young v. Gray (1893), 10 Sh. Ct. Rep. 79. Under the Act an express warranty might be either written or verbal, but if verbal it was necessary to prove the very words used — Robeson v. Wav^h (1874), 2 Ret. 63 ; Machie v. Eiddell (1874), 2 Ret. 115 ; Rose v. Johnston (1878), 5 Ret. 600. But see Scott v. Steel (1857), 20 D. 253. An express warranty was founded on in Gardiner v. il'Leavy (1880), 7 Ret. 612 (horse), and Croan v. Vallance (1881), 8 Ret. 700 (horse). The Act was held to apply in Laing v. Western (1858), 20 D. 519 (jewellery); Young v. Giffen (1858), 21 D. 87 (horse); Hardie v. Austin and M^ Asian (1870), 8 Macp. 798 (seeds); Hardie v. Smith and Simons (1870), 42 Sc. Jur. 454 (seeds); jRobeson v. Waugh, supra (horse); Rough v. 3foir and Son (1875), 2 Ret. 529 (horse) ; Rose v. Johnston, supra (horse) ; Hamilton v. Robertson (1878), 5 Ret. 839 (horse); Dunlop v. Crawford (1886), 13 Ret. 973 (cows). See further on this subject Com., Seoi^ 55 post, p. 258. 4 .Qonf cn QTir) SftlioHnlfi 72 SALE OF GOODS ACT 1893. Sect. 14. Effect of section on previous English law. Effect upon previous law of Scotland. rules as to implied warranty are now by this section com- pletely assimilated. The section was the subject of much consideration and frequent alteration in Parliament, and as finally adjusted it probably extends the exceptions to the rule of camat emptor beyond the previously existing English exceptions. Thus (1) there is no distinction between a seller who is also a manufacturer and a seller who is simply a dealer ; ^ (2) where goods are bought by description the buyer's remedy is not excluded by his having had an opportunity of examining the goods, if in point of fact he has not examined them;^ and (3) even where the buyer has examined the goods, if the defect is latent and not such as the examina- tion ought to have revealed, he may proceed upon an implied warranty by the seller. Comparing the section with the law of Scotland im- mediately before the passing of the Act, the following alterations may be noted : — 1. An implied warranty may now be gathered from any circumstances tending to show knowledge by the seller of the purpose for which the goods are required. Thus the known trade or occupation of the buyer may be important, as where cork is sold to a corkcutter, or flour to a baker, or small-wares to a retail dealer. Formerly in Scotland, in the case of specific goods, there was no implied warranty unless the purpose was expressly stated.^ 2. Goods bought by description from a dealer must be of merchantable quality under that description. Formerly in the case of specific goods inferiority of quality gave no remedy by implication, unless there was at least a small percentage of adulteration to support a plea that the goods were not of the description stated in the contract.* 3. An implied warranty may now be annexed by usage * See note (h) supra, p. 68 ; and Com., Sect. 13 ante, p. 65. ^ See note (1) supra, p. 69. M9 & 20 Yiot. c. 60, Sect. 5. * Bardie v. Austin and M' Asian (1870), 8 Maop. 798 ; Bardie v. Smith and Simons (1870), 42 Sc. Jur. 454; See note (k) supra, p. 68. But goods bought by description are seldom specific. FORMATION OF THE CONTRACT. 73 Sale by SAMPLE. of trade. No, exception of this nature was contained in the Sect. 14. Act of 1856.1 The section does not expressly limit the rule of caveat Caveat emptor emptor to specific goods, but the exceptions to the rule cover ^IpSe^'^ almost every conceivable case of sales of goods in genere. ^^ By the former law of England implied conditions or war- ranties were not interfered with in the case of non-specific goods,^ and in like manner it was held in Scotland that Sect. 5 of the Act of 1856,^ excluding implied warranty, only applied to goods in corpore specifico.* In regard, therefore, to non-specific goods, the law of Scotland, previous to the present Act, did not differ from that of England.5 Sale hy Sample. 15. — (1.) A contract of sale ^"^ is a contract for sale Sect. 15. by sample where there is a term in the contract, express or implied,^*^ to that effect. 1 19 & 20 Vict. c. 60, Sect. 5. 2 ' ' Where a buyer buys a, specific article the rule caveat emptor applies, but where the buyer orders goods to be supplied . . . there is an implied warranty." — Per Cockburn, C. J., in Bigge v. Parkiiison (1862), 7 H. & N. 955 at p. 961. See also judgment of Parke, B., in Barr v. Gibson (1838), 3 M. & W. 390 at p. 399 ; and judgment of Grove, J., in Smith v. Baker (1878), 40 L.T. N.S. 261. ' 19 & 20 Vict. c. 60. * "The kind of sale contemplated by the Act is a sale in which, after the constitution of the contract, the goods are at common law at the risk of the purchaser. That is a sale of a definite quantity or corpus, for unless it were that, the goods could not be at the risk of the purchaser." — Per Lord Justice- Clerk Inglis in Jaff6 v. Bifchie (1860), 23 D. 242 at p. 249. See also Hutchison and Co. v. Renry and Corrie (1867), 6 Macp. 57 ; Cooper and Aves V. Clydesdale Shipping Co. (1863), 1 Macp. 677 ; Garter and Co. v. Campbell (1885), 12 Ret. 1075. In a Scotch appeal Lord Chancellor Cairns incidentally applied the Mercantile Law Amendment Act (Scotland) to goods ordered and therefore not specific [Macfarlane and Co. v. Taylor and Co. (1868), 6 Macp. H.L. 1 at p. 14], but the dictum was not necessary to the judgment. It may be noted, however, that Scottish judges do not consistently apply the prin- ciples set forth in such cases as Jaffd v. Ritchie. Thus the Act has been applied to sales of seed which, when sown, proved defective, although the foods were furnished per order, and the risk could not pass to the purchaser efore delivery. See e.g. Stewart v. Jamieson (1863), 1 Macp. 525, where the grounds of judgment in Jaff6 v. Ritchie seem to have been entirely ignored. * " The law of England in such cases was always identical with the law of Scotland. If an order was given in a contract of sale in either country for an article which was bespoken with a view to be applied to a particular purpose, and the order was accepted, action would lie on that contract at the 74 SALE OF GOODS ACT 1893. Sect. 15. (2.) In the case of a contract for sale by sample — (a.) There is an implied condition ^"^ that the bulk shall correspond with the sample in quality i^''^ (6.) There is an implied condition ^"^ that the buyer shall have a reasonable opportunity ^'' of comparing the bulk with the sample : (c.) There is an implied condition ^°^ that the goods shall be free from any defect, rendering them unmerchantable/''^ which would not be appar- ent on reasonable examination of the sample/-'^^ Notes. (a) "Contract of sale." Defined Sect. 1 and Sect. 62 (1). (h) "Express or implied." There is no distinction in this section between a sample of specific goods and of goods to be manufactured or supplied. The former law, both of England and Scotland, seems to have made such a distinction, and only in the latter case to have implied a condition that the goods were free from defect, rendering them unmerchantable. Com. infra, p. 76. (c) "Condition." Not merely an English "warranty." Com., Sect. 10 ante, p. 46. , {d) " Quality of goods includes their state or condition." Sect. 62 (1). (e) "BeasonaUe opportunity." It was held by Lord Tenterden in Lorymer v. Smith'^ (1822), that the buyer had not received reasonable facilities for comparing the bulk with the sample. ^ (/)• Sub-sect. (2) (c) seems to widen the buyer's remedy in Scotland as it existed under the Mercantile Law Amendment Act 1856, Sect. 5. An express warranty was required,^ and no exception was made in the case of sale by sample. instance of tte purchaser for implement or damages just as in Scotland. There was no dissimilarity in that reSpeot between the laws of the two countries to be corrected by legislation." — Per Lord Justice-Clerk Patton in Sutchison and Co. v. Henry and Carrie (1867), 6 Macp. 57 at B. 59. 1 1 B. & C. 1. ^ ^ The judgment in other respects contained bad law, and was corrected by HibUnoUte v. M'Morine (1839), 5 M. & W. 462. ^ Com., Sect 14 ante, p. 71. FORMATION OF THE CONTRACT. 75 COMMENTAEY. A sample is a description wanting words. It is an Sect. 15. appeal to the understanding in which objective illustration Relation of takes the place of, or supplements written or spoken Ian- 3™^^^*°^ guage.^ A sale by sample has therefore the general legal effects of a sale by description, although sample and description may so supplement each other that corre- spondence of the article sold with both becomes essential.^ In one respect, however, there is a marked difference between description and sample. Description in the mer- cantile sense usually refers to the name of a genus to which well-known attributes are attached. If the thing furnished includes these attributes it corresponds with the description, although within the description itself there may be great diversity of quality. Sample, on the other hand, includes quality as well as the more general attributes. Thus, if goods are sold by sample and are described as "flax yarn," an admixture of jute in the goods furnished wiU render them disconform alike to sample and to description,^ but if the goods are entirely "flax yarn" they will correspond with the description, although they may fall far short of the sample in quality. By Sect. 13 the goods must correspond with the description, but the correspondence there referred to is merely that of hind. In this section it is taken for granted that the goods correspond with the sample in kind, but it is expressly provided, in conformity with the principles stated 3,bove, that they must also correspond with the sample in quality. When goods are sold both by sample and by descrip- tion. Sect. 14 provides that they must correspond with the description as well as with the sample. This illustrates a converse view of the relation of sample to description. The ^ " The office of a sample is to present to the eye the real meaning and intention of tlie parties with regard to the subject matter of the contract, whfch," owing to the imperfection of language, it may he difficult or impossible to express in words. " — Per Lord Macnaghten in Drummond v. Van Ingen (1887), 12 App. Cas. 284 at p. 297. 2 As in Sect. 13. ' See Jage v. BUchie (1860), 23 D. 242. 76 SALE OF GOODS ACT 1893. Sect. 15. goods may agree with the sample in every respect, but may not correspond with some of those attributes included in the name or phrase by which the ge,nns is described.^ Latent faults. Assuming the goods to correspond both with sample and description, the buyer is further safeguarded against latent faults rendering the goods unmerchantable. Sect. 14 (2) applies to goods bought by description and the present section to goods bought by sample [15 (2) (c)]. In the former case, however, the defect must be such as not to be apparent on a reasonable examination of the goods by the buyer if he happens to have made such an examination, while in the latter case . Jhe_de|ect_ mujsUbeu-SJJfih ^s .not,, .to be apparent on a reasonable examination of_thejamj?/e.^ Sample in It has been already noticed ' that description is almost anr^^Tak?^^^ neccssarily confined to executory sales, and that the rule is of specific not affected by a combination of description and sample. ^°° ^' In this section, however, it is provided without qualification that where the sale is by sample the goods shall be " free from any defect rendering them unmerchantable which would not be apparent on reasonable examination of the sample." In the case of specific goods this appears to alter the previous law both of England and Scotland. A sample of specific goods is often given, and before the Act it reasonably inferred an undertaking that the bulk corre- sponded with the sample. But the seller did Aot undertake, nor did the law imply, any obligation as to merchantable quality. This explains the case oi Parhinson v. Zee* (1802), j which is in sharp contrast to Heilbutt v. Hidlcson^ (1872). [T he distinct ion between these cases has sometimes been [attributed to the fact that in Parkinson v. Lee the seller [was a merchant, while in Heilbutt v. Hichson he was a I manufacturer,** and Lord Esher expressed the opinion t|iat ' See Mody v. Gfregson (1868), L.R. 4 Ex. 49, in which "grey shirtings" were conform to sample, but were found to be weighted with China clay, a substance entirely foreign to the description "grey shirtings." 2 Heilhtdtv. Hickson (1872), L.R. 7 C.P. 438. ' Com., Sect. 13 ante, p. 63. * 2 East 314. See as to Scotland Couston, Thomson, and Co. v. Chapman (1872), 10 Macp. H.L. 74, and especially remarks of Lord Chancellor Hatherley at p. 80, and Lord Colonsay at p. 84. " L.R. 7 C.P. 438. " As to sale by a manufacturer see Com., Sect. 13 ante, p. 65. FORMATION OF THE CONTRACT. 77 the former case was no longer law.^ It is submitte d, Sect. 15. however, that as Parkinson v. Lee related to a sale of specific goods, this was a sufficient ground of judgment,^ and that the law in this respect should have been preserved. Sub-section (1) provides that to constitute a sale by Sample a term sample there must be a term in the contract to that effect. ^^ tl»e contract. The exhibition of a sample does not necessarily make it a term of the contract ; butj_on „lha. other hand, such a term may be implied from the circumstances without being expressed. Where a sample is made use of it is often difficult to determine whether or not it enters into the constitution of the contract.^ As a term of the contract, care should be taken for the Preservation preservation and identification of the sample.* To this t^n 'o/sampie. end there existed an old Scottish practice of sealing the sample.^ 1 In Randall v. Newson (1877), 2 Q.B.D. 102 at p. 106. 2 See Benjamin on Sale, pp. 637, 654, 663. 3 The sale was by sample in Watt v. Glen (1829), 7 Sh. 372 ; Padgett amd Co. V. M'Nair and Brand (1852), 15 D. 76 ; Jowett and Sons v. Stead (1860), 22 D. 1400 ; Couston, TJiomson, and Co. v. Chapman (1872), 10 Macp. H.L./ 74 ; Parkinson v. Lee (1802), 2 East 314 ; Parker v. Palmer (1821), 4 B. & Aid.' 387 ; Lorymer v. Smith (1822), 1 B. & C. 1 ; Carter v. Crick (1859), 4 H. & N. 412 ; Russell v. Nicolopulo (1860), 8 C.B. N.S. 362. Samples were exhibited or referred to, bnt the sale was held not to be by sample, in Kerr and Sons v. M'Dowall (1828), 6 Sh. 1029 ; Muil v. Gibb (1840), 2 D. 1227 ; , WhiU and Co. Ltd. v. Dougherty (1891), 18 Eet. 972 ; Tye v. Fynmore / (1813), 3 Camp. 462 ; Meyer v. Everth (1814), 4 Camp. 22 ; Gardiner v. Gray I (1815), 4 Camp. 144 ; Powell v. Horton (1836), 2 Biug. N.C. 668 ; Josling v.i Kingsford (1863), 13 C.B. N.S. 447. In Hills v. Buchanan (1786), Mor. 14200, 3 Pat. App. 47, samples were sent after the contract had been com- pleted. The question was one of constructive delivery, but it was explained that the object of sending samples to the buyer was to enable him to distin- guish the respective qualities of different parcels of tobacco with a view to re-sale. ^ Bell's Prin. Sect. 98, quoted and approved by Lord President Inglis in White and Co. Ltd. v. Dougherty (1891), 18 Ret. 972. 5 Cheap v. Cleugh (1713), Mor. 14238. In a case where wheat was sold by sample, a witness for the seller stated tbat the buyer had tampered with the sample by picking out sprouted and moulded grains, but his evidence was unsupported, and was not credited— fTaJi!* v. Glen (1829), 7 Sh. 372. The same suggestion as to tampering with the sample was made in Lamb v. M'Kenzie and Sons (1891), 8 Sh. Ct, Repts. 28, and here also the evidence was held insufficient. BE ASOER' TAINED. PAET II. EFFECTS OF THE CONTEACT. Transfer of Property as between Seller and Buyer S"^ Sect. 16. 16. Where there is a contract for the sale of Goods MUST unascertained goods ^''^ no property in the goods is BE ASOER- O i. £ J O transferred to the buyer unless and until the goods are ascertained.^"' Notes. (a) As to changes in the law of Scotland in connection with transfer of property, see Com., Sect. 1 ante, p. 3. (6) " Unascertained goods." That is, goods in genere as distin- guished from "specific goods," which are defined [Sect. 62 (1)] as "goods identified and agreed upon at the time a contract of sale is made." Even in regard to specific goods the passing of the property is subject to the rules of Sect. 18, while in the case of unascertained or non-specific goods the property does not pass in any case. In an " executory sale " the goods are " unascer- tained," but they are not necessarily ^'future goods " [defined Sect. 62 (1)]. They may be in esse and belong to the seller, but may require to be selected from a larger number or taken from bulk.^ ^ The following English cases maybe consulted : — Wallace v. Breeds (1811), 13 East 522 ; Austen v. Craven (1812), 4 Taunt. 644 ; £usk v. Davis (1814), 2 M. & S. 397 ; fFhiie v. Wilks (1814), 5 Taunt. 176 ; Shipley v. Davis (1814), 5 Taunt. 617 ; Campbell v. Mersey Docks Co. (1863), 14 C.B. N.S. 412 ; Gabarron v. Kreeft (1867), L.R. 10 Ex. 274 ; Jenner v. SmUh (1869), L.E. 4 C.P. 270. In all these cases there was an existing subject, but as the whole was not sold, and no particular part had been appropriated to the contract, no property passed to the buyer. See also BoMe v. Thwaites (1827), 6 B. & C. 388 ; Dixon v. Tates (1833), 5 B. & Ad. 313 ; Aldridge v. Johnson (1857), 7 E. & B. 885 ; Mirabita v. Imperial Ottoman Bank (1878), 3 Ex. Div. 164. The case of Whitehouse v. Frost (1810), 12 East 614, seems con- EFFECTS OF THE CONTRACT. 79 (c) " Ascertained" The word is not specially defined, but it Sect. 16. may be taken to refer to goods made specific, i.e. "identified and agreed upon" [Sect. 62 (1)]. It has possibly a wider meaning in Sect. 52. See note (c) to that section posi, p. 249. "Uncon- ditionally appropriated " seems to have much the same meaning in Sect. 18, Eule (5). 17. — (l.) Where there is a contract for the sale of Sect. 17. specific or ascertained goods ^"^ the property ^'^ in them p^g°sErwHEN is transferred to the buyer at such time^"^ as the intended to "' PASS. parties to the contract intend it to be transferred. (2.) For the purpose of ascertaining the intention ^''^ of the parties regard shall be had to the terms of the contract, the conduct of the parties,^'^ and the circum- stances of the case.^-'^^ Notes. (a) " Specijk or ascertained goods." " ' Specific goods ' mean goods identified and agreed upon at the time a contract of sale is made" [Sect. 62 (1)]. The phrase "ascertained goods" is not defined, but may refer to goods made specific after the contract of sale. Probably the alternative " specific or ascertained " is used because, although " specific " is synonymous with " ascertained," it is not necessarily synchronous. Thus the goods may be specific at the date of the contract, or they may be afterwards ascertained, i.e. made specific. See also Sect. 16, note (c) supra, and Sect. 52, note (c) post, p. 249. (6) " Property." Defined as " the general property in goods and not merely a special property" [Sect. 62 (1)]. (c) "At such time." E.g. the completion of the loading of a vessel,! oj. despatch of the goods from the vendor's warehouse. ^ trary, but is generally disapproved. See Benjamin, 313. In Scotland, under tlie old law, the property only passed on delivery, which necessarily implied specific appropriation. In BrougJUon v. Aitchisons (15th November 1809), F.C., the sale related to a portion only of the bulk, and there had been no appropriation, yet the Court held that the property had passed. This case, however, is of doubtful authority, and in the opinion of Bell "is not to be' held as a precedent."— Bell's Com. i. 191, note. See also Ross, Leading Cases, Com. Law, ii. 567. 1 Anderson v. Morice (1876), 1 App. Gas. 713. 2 Fragano v. Long (1825), 4 B. & C. 219. 8o SALE OF GOODS ACT 1893. Sect. 17. (d) Eules for ascertaining the intention are contained in Sect. 18. («) " Conduct of the parties." E.g. in weighing, measuring, or putting the goods into a deliverable state.^ The phrase may- mean more than a " course of dealing " under Sect. 55. Thus one of the parties may, by his conduct, be barred personali excep- tiorifi from afBrming or denying the intention to transfer. ^ (/) " Circumstances of the case." E.g. the circumstances may be such as to show a ready money transaction in which the trans- fer is conditional upon payment of the price. ■ Change in the law of Soot- land as to delivery and possession. Beputed ownership. Commentary. This section embodies an important change in the law of Scotland. Formerly the property in specific goods did not pass to the buyer until delivery, now it passes accord- ing to the intention of parties irrespective of delivery.* The former law of Scotland was based on the maxim that " the property of moveables is presumed from posses- sion." * In the form, however, of reputed ownership, the law went a step further than a mere presumption which may be overcome by contrary proof,^ and which can only be of importance as between competing parties, neither of whom has a valid independent title. Eeputed ownership, where it was recognised, created a right in favour of the creditors of the possessor which was not affected by proof of a latent contrary right. But the strict theory was necessarily 1 As in Logan v. Le Mesurier (1847), 6 Moo. P.C.C. 116, and Gilmour v. Supple (1858), 11 Moo. P.C.C. 551. ^ As in Richmond and Co. v. Railton (1864), 16 D. 403. 3 Sect. 18, Rule 1. ^ Bell's Gom. i. 178. "Tradition or delivery in a sale of moveables is important only as a means of obtaining possession, and possession is the true completion of the contract of sale." — Per Lord Justice - Clerk MoncreifiF in Orr's Trustee v. Tullis (1870), 8 Macp. 936 at p. 945. The nature and essentials of possession are explained by Lord Neaves and Lord Kinloch in Moore v. Gledden (1869), 7 Macp. 1016 at pp. 1020, 1024. A classified list of Scottish cases relating to possession of moveables will be found in Appendix IL post, p. 312. The following is an English view of the subject : — "Possession of goods is prvmAfaae evidence of title, but that possession may be precarious, as of a deposit ; it may be criminal, as of a thing stolen ; it may be qualified, as of things in the custody of a servant, carrier, or factor. Mere possession without a just title gives no property." — Per Lord Lough- borough in Lickbarrow v. Mason (1790), 1 H.Bl. 357 at p. 360. ^ Bell's Prin., Sect. 1314. of rule. modification. EFFECTS OF THE CONTRACT. 8i subject to various modifications, viz. (1) a common-law Sect. 17. sanction to well-recognised contracts subordinate to owner- Modifications ship, such as lease ; ^ (2) a common-law recognition of the intention of parties as embodied in a condition postponing the passing of the property as in hire-purchase ; ^ and (3) a statutory right created in 1856, by which the buyer was preferred to the seller's creditors, although the goods had not been delivered,* and a seller was bound under certain conditions to give delivery to a sub-purchaser notwithstand- ing a general balance due to him by the first purchaser.* These relaxations of the rule as to possession were not Reasons for recognised without difficulty, and were occasionally strongly condemned.^ They were, however, rendered necessary by the greatly increased complexity of commercial interests in the present century. Bell, while speaking in almost affectionate terms of possession as " the true and proper badge of trans- ferred property," admits that '' an adherence to this plain and simple rule is utterly impossible amidst the compli- cated transactions of modern trade." ® Elsewhere he points out that " creditors in giving credit must henceforth ^ lay their account with a suspending condition, and not conceive themselves entitled absolutely to rely on the property as irrevocably vested in their debtor." ^ Finally, in his post- humous work on Sale, Bell speaks of the rights of the creditors of the seller as they existed in his day, and before ^ As in Eadie v. Young (1815), Hume 705, and Orr's Trustee v. TuUis (1870), 8 Macp. 936. ^ See, for example, Murdoch and Co. Ltd. v. Greig (1889), 16 Ret. 396, correcting Cropper and Co. v. Donaldson (1880), 7 Bet. li08. See also Arbitration Case, Barclay and Brand v. Guild (1876), reported Guth. Sel. Ca. 2nd ser. 519. Formal sanction is given by this Act to conditions suspensive of tbe passing of the property. See Sect. 19 post, p. 99. 2 19 & 20 Viet. c. 60, "Sect. 1, repealed by this Act, Sect. 60 and Schedule. ^ Ibid., Sects. 2 and 3 repealed as above. ^ Lord Justice-Clerk Hope would not recognise any injustice in the seller's creditors carrying off the subject of sale from a buyer who had paid the price. "The principle of the Scotch law," he held, "is both recommended by practical justice and by expediency " — Boak v. Megget (1844), 6 D. 662 at p. 668. And again, "Our law is, in the most fundamental points of doctrine and practice respecting the law of ownership and the effect of possession of moveables, essentially different from the law of England, and we are apt to forget our own very clear and far superior rules " — Anderson v. Buchanan (1848), 11 D. 270 at p. 274. « Bell's Com. i. 178. ' Bell writes in 1826, and evidently refers to Cowan v. Spence (1824), 3 Sh. 42. ^ Bell's Ccm. i. 273 ; see also Com. i. 258. G 82 SALE OF GOODS ACT 1893. Sect. 17. Views of the Bench. an Effect upon rights of creditors. the Mercantile Law Amendment Act of 1856, as unhappy and unjust consequence of the general principle of the Scottish law." ^ Similar views as to the necessity or propriety of a relaxation of the rigid rule have frequently been expressed from the Bench, 6.g. by Lord Ivory in an oft-quoted passage where he says "creditors are bound to know that many honest occasions of possession may arise in the daily com- plications of human affairs without any radical title of pro- perty on which they would be safe to rely as a ground of credit." 2 Lord Justice-Clerk Moncreiff in 1882 summed up the effect of modem case law by the statement that the doctrine of reputed ownership " is no longer of much im- portance,"^ a result which requires careful consideration in view of the extensive change in the Scottish law of posses- sion introduced by the present Act. Thus it may be doubted if, in consequence of the new doctrine of the passing of the property by the contract without change of possession, the just rights of creditors are sufficiently pro- tected by the ordinary common-law rules or by the provi- sions of Sect. 25. The last-mentioned provisions form a partial return to the doctrine, but they only relate to the case of a particular purchaser or pledgee. The general creditors of the seller or buyer are not protected, and the question therefore arises whether it may not be expedient ^ Bell on Sale (1844), p. 13. The view here expressed was strongly con- demned by Lord Justice-Clerk Hope immediately after the publication of Bell's work— ^oafc v. Megget (1844), 6 D. 662 at p. 668. ^ In Shearer v. Christie (1842), 5 D. 132 at p. 136. The same statement was repeated by Lord Ivory as Lord Ordinary in Anderson v. Buchoma/n (1848), 11 D. 270 at p. 274, and is quoted with approval by Lord Justice- Clerk Moncreiff in Orr's Trustee v. Tullis (1870), 8 Macp. 936 at p. 946. It is to be observed, however, that in both of the cases in which Lord Ivory, as Lord Ordinary, expressed his views, he was overruled by the Court. 5 In JRobertsons v. M'Intyre (1882), 9 Ret. 772 at p. 778. Reputed ownership was fally discussed by Lord Cowan and Lord Neaves in Orr's Trustee v. Tullis (1870), 8 Macp. 936. See also Mitchell v. Heys and Sons (1894), 21 Ret. 600. Lord Blackburn, however, assumes that reputed ownership still exists in a practical form in the law of Scotland. "If," he says, "you can show that the man who has acquired the jus ad rem has allowed the vendor to keep possession of the goods in such a way as is quite inconsistent with his jvs ad rem it seems very reasonable indeed to say that that shall be considered as analogous to a case of reputed ownership, and that being so the Mercantile Law (Scotland) Amendment Act does not take the goods out of it." — In M'Bain v. Wallace and Co. (1881), 8 Ret. H.L. at p. 113. EFFECTS OF THE CONTRACT. 83 to extend to Scotland the staHtory reputed ownership Sect. 17. which for centuries has formed part of the English bank- Suggested ruptcy COde.l statutory ^ •' , _ reputed It is not altogether in consequence of the new rule ownership. introduced into Scotland that the interests of creditors seem Hire-purchase to require further protection. A condition suspensive of ^*''' the passing of the property has long been recognised in Scotland ^ as well as in England,^ and has been given effect to in such contracts as hire-purchase, where the aim of the seller is to prevent the property passing to the buyer, and being carried off by assignees or creditors before payment of all the instalments of the price. The seller's rights do not conflict with those of third parties until he gives delivery, but, after the buyer obtains possession, he may fraudulently sell or pledge to third parties, or he may incur debt on the faith of the ownership of the goods. A remedy for the hardship involved in such cases as Murdoch and Co. Ltd. V. Greig^ (1889), was intended under the provisions of the Factors Act 1889,^ repeated in Sect. 25 (2) of this Act,« ^ It was introduced by the Statute 21 James I. c. 19 (1623), and in its present form will be found in Sect. 44 of the English Bankruptcy Act of 1883 (46 & 47 Vict. c. 52). As to reputed ownership in a question with the creditors of the reputed owner, see remarks of M. P. Brown (Sale, p. 27, note). 2 Stair, i. 14. 4 and 5 ; Ersk. iii. 3. 11 ; Bell's Com. i. 258 ; M. P. Brown, 43. The passage from M. P. Brown is quoted with approval by Lord President Inglis in Murdoch and Co. Ltd. v. Greig (1889), 16 Ret. 396 at p. 401. See also cases in Appendix II. post, p. 327. 5 SeeM'JEntirey. Crossley, H.L., 13th May 1895, Law Times, vol. xcix. p.6]. ' 16 Ret. 396. 5 52 & 53 vict. c. 45, Sect. 9. ' In Lee v. Butler [1893], 2 Q.B. 318, a contract of hire-purchase was held 1 to be an agreement to sell, there being an absolute obligation on the part of I the hire -purchaser to complete the instalments of so-called hire and thus I become owner. This decision was approved of by the House of Lords in I Helby v. Matthews, 30th May 1895, 11 Times Law Reports, 446. In Murdoch and Co. Ltd. v. Greig, the Court of Session expressly held the agreement to be a sale, and yet a iond-fide purchaser at a public auction was held bound to restore the article to the seller, in respect of a latent condition by which the passing of the property was suspended. This decision is no longer law, being covered by Sect. 9 of the Factors Act 1889 and Sect. 25 (2) of this Act as interpreted by Lee v. Butler, supra. In Eelby v. Matthews above referred to there was a clause in the agreement that the hirer might at any time terminate the hiring by delivering up the article hired (a piano) to the owner without being liable for more than the arrears of hire. This was held by the House of Lords (reversing the decision of the Court of Appeal) to distinguish the case from Lee v. Butler. It was said to form a real case of hire, and therefore to be beyond the scope of the present?Act, but the judgment is open to the observation that the hirer's option to treat the contract as either hire or sale extends to an option to treat the payments already made as either hire or 84 SALE OF GOODS ACT 1893. Sect. 17. but a recent House of Lords judgment shows that the remedy- is very imperfect, and in any event the general creditors of the hire-purchaser are still unprotected. Sale on ap- The condition in the case of hire-purchase affects the provai, etc. passing of the property, but does not make the sale itself conditional. It therefore differs in this respect from " sale on approval " or " sale or return," in neither of which is there any sale if the event forming the condition does not happen.-' Mortgage, etc. A transfer of property without transfer of possession BUis of sale. ^Qgg ^q^ apply to " any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security." ^ The law of Scotland, as affecting a security in the form of a sale, has, however, been much disturbed of recent years, and is not yet well settled.^ There is nothing in the law of Scotland analogous to the English Bill of Sale, by which a statutory method is provided of securing advances over moveables by means of registration.* Campbell, in his work on the Sale of Goods^ is of opinion that such a statutory provision is " unnecessary in Scotland : 1st, because in Scotland the doctrine of reputed ownership ezists inde- pendently of statute . . . ; and 2ndly, by reason of the principle that possession is necessary to transfer the owner- ship in moveables." But thisi author's argument does not seem to be supported by the Mercantile Law Amendment Act, Scotland, 1856,® or by the cases of Wyper v. Harveys '' (1861), M'Bain v. Wallace^ (1881), and MmoTid v. Mowat^ (1868), on which he founds.^" instalments of a price. The previous Factors Acts did not affect hire-purchase, because they only dealt -with documents of title, not -with the goods themselves. See Com., Sect. 25 post, p. 124. ^ See Com., Sect. IS post, p. 94. 2 Sect. 61 (4). 3 See Com., Sect. 61 post, p. 276. * The first Bills of Sale Act, 17 & 18 Vict. c. 36 (1854) formed the founda- tion of many of the decisions. This Act, as -well as an amending Act in 1866 (29 & 30 Vict. c. 96), was repealed by the Act of 1878 (41 & 42 Vict. c. 31). .A similar Act -was passed for Ireland in 1879 (42 & 43 Vict. c. 50). The English Act -was amended in 1882 (45 & 46 Vict. c. 43) and the Irish Act in 1883 (46 Vict. c. 7). The Acts -were further amended by short Acts in 1890 (53 & 64 Vict. c. 53) and 1891 (54 & 55 Vict. 0. 35). For a synopsis of the various Acts and the numerous decisions founded upon them, see Campbell on Sale of Goods, 2nd ed. (1891), pp. 156 to 214. « 2nd ed. (1891), p. 159. « 19 & 20 Vict. c. 60. !■ 23 n. 606. 8 8 Eet. H.L. 106. » 7 Maop. 59. " See Campbell, pp. 154 to 159. In Ooote v. Jecks (1872), L.R. 13 Eq. 597, EFFECTS OF THE CONTRACT. 85 It was held in a recent case,^ tliat where a dealer in Sect. 17. musical instruments had let out pianos on the hire-ipurchase system, and had afterwards by an indenture assigned both pianos and hire-purchase agreements in security of an advance, the assignation, so far as regards the hire-purchase agreements, was not invalid because not registered as a bill of sale. It was admittedly invalid as regards the pianos themselves, and it was argued that the deed must stand or fall as a whole, but this contention was negatived. " Upon the face of the instrument there was an assignment of proprietory rights and also of certain contractual rights. . . . Could two things which were different be said to be inseparable ? Each gave different rights and different remedies. ... If different instruments had been used to assign each, the Bills of Sale Acts would not be applicable to the instrument assigning the contractual rights." ^ So far as the law of England is concerned the section is General declaratory. Illustrations will be found in connection with ' "^^trations. the immediately succeeding section.^ Rules for Ascertaining Intention. 18, Unless a different intention appears, the Sect. 18. followins are rules for ascertaining the intention of ^JJ,"!lf™, o O ASOBETAINI the parties ("^ as to the time at which the property ^'^ intention. in the goods '^^ is to pass to the buyer. a minute of lease of heritage in Scotland was deposited by an English debtor with an English creditor, along with an agreement pledging all furniture and effects in the leased premises in security of an English debt. The pledge was clearly ineffectual according to the law of Scotland, and it was maintained that to be effectual in England it was necessary that the agreement should be registered in terms of the Bills of Sale Act of 1854. It was held by Bacon, V. C, that as the Act did not extend to Scotland registration was unnecessary, and the curious result followed that a security became available to the creditor which was invalid on different grounds in both countries. 1 In re, IscuKson, ex parte The Trustee, Ct. of App. (7th December 1894), 11 Times Law Rep. 101. 2 Per Lord Esher, M.R., 11 Times Law Rep. at p. 102. Lord Esher's views are supported by In re Bwrdett, ex parte Byrne (1888), 20 Q.B.D. 310, and Cochrane v. EwtunstU (1890), 25 Q.B.D. 116. 3 Sect. XSpost, p. 89. 86 SALE OF GOODS ACT 1893. Sect. 18. Rule 1. — Where there is an unconditional contract for the sale of specific goods/*^ in a deliverable st^te/"^ the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment ^'^^ or the time of delivery/'^ or both/-''^ be postponed. Eule 2. — Where there is a contract for the sale of specific goods and the seller ^^^ is bound to do something to the goods, for the purpose of putting them into a deliverable state, the pro- perty does not pass until such thing be done, and the buyer has notice thereof/''^ Eule 3. — Where there is a contract for the sale of specific goods in a deliverable state, but the seller ^^ is bound to weigh, measure,^'^ test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price,^^^ the property does not pass until such act or thing be done, and the buyer has notice thereof^") Rule 4. — When goods are delivered to the buyer on approval ^*^^ or " on sale or return " ^*^ or other similar terms the property therein passes to the buyer : — (a.) When he signifies his approval or accept- ance to the seller or does any other act adopting the transaction : (&.) If he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return EFFECTS OF THE CONTRACT. 87 of the goods, on the expiration of such Sect. 18. time, and, if no time has been fixed, on the • expiration of a reasonable time.® What is a reasonable time is a question of fact/™^ Eule 5. — (1.) Where there is a contract for the sale of unascertained or future goods ^"^ by de- scription,^"^ and goods of that description and in a deliverable state are unconditionally appro- priated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.^^^ (2.) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee or custodier ^*^ (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal,^''^ he is deemed to have unconditionally appropriated the goods to the contract. Notes. (a) " Intention of the parties." The rules of this section form an expansion of Sect. 17. (b) " Property " — " goods " — " specific goods." Defined Sect. 62 (1). (c) "Deliverable state." See Sect. 62 (4). {d) Postponed time of payment. As where credit is given, with or without a bill for the price. ^ 1 E.g. Someroille and Co. v. Stein (1796), 3 Pat. App. 462. SALE OF GOODS ACT 1893. (e) Postponed time of delivery. As in Gibson y. Forbes^ (1833). It was found difficult to square this case with the principles of Scottish law, and it has therefore been looked upon as excep- tional and doubtful.^ The doubt seems to be removed by this Act, but see judgment of North, J., in Nicholson v. Harper [1895], 11 Times Law Eep. 435. In Distillers Co. Ltd. v. Russell and Co.'s Trustee^ (1889), the price was paid at once, but the goods remained undelivered for five years. It was held under the former law of Scotland that the property had not passed to the buyer. Under the rule of this section the property would have passed at the date of the contract, and the case is therefore no longer authori- tative. "Delivery" defined Sect. 62 (1). (/) Postponement of both payment and delivery. Delivery is often made to depend upon payment,* but the protection to the seller afforded by withholding delivery is now confined to a lien for the price of the goods sold. He is not entitled, as formerly in Scotland, to retain for a general balance.^ (g) The seller's obligations are alone taken into account. ^ The contract may impose a duty on the buyer, e.g. to sever industrial growing crops, or to fell growing wood,^ but this will not prevent the passing of the property,* unless so arranged. If the duty imposed on the seller is to be done after delivery, it will not prevent the property passing by delivery, even if it has not passed by the contract itself.® A familiar example is Tvhere a seller engages to keep awatch or clock in repair for a certain time.i" (h) The notice to the buyer here provided was a dded to the bill on aTsuggesEion" from Scotland. It seenieSTnequi table that the buyer should be liable to undertake risk of which he was ignorant. It is not, however, provided that the seller give notice, and it seems sufficient if the buyer is cognisant^ of the act or thing being done. («) In international contracts where weights or measures differ, questions may arise as to which standard is to rule.^^ 1 11 Sh. 916. " See remarks by Eoss — Leading Cases (Com. Law), ii. 567. 3 16 Ret. 479. * As in Smith v. Allan and Poynter (1859), 22 D. 208. ^ The former rule is illustrated by M'NaugMon v. Baird and Co. (1852), 24 Sc. Jur. 623. = See Turl^ v. Bates (1863), 2 H. & C. 200. ' As in 7)«/v. Brovm (14tli February 1814), F.C., Eev. H. of L. (1817), 6 Pat. App. 332. ^ "If the things to be done are entirely in favour of the purchaser, and such as he may dispense with, they cannot affect constructive delivery," — Per Lord Deas in Bla/ik v. Incorporation of Bakers (1867), 6 Macp. 136 at p. 143. * Hammond v. Anderson (1804), 1 B. & P. N.R. 69 ; Oreaves v. Hepke (1818), 2 B. & Aid. 131. i» Benjamin on Sale, p. 291. " As in SchvMrmans v. Stephen (1833), 11 Sh. 779. See also Ainslie v. Murray (1881), 8 Ret. 636. EFFECTS OF THE CONTRACT. 89 ij) But the mere absence of a fixed price in stated figures Sect. 18. will not prevent the property passing, if there are data for fixing it, e.g. where goods are sold at so much per ton and the total tonnage is ascertained. ^ {k) "Approval" — "sale or return." See Com. infra, p. 94. (l) "Reasonable time." This applies equally to "sale on approval " and to " sale or return." Lord Young suggests that it is more appropriate to the former contract, and that " sale or return " is more of the nature of agency.^ The distinction, however, has not been recognised. See "sale or return" de- fined in Moss V. Sweet^ (1851). See also Com. infra, p. 94. {m) " Reasonable time is a question of fact." There is a general provision to this effect in Sect. 56. The special provision is superfluous. (?i) "Future goods," i.e. "goods to be manufactured or acquired by the seller after the making of the contract of sale " [Sect. 62 (1)]. (0) "Description." See Sects. 13 and 14 (2) and Note (a) ante, p. 62. (p) The assent of both parties is required to appropriation in order to pass the property. Such assent is practically a second and subsidiary contract. (q) " Custodier." This word was introduced in applying the Act to Scotland. Sect. 62 (1) provides that "bailee" in Scot- land includes custodier ; and the repetition of " custodier " throughout the Act was therefore unnecessary. (r) Reservation of right of disposal. See Sect. 1 9. COMMENTAEY. The first rule of this section deals with an unconditional General effect contract ; the second, third, and fourth deal M'ith different ° ™ ^^' kinds of conditions ; and the fifth relates to the appropria- tion of goods not originally specific. Bule 1. — This rule embodies a change in the law of Rule l. Scotland, to which particular reference has been made in connection with the preceding section.* The law of Eng- land is not altered, and has been thus expressed : " By the law of England the sale of a specific chattel passes the pro- perty in it to the vendee without delivery. . . . Where 1 See Hansen v. GrwigamcL Rose (1859), 21 D. 432. 2 15 Ret. at p. 989. ^ 16 Q.B. 493. * Ante, p. 80. 9° SALE OF GOODS ACT 1893. Sect. 18. Bales 2 and 3. Transfer of risk in Soot- land analogous to transfer of property in England. Scottish cases as to risk. there is a sale of goods generally, no property in them passes till delivery ; ^ hecause until then the very goods sold are not ascertained." ^ Rules 2 wnd 3. — The former law of Scotland in regard to passing the property prevents Scottish cases from being cited as direct illustrations of these rules. But there is at least a strong analogy between the circumstances which in Scotland sufficed to transfer the risTc and those which in England passed and still continue to pass both property and risk. Indeed the leading opinions in the House of Lords in Smih and Co. v. Moore ^ (1886) assume the circumstances in each case to be identical.* In this view the Scottish cases of Hansen v. Craig and Rose^ (1859), Anderson and Croin'pton v. Walls and Co.^ (1870), and Walker v. Lang- dales Chemical Co. ^ (1873) illustrate Eules 2 and 3. If the question in these cases had related to the passing of the property as well as of the risk, the judgments would have been the same in England, and would now be the same in ^ Or appropriation. See Rule 5 (1). ' Per Parke, J., in Sixony. Yates (1833), 5 B. & Ad. 813 at p. 340. " Generally where a hargain is made for the purchase of gooc(s, and nothing is said about payment or delivery, the property passes immediately, so as to cast upon the purchaser all future risk if nothing remains to be done to the goods, although he cannot take them away without paying the price." — Per Bayley, J., in Simmons v. Simft (1826), 5 B. & C. 867 at p. 862. See also Tarling v. Baxter (1827), 6 B. & C. 360 ; Gilmour v. Supple (1858), 11 Moo. P.O. 551, per Sir C. Cresswell at p. 566 ; Calcutta Co. v. De Mattos (1863), 32 L.J. Q.B. 322, per Blackburn, J., at p. 328. 3 13 Ret. H.L. 57. ^ " By the law of England the appropriation of a specific chattel by the vendor, and the agreement of the vendee to take that specific chattel and pay the stipulated price, have the effect of vesting the property of the chattel in the vendee. In Scotland, the effect of such an appropriation and accept- ance by the contracting parties is to perfect the contract of sale, and to give the purchaser a personal right to demand delivery of the specific chattel from the seller. When the contract is thus perfected the risk is transferred to the purchaser . . . hut the property of the chattel does not pass to him until he has obtained delivery under the contract." — Per Lord "Watson, 13 Bet. H.L. at p. 64. See also Lord Blackburn to the same effect at pp. 59 and 61. Lord M'Laren, in his notes to Bell's Commentaries (i. 199) founds on the opinions of the late Lord President Inglis expressed in Mansen v. Craig and Base (1859), 21 D. 432, and Black v. Imorporation of Bakers (1867), 6 Macp. 136, as authority for the statement that the risk smd jus ad rem specificam may pass with us in many cases in which, under the English rules, the general property and risk would not pass. See also notes at pp. 461 and 473, and Guthrie's notes to Bell's Prin., Sect. 87. The Lord President's views are further referred to infra, p. 92. = 21 D. 432. 6 9 Macp. 122. ' 11 Macp. 906. EFFECTS OF THE CONTRACT. 91 Scotland. Hansen's Case'^ formed a negative instance of Sect. 18. both rules, it being found that nothing was wanting either to put the goods into a deliverable state or to ascertain the price.2 Anderson's Case^ illustrates Eule 2, the question being whether the goods were made specific and put into a deliverable state by separation from the bulk ; and Walker's Case* illustrates Eule 3, it being held that the price could not be ascertained until the subject was weighed on delivery. In Black v. Incorporation of Bakers^ (1867) the circum- Black v. incor- stances were special, but the soundness of the judgment, '^^J^°^ even under the former law of Scotland, may be doubted. The goods sold were the seconds, thirds, and bran to be produced from the milling of a specified quantity of wheat in the hands of a miller, it being part of the contract that the seller should put these products into the buyer's sacks and deliver them free. The case turned upon the effect of a delivery order by the buyer in favour of a sub-buyer in operating constructive delivery so as to exclude the original seller's right of retention for a balance of the price remain- ing unpaid. It wash^ld that constructive delivery was complete, although the products had neither been actually '^' ' ' ' deEvered nor put into the purchaser's sacks, and that the if > • ■ sUb-buyer^as ffierefore "entitled to carry them off without ' - regard to the seller's claim. Such a result could not be reached under the present section. It is to be noticed — (1) No account was taken of the seller's contractual duties remaining unperformed, the law on this subject, as explained by Bell, being ignored or set aside.® (2) The order, in so 1 21 D. 432. ^ " I hold that the sale of a mass of fungibles, certain, and known by general description, but of unascertained extent, at a rate of price according to measure, weight, or number, is not a complete personal contract of sale such as will operate a transfer of the risk to the buyer until the mass have been measured, weighed, or counted, and so the price ascertained." — Per Lord Justice-Clerk Inglis, 21 D. at p. 440. 3 9 Macp. 122. ^ 11 Macp. 906. ^ 6 Macp. 136. * "Where anything remains to be done by the sellers ... in order to put the commodity sold into a deliverable state, the transfer is not com- pleted by a delivery note given to the buyer, addressed to the keeper of the goods, with notice to the custodier, or even by a transfer in the custodier's books."— Bell's Com. i. 197. 92 SALE OF GOODS ACT 1893. Sect. 18. far as it was held to operate constructive delivery, was incon- sistent with the contract, the seller being bound under the contract to deliver to the buyer himself. It is no answer to say that this provision was in favour of the buyer alone, and might therefore be waived by him. In the circum- stances of the case, it was a provision very much in favour of the seller.^ (3) The rigid effect ascribed to an intimated delivery order, without regard to the conditions of the con- tract, seems founded oh the analogy of a transfer of incor- poreal moveables in Scotland by means of an intimated assignation,^ but it excludes the idea of the custodier's consent to hold for the buyer, which lies at the very root of constructive delivery.^ The effect given to the delivery order was as extreme in one direction as the effect denied to a similar delivery order in the Distillers Company's Case * was extreme in the other. (4) Lord President Inglis, who gave the leading opinion, assumed that, though in the opinion of the Court the property was transferred, the risk (being incapable of transfer in the same manner) remained with the seller.^ In Scots law the transfer of the risk often preceded the transfer of the property, and the result was anomalous, but to invert the order and to continue the — ^ 1 According to Lord Deas (6 Macp. at p. 143) any result which excludes constructive delivery " plainly will not do." (Why not ?) ^ The same analogy led the Court into a labyrinth of legal diflBculties in Wyper v. Harveys (1861), 23 D. 606. Bell, on the authority of Auld v. Hall and Co. (12th June 1811), F.O., says that a change of custody by notice is the undoubted law of Scotland (Bell's Com. i. 195). M'Laren in a note to this passage says, " The point appears to have been assumed though never expressly decided nor perhaps questioned." See Eadie v. MacMnlay (7th February 1815), F.C. ' An acknowledgment is now required in addition to mere intimation, Sect. 29 (3). See Com. post, p. 139. * Distillers Go. Ltd. v. Russell and Co.'s Trustee (1889), 16 Eet. 479. See note (e) supra. ^ "I need hardly say that there is no room for the distinction suggested by the Sheriff-Substitute between that portion of the goods which was in the seller's bags and that which was in the buyer's. Such circuiflstances are material in questions of perieulum where the subject of sale is undelivered in the hands of the seller or his agents . . . but where the subject of sale is in the hands of an independent third party, and a delivery order by the seller in favour of the buyer has been duly intimated to the custodier by the buyer, constructive delivery will take place whatever may be the precise condi- tion of the goods . . . even though the goods be lying in such a state that some preliminary operation is necessary to put them in a state for delivery " —6 Macp. at p. 141. EFFECTS OF THE CONTRACT. 93 seller's risk in regard to goods no longer his own, and over Sect. 18. which he had not even a lien for the unpaid price, was more anomalous still. In English law, Eules 2 and 3 are thus stated by Lord statement of Blackburn. "The intention of parties must be collected Bngiar/em- from the whole agreement, and the courts have since the todiedin beginning of this century adopted for this purpose some ^"'^^^andS. rules of construction which are perhaps a little artificial. . . . They are twofold : the first is, that where by the agreement the vendor is to do anything to the goods for the purpose of putting them into that state in which the pur- chaser is to be bound to accept them, or, as it is sometimes worded, into a deliverable state, the performance of those things shall (in the absence of circumstances indicating a contrary intention) be taken to be a condition precedent to the vesting of the property. The second is that where anything remains to be done to the goods for the purpose of ascertaining the price, as by weighing, measuring, or testing the goods, where the price is to depend on the quantity or quality of the goods ; the performance of those things, also, shall be a condition precedent to the transfer of the property, although the individual goods be ascer- tained and they are in a state in which they ought to be accepted." ^ In regard to the first of these rules (Eule 2 of this section) Lord Blackburn thinks it is founded on reason. " In general," he says, " it is for the benefit of the vendor that the property should pass ; the risk of loss is thereby transferred to the purchaser, and as the vendor may stUl retain possession of the goods, so as to retain a security for payment of the price, the transference of the property is to the vendor pure gain." ^ Having this privilege it is 1 reasonable that where by the agreement the vendor is to do/ something, it should be done before he obtains the benefit/ of the transfer. The second rule (Kule 3 of this section) Lord Blackburn thinks is " somewhat hastily adopted from the civil law." ... "As it must in general be intended that both parties shall concur in the act of weighing, when the ■^ Blackburn on Sale, p. 174. ' Ibid. p. 175. 94 SALE OF GOODS ACT 1893. Sect. 18. price is to depend upon the weight, there seems little reason why, in cases in which the specific goods are agreed upon, it should be supposed to be the intention of the parties to render the delay of that act in which the buyer is to concur, beneficial to him. Whilst the price remains unascertained the sale is clearly not for a certain sum of money, and therefore does not come within the civilian's definition of a perfect sale transferring the risk and gain of the thing sold ; but the English law does not require that the consideration for a bargain and sale should be in moneys numbered, provided it be of value." ^ Lord Blackburn, however, admits that both rules are now firmly established in English law. Eule 3 was established in Scotland before the Act,^ which is not surprising, if, as suggested, it is founded on the civU law to which the law of Scotland is closely allied.^ Rule 4.— Rule 4. — The contracts of " sale on approval " and proT™ ^^ " ®^^^ °^ return " are conditional, the condition being Sale or return, suspcnsivc of the Sale itsclf, and not merely of the passing of the property.* The condition in the contract of sale or return has been occasionally treated as resolutive,® e.g. by Lord Justice-Clerk Moncreiff in Brown v. Marr, Barclay, etc} (1880); but this case was practically overruled by Macdonald v. Western'' (1888), and there seems a strong balance of authority in favour of a suspensive rather than a resolutive sale.* But supposing the sale to be suspended ^ Blackburn on Sale, pp. 175, 176. ^ See Walker t. LangdaUs Chemical Go. (1873), 11 Macp. 906. ^ The following English cases illustrate the two rules : — Rule 2.- — Bugg v. Minett (1809), 1 East 210 ; Acraman v. Morrice (1849), 8 C.B. 449 ; Ander- son V. Moriee (1876), H. of L. 1 App. Gas. 713. Rule Z.— Sanson v. Meyer (1805), 6 East 614 ; Zagury v. Furnell (1809), 2 Camp. 240 ; Simmons v. Swift (1826), 5 B. & C. 857 ; Logan v. Le Memrier (1847), 6 Moo. P.O. 116 ; Gilmour v. Supple (1858), 11 Moo. P.C. 551 ; Tansley v. Turner (1835), 2 Scott 238 ; Cooper v. Bill (1865), 34 L.J. Ex. 161, 3 H. & C. 722. ^ Bell's Com. i. 471 (sale on approval), i. 288 (sale or return). See in illustration, Finder and Co. v. Fullarton (1889), Sh. Ct. Glasgow, Guthrie's Sel. Ca. 2nd ser. 528. The mere fact that the goods are accompanied by an in- voice bearing the words "bought of" will not exclude proof that the contract was one of "sale or return " — TVoodrow v. Patterson and Co. (1845), 7 D. 385. ^ As to resolutive condition, see ante, p. 46. 8 7 Ret. 427 at p. 433. !■ 15 Ret. 988. ^ Lord M'Laren in his notes to Bell's Com. (i. 289) favours a resolutive condition, and, founds upon adictum of Gibb, C. J., in Gibson v. Bray (1817) EFFECTS OF THE CONTRACT. 95 for a reasonable time after delivery, a person hond, fide, Seet. 18. purchasing or receiving in pledge goods held on approval, or receiving in pledge goods held by the contract of sale or return ^ may possibly be protected by Sect. 25 (2) of this Act, or, failing that section, then by Sect. 2 of the Factors Act 1889,2 extended to Scotland by. the Factors (Scot- land) Act 1890.^ It is doubtful, however, if under the Factors Act the holder of goods on approval, or on sale or return, will come imder the definition of a " mercantile agent." * English illustrations of Eule 4 will be found below.^ RvIr 5. — In many cases what is called "appropriation" Rule 5.— is simply actual or constructive delivery, but goods may be PP™?"* '°"- 1 Holt 556, and a passage in Parson on Contracts (5th ed. i. 539). Bnt the remark of the Chief Justice was dbiier, judgment being given on a different ground, ■while the authorities quoted by Parson do not bear out his text. They decide that a party holding on sale or return (or on approval) may be sued as for goods "sold and delivered" if he allow an unreasonable time to elapse before returning ; but it does not follow that there is a sale, or that the property passes by delivery, before the holder is in fault. See Bailey v. Gcmldsmtih (1790), Peake Ca. 56 ; I/eate v. Ball (1801) 2 East 116 ; Beverley V. Lincoln Gas Light Co. (1837) 6 A. & E. 829 ; Moss v. Sweet (1851) 16 Q.B. 493. See also Finder and Co. v. Fullartcm (1889), Sh. Ct. Glas., Guth. Sel. Ca. 2nd ser. 528. The view of a suspensive condition is supported by Bell (Com. L 288 ; Prin., Sect. 109) ; M. P. Brown {Sale, p. 37) ; Brodie {Com. on Stair, pp. 901, 909) ; More {Com. on Stair, p. Ixxxviii) ; Story {Sale, Sect. 249). In Mitchell v. Seys and Sons (1894), 21 Bet. 600, the case of Brown v. Marr, Barclay, etc. is treated as authoritative by the Lord Ordinary (at p. 604) and is distinguished by Lord Kinnear (at p. 613) ; but no light is thrown on the principles by which it is supposed to be governed. The phrase "sale and return," which is sometimes used, seems allied to the idea of a resolutive condition, and is generally employed where such a condition is suggested. ^ "Whether a retail dealer taking goods on 'sale or return' by dealing with them in some other way than by selling them may pass the property in them I am not prepared to determine. I do not think the recipient can be said to have got them on a contract of ' pawn or Tetum.' " — Per Lord Young in Macdonald v. Western (1888), 15 Ret. 988 at p. 990. 2 52 & 53 Vict. c. 45. Text in Appendix I. post, p. 296. * 53 & 54 Vict. c. 40. Text in Appendix I. post, p. 302. These statutes are specially referred to in the interpretation clause of this Act, Sect. 62 (1). 4 52 & 53 Vict. c. 45, Sect. 1 (1). See Wood v. BmccUffe (1846), 6 Hare 183 ; Laml v. Atteiiborouyh (1862), 1 B. & S. 831 ; Haynmn v. Flewker (1863), 13 C.B. N.S. 519; CoUt. NoHh- Western Bank (1875), L.R. 10 C.P. 354; Eastings v. Pearson (1893), 1 Q.B. 62. 5 Bailey v. Goaldsmith (1790), Peake Ca. 56 ; Neate v. Ball (1801), 2 East 116 ; Humphries v. Carvalho (1812), 16 East 45 ; Parker v. Palmer (1821), 4 B & Aid. 387 ; Swain v. Shepherd (1832), 1 M. & Bob. 223 ; Beverley v. Lincoln Gas LigU Co. (1837), 6 A. & E. 829 ; Moss v. Sweet (1851), 16 Q.B. 493 ; TmoU v. White (1870), 6 Ch. 397 ; AfiFd. H. of L. 21 W.R. 465 ; Ex parte Wingjield (1879), 10 Ch. D. 591 ; Pay v. Barker (1879), 4 Ex. D. 279 ; Mphick V. Barnes (1880), 5 C.P.D. 321. 96 SALE OF GOODS ACT 1893. Sect. 18. Shipbuilding contracts. Duruxmson's Creditors. appropriated without being delivered. If, for example, an order is given for the manufacture of an article, and the manufacturer makes two of the same kind, the executory contract may be changed into a bargain and sale by selec- tion on the part of the buyer without actual delivery to him.'^ " The very appropriation of the chattel is equivalent to delivery by the vendor, and the assent of the vendee to take the specific chattel and to pay the price is equivalent to his accepting possession." ^ The apparent exception to Eule 2 in the case of a ship- building contract is explained in England on the theory of appropriation.^ The same result was reached in Scotland in 1786 in Simpson v. Buncanson's Creditors,^ which for nearly a century was looked upon as an authoritative and leading case.^ Several English writers go the length of suggesting that this case lay at the foundation of the English rule,^ and it must at least be admitted that its date was long anterior to the settlement of the question in Eng- land. The English writers referred to, assume that Simpson's Case was founded on " appropriation," as in the correspond- ing English decisions. This certainly derives some colour from the expressed opinions of the judges so far as ^ "A tradesman often finishes goods which he is making in pursuance of an order given by one person and sells them to another. If the first customer has other goods made for him within the stipulated time he has no right to complain." — Per Heath, J., in MucMow v. Mangles (1803), 1 Taunt. 318 at p. 320. But it would be otherwise if the goods were appropriated. ^ Per Park, J. (Lord Wensleydale), in Dixon v. Vates (1833), 5 B. & Ad. 313 at p. 340. ' The foundation of the decision in Woods v. Russell (1 822), 5 B. & Aid. 942 " was that as, by the contract, given portions of the price were to be paid according to the progress of the work, by the payment of those portions of the price the ship was irrevocably appropriated to the person paying the money." —Per Bayley, J., in Atkinson v. Bell (1828), 8 B. & C. 277 at p. 282. This view was approved in Clarice v. Spence (1836), 4 A. & E. 448, and was held by the House of Lords as settled in Sealh and Co. v. Moore (1886), 13 Ket. H.L. 57. * Mor. 14204. The report in Morrison is meagre, but is supplemented to some extent by Bell (Com. i. 189) and by Lord Hailes (Decisions, p. 1000). ^ It is so spoken of by Lord Justice-Clerk Moncreiff in M'Bain v. Wallace amd Co. (1887), 8 Ret. 360 at p. 368. j ^ 'Wilkinson's Law of Shipping (1843), p. 30, note ; Abbott on Shipping, 7th ed. p. 3 ; Foard on Merchant Shipping (1880), p. 158. Lord Justice- Clerk Moncreiff (8 Ret. at p. 368) erroneously attributes the statement in Abbott to the author himself (Lord Tenterden). The real author is Serjeant Shee, the editor of the seventh edition, which appeared in 1844. EFFECTS OF THE CONTRACT. 97 reported, although such a principle seems inconsistent Sect. 18. with the primary maxims of the law of Scotland before this Act. It was argued by the party standing in the posi- tion of purchaser that the shipbuilder was from the first a mere mandatory employed to perform certain work and to furnish materials, and that he consequently never had any right of property in the thing called a ship. The materials in this view became the purchaser's, specificatione, from the moment of their being applied to the vessel.'' So far as can be gathered from the imperfect reports, only one out of seven judges who expressed an opinion, held this view. Three judges seem to have treated the passing of the property as matter of contract (intention ?), thus anticipating by a century the assimilation with English law which has now taken place. Two of these, according to the report of Bell,^ came even nearer to the principles of English law by holding that in terms of the contract there was an " appropriation " of the vessel to the employer when the first instalment of the price was due.^ The case of M'Bain V. Wallace and Co.^ (1881) was decided by the Court of Session on the authority of ^mpson's Case, but, in the House of Lords, the authority of the old case was doubted, and the decision was rested entirely on the special provisions of the Mercantile Law Amendment Act of 1856. ' Session papers as quoted by Brodie (Gom. on Stair, p. 900). 2 Bell's Gmn. i. 189, note. " Mr. Bell has a report of his own, but whence derived he has not been pleased to inform us " (Brodie's Com. on Stair, p. 904, note). In one respect, at least, Bell is inaccurate. In referring to Lord Brax- field, he calls him Lord Justice-Clerk M'Queen, whereas M'Queen did not succeed to the office till 1788. Brodie thus apologises for the great length of his criticism of this case : " Legal principles have, iii my opinion, been so much violated in it, and it has led Mr. Bell to lay down on the subject what appears to me such erroneous law, that I cannot dismiss it without satisfying myself that I have cleared up every difficulty (Com. on Stair, p. 903, note). Brodie's view of Simpson'a Case seems to have been adopted by the House of Lords in M'Bain v. Wallace and Co. (1881), 8 Ret. H.L. 106. See opinion of Lord Chancellor Selborne at p. 109, and of Lord Watson at p. 116. ' Seven judges appear to have taken part in the discussion. Lord Presi- dent Dundas and Lords Braxfield and Eskgrove founded on contract, and Lord Monboddo on " specification." Lord Elliook discarded legal principle and rested his opinion on "justice and common sense." Lord Henderland doubted if the property were transferred at all, and Lord Stonefield entered an unqualified dissent from the judgment. 4 8 Ret. 360 ; Aflfd. 8 Ret. H.L. 106. H 98 SALE OF GOODS ACT 1893. Sect. 18. The English law as now embodied in Eule 5, is illustrated by the cases in the footnote.^ Ebseevation of right of disposal. Sect. 19. i9_ — ^i_^ Where there is a contract for the sale of specific goods ^"^ or where goods are subsequently appropriated to the contract,^^ the seller may, by the terms of the contract ^"^ or appropriation, reserve the right of disposal of the goods until certain conditions ^''^ are fulfilled. In such case, notwithstanding the delivery ^'^ of the goods to the buyer, or to a carrier or other bailee or custodier ^•'^ for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions im- posed by the seller are fulfilled. (2.) Where 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 primfi, facie ^^^ deemed to reserve the right of disposal.'''^ (3.) Where the seller of goods draws on the buyer for the price, and transmits the bill of exchange and bill of lading to the buyer together to secure accept- ance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not 1 MucMow V. Mangles (1803), 1 Taunt. 318 ; JDutton v. Solomonson (1803), 3 B. & P. 582 ; Bishop v. Orawshay (1824), 3 B. & C. 415 ; Fragam v. Long (1825), 4 B. & 0. 219 ; BoMe v. ThwaUes (1827), 6 B. & C. 388; AtUnson V. Bell (1828), 8 B. & C. 277 ; Elliott v. Pyhus (1834), 10 Bing. 512 ; Alex- ander V. Ga/rdner (l?i%5), 1 Bing. N.C. 671; Sparkes v. Marshall (1836), 2 Bing. N.C. 761 ; Bryans v. Mx (1839), 4 M. & W. 775 ; CunliffeY. Harrison (1851), 6 Ex. 903 ; Gocits v. Rose (1855), 17 C.B. 229 ; AUridge v. Johnson (1857), 7 E. & B. 885 ; Lwngton v. Higgina (1859), 4 H. & N. 402 ; Browne v. Hare (1859), 4 H. & N. 822 ; Levy v. Green (1859), 1 E. & E. 969 ; Campbell V. The Mersey Docks (1863), 14 C.B. N.S. 412 ; Tregelles v. Sewell (1863), 7 H. & N. 571 ; Calcutta Co. v. De Mattos (1863), 32 L.J. Q.B. 322 ; Goth v. Lees (1865), 3 H. & 0. 558 ; Ex parte Pearson (1868), 3 Ch. 443 ; Jenner v. Smith (1869), L.R. 4 C.P. 270 ; Borrovman y. Free (1878), 4 Q.B.D. 500 ; Stock V. Inglis (1885), 12 Q.B.D. 564, 10 App. Ca. 263. EFFECTS OF THE CONTRACT. 99 honour the bill of exchange, and if he wrongfully Sect. 19. retains the bill of lading the property in the goods does not pass to him.f'^ Notes. {a) "Specific goods." Defined Sect. 62 (1). (6) " Appropriated to the contract." See Sect. 18, Eule 5. (c) " Terms of the contract." This is a concrete instance of the general rule that the property passes in accordance with the intention of parties. See Sect. 17.^ (d) As to the nature and effect of conditions, see Com., Sect. 10 ante, p. 46. (e) " Delivery." Defined Sect. 62 (1). (/) "Bailee" in Scotland includes "custodier" [Sect. 62 (1)]. (g) " Primd facie." It is entirely matter of intention. Thus the seller may take the bill of lading to his own order, but " as agent or on behalf of the purchaser " ^ or he may indorse the bill of lading and transmit it to the buyer direct,^ or even transmit it so indorsed to his own agent.* In all these cases it has been held that the seller did not intend to reserve a right of disposal. (h) Sub-sects. (2) and (3) refer to the particular case of goods shipped to the buyer,* whereas sub-sect. (1) is general in its application. Sub-sect. (3) is in accordance with the previous law of Scotland, but is supposed to introduce a change in the law of England. See Com. infra, p. 103. Commentary. The general effect of this section is to give statutory Effect of de- sanction to conditions suspensive of the passing of the pro- s^s^peJ^"" perty.* In Scotland, before this Act, such conditions were conditions in necessarily attached to delivery, as it was only by delivery 1 See also Benjamin, p. 345. ^ Per Cotton, L. J., in MiraUta v. Imperial Ottoman Bank (1878), 3 Ex. D. at p. 172. s Wilmshurst v. Bowker (1844), 7 M. & G. 882; Key v. Cotesworth (1852), 7 Ex. 595. * Brcmme v. Sare (1859), 4 H. & N. 822. ^ For exposition and illustration of sub-sect. (2) see Benjamin, p. 845 et seq. As to the general efifeot of a bill of lading, see Com. infra, p. 101. 8 See Com., Sect. 17 ante, p. 83. lOO SALE OF GOODS ACT 1893. Sect. 19. Sub-sect. (1). Delivery as affecting reservation of jus I Previous law of Scotland. that the property in goods sold could be transferred. The importance attached to the overt act of delivery in passing the property is evidenced by many judicial utterances in Scotland. In some cases the extreme view was held that where there was a condition suspensive of the passing of the property there was, strictly speaking, no sale at all.-' But in Scots law it was the contract which constituted the sale and not the passing of the property,^ and thus devotion to one supposed principle of Scottish law led to another of at least equal authority and value, being entirely ignored. The obligations of parties in the cases supposed admittedly continued in force, so far as unperformed, and there was therefore a binding contract which could be called by no other name than a contract of sale. The first sub-section provides that, in the case of goods originally specific or subsequently appropriated, a jus dis- ponendi may be reserved by the seller so as to prevent the property passing, as it would otherwise do, at the date of the contract or the appropriation. In Scotland, as we have seen, no property passed by the mere contract or by ap- propriation without delivery, and even in England the change of possession by delivery is so important that it has been thought necessary in this sub-section to supplement the general provision by an express statement that even delivery to the buyer or to some one on his behalf will not pass the property so long as the conditions are unfulfilled. It has already been noticed that in modern Scots law conditions suspensive of the passing of the property by ^ " The eondition was that delivery should not pass the property until the price was paid. If that condition was legal it follows that there was no sale till the price was paid. . . . Smart never became proprietor and Hogarth never ceased to be proprietor, and as Smart became insolvent the contract never grew into a contract of sale." — Per Lord Justice-Clerk Moncreiff in Eogmrth v. Smart's Trustee (1882), 9 Eet. 964 at p. 968. "I decline to apply the term 'contract of sale' to such a contract." — Per Lord Young in the same case, 9 Ret. at p. 968. " I am unable to understand the idea of a condition in a contract of sale in Scotland suspensive of the property passing notwithstanding delivery — that is to say, I cannot conceive a contract of sale in Scotland followed by lond-fide delivery, yet leaving the property un- passed." — Per Lord Young in Clarke and Co. v. MilUr and Son's Trustee (1885), 12 Ket. 1035 at p. 1042. ^ " In the law of Scotland sale is only a contract for transferring, not in itself a transference." — Bell's Com. i. 458. EFFECTS OF THE CONTRACT. delivery have been freely admitted.^ Thus in Hogarth v. Smart's Trustee^ (1882), a millwright sold a thrashing machine and erected it on the buyer's farm under a verbal agreement that the machine should remain the seller's pro- perty until the buyer was able to pay the price, and that meantime the buyer should pay a reasonable yearly sum for hire.* The condition was held to suspend the passing of the property and to exclude the buyer's creditors.* The second sub-section restricts the ordinary effect of a biU of lading in, passing the property. A bill of lading both at common law and by statute is a document of title.^ " A cargo at sea," says Bowen, L. J., " while in the hands of the carrier, is necessarily incapable of physical delivery. During this period of transit and voyage the bill of lading, by the law merchant, is universally recognised as its symbol, and the endorsement and delivery of the bill of lading operates a symbolical delivery of the cargo. Property in the goods passes by such endorsement and delivery of the bUl of lading whenever it is the intention of the parties that the property should pass, just as, under similar circum- 1<"" Seel. "19. .S^^ Hogarth v. Smart' Trustee. •thv.l 's / 36. I Sub-sect. (2). Effect of bills of lading. 1 Com.,' Sect. 17 arUe, p. 83. ^ g jjgt_ 954. ^ It is interesting to note in this case the influence of English law and practice. In h, proof led before the Sheriff-Substitute of Berwickshire the pursuer (Hogarth) deponed, " I hinted that it was most likely that I would have to put my name on both mill and engine as proprietor, and he (the buyer) had no objection to that. I considered that essential, and also I had seen the same thing done by English makers on machines that had been working for some years. " In point of fact cards were affixed to both engine and mill inscribed "Andrew Hogarth, engineer, proprietor, Kelso." It is to be observed, however, that the English practice was designed to overcome the statutory reputed ownership which had no existence in Scotland. See Com., Sect. 17 ante, p. 83. * See also Murdoch and Co. Ltd. v. Greig (1889), 16 Eet. 396. But such cases of hire-purchase are within the operation of Sect. 25 (2). The subject is referred to ante, p. 83. ^ " The assignee of a bill of lading trusts to the indorsement ; the instru- ment is in its nature transferable ; in this respect, therefore, it is similar to the case of a bill of exchange. If the consignor had intended to restrain the negotiability of it he should have confined the delivery of the goods to the vendor only ; but he has made it an indorsable instrument." — Per Ashhurst, J., in Lickbarrow v. Mason (1787), 2 T.R. 63 at p. 71. But see Lord Loughborough's opinion contra in the same case (1790), 1 H.Bl. 357 at p. 359. The latter judgment was, however, reversed by the House of Lords (1793), 6 East 21. In the Factors Act 1889 [52 & 53 Vict. c. 45, Sect. 1 (4)], a bill of lading is expressly included in the expression "document of title." See also Bills of Lading Act 1855 (18 & 19 Vict. c. Ill), App. post, p. 293 ; and Com., Sect. 25 post, p. 126. SALE OF GOODS ACT 1893. Sect. 19. Law of Scot- land as to bills of lading. Amots V. Boyter, Apparent ex- ceptions to general rule. Sub-sect. (3). Law of Soot- land — Brcmdtand Co. V. Dickson. Clarke and Oo. T. Miller and Son's Trustee. stances, the property would pass by an actual delivery of the goods." ^ The law of Scotland, so far back as the middle of the eighteenth century, recognised an assignment of a " bill of loading" as operating constructive delivery,^ and at least before the end of the century it further recognised an assignment by way of indorsation.^ The case of Amots v. Boyter^ (1803) illustrates this sub-section. A seller who shipped from abroad, instead of forwarding the bill of lading to the buyer in this country, sent it to his own agent at the port of consignment, and the buyer's circumstances being suspicious, the agent was held entitled to insist upon security for the price before giving actual delivery. It has, however, been held in England that where the seller's object in taking the bill of lading to his own order was merely to guard against a threatened breach of contract by the buyer, which did not ia point of fact take place, there was no reservation of the right of disposal.^ The law of the third sub-section seems to have been established in Scotland before the passing of the Act.^ In Brandt and, Co. v. Dickson'' (1876), goods were forwarded on the evening of a Friday, and were delivered at the buyer's warehouse in his absence on the following day. The biU of exchange was posted for acceptance on the Saturday, and was received by the buyer on Monday morning. The same post brought the buyer intelligence, upon which he resolved to stop payment, and he therefore refused to accept the bill. It was held that the property had not passed. On the other hand, in Clarke and Co. v. Miller and Son's Trustee^ (1885), the property was held to i 1 In Somders v. Maclean (1883), 11 Q.B.D. 327 at p. 341. See also to the I same effect Lord Medwyn in M'Clelland v. Rodger and Co. (1842), 4 D. 646 at p. 658. 2 Buchanan and Cochram v. Swan (1764), Mor. 14208.' ^ Bogle V. Dunmore and Co. (1787), Mor. 14216, and other cases in Appendix II. iv. (1) post, p. 331. See also cases where effect was denied to a bill of lading, Appendix II. IV. (2) post, p. 333. * Mor. 14204. )= Joyce V. Swan (1864), 17 C.B. N.S. 84. See also Browne v. Bare (1859), 4 H, & N. 822. In such cases the seller is deemed to be the buyer's agent, but the question is one of fact to be determined by judge or jury — Va/n Casteel v. Booker (1848), 2 Ex. 691. ' Brodie v. Todd and Co. (20th 'May 1814), F.C. ; Carnegie and Co. v. Hutchison (1816), Hume 704 ; Hills v. Buchaman (1786), Mor. 14200 ; Affd. H.L., 3 Pat. App. 47 ; but see Colvin v. Short and Co. (1857), 19 D. 890. >■ 3 Eet. 375. » 12 Ret. 1035. EFFECTS OF THE CONTRACT. 103 have passed, and the goods were effectually claimed by the Sect. 19. buyer's general creditors. In this case there was a delay of two days in forwarding the bill for acceptance, which was explained by the circumstance that the seller's agents, through whom the sale was arranged, had, in accordance with their usual practice, advised their principals in London of the sale so that they might forward the bill direct. , Lord Justice-Clerk Moncreiff, who delivered judgment, and who had also given the leading opinion in Brandt and Co.'s Case, attempted to distinguish between the terms of the respective contracts;^ but a much sounder distinction is embodied in the following dictum of the same learned judge in Brandt and Co.'s Case — " I think the despatch of the /^ , Jl , .. goods by rail, and the sending of the invoice and bill by post, were in law contemporaneous acts." ^ But if the third sub-section is declaratory of the law of Doubts as to Scotland, it is not equally certain that it represents the or^g^andr previous law of England. The rule of the sub-section is perhaps intended to embody the result of the House of Lords judgment in Shepherd v. Harrison^ (1871), but in shepherd -v. that case the seller took the bill of lading to his own order, •^'"■™'^' and forwarded it indorsed to his own agents, by whom it was sent to the buyer along with the bill of exchange for acceptance. Great importance was attached, in that and other cases, to the fact that the indorsed bill of lading was not sent to the buyer direct.* In the Court below, in Shepherd v. Sarrison, the effect of direct trans- mission was thus stated in Cockburn, C. J. [The cases cited are] " certainly very strong indeed, and conclusive to show . . . that where the consignor sends these docu- ments" [bill of lading and biU of exchange] "direct to ^ In Brandt and Co.'s Case the words were ; " "We confirm the sale made to you . . . draft at four months from this date.'' In Clarke and Co.'s Case the words were slightly varied, thus : " "We confirm the sale made this day . . . payment by draft at three months." " 3 Ret. at p. 381. See opinion of Lord Craighill in Clarke amd Co.'s Case, 12 Bet. at p. 1044. 3 l r 5 jj l. 116. ^ Kg. by Lord Chelmsford in Shepherd v. Harrison, L.R. 5 H.L. at pp. 123, 124 ; by Mellish, L. J., in Me parte Banner (1876), 2 Ch. D. at p. 287 ; and by Cotton, L. J., in Miraiita v. Imperial Ottoman Bank (1878), 3 Ex. D. at p. 172. 104 SALE OF GOODS ACT 1893. Sect. 19. Effect of sub- seot. (3) upon previous law. the consignee that ought to lead to the inference, and properly lead to the inference, that he intended the con- signee should have at once the disposal of the property and possession of the goods consigned, leaving to him, as a matter simply of obligation under the contract, to return the bills of exchange accepted, not as a condition precedent to the property vesting, but simply as a matter of contract." ^ If this is a correct statement of the law of England prior to the Act, the third sub-section has introduced a change, and effected assimilation to the law of Scotland. The alteration seems in accordance with true principle. Why, it may be asked, should the fact that the documents have been sent to the buyer by an agent of the seller infer a legal result different from that where they have been sent by the seller to the buyer direct ? Qui facit per cdium facit per se. " I think," says Lord Westbury, " the truth of the case " {Shepherd v. Harrison) " was this, that the two documents were originally intended to be dependent the one on the other, and that they were sent together under the con- viction and in the confidence that the bill of exchange would be accepted and returned to the sender in considera- tion of the bill of lading."^ In this statement no dis- tinction is drawn between the act of a principal and that of an agent, and it is submitted that no such distinction should exist.^ Sect. 20. 20. Unless otherwise agreed/"^ the goods remain at ^f^^^lfL. the seller's risk until the property ^''^ therein is trans- FACIE PASSES i i J ^HPBo- ferred to the buyer,^°^ but when the property therein is transferred to the buyer, the goods are at the I ^ L.R. 4 Q.B. at p. 203. Messrs. Ker and Pearson-Gee strongly urge that the law of England is changed by the sub-section now under notice. See their Oominentary on the Act, pp. 140-142. 2 L.R. 5 H.L. at p. 130. See also Lord Cairns at pp. 132, 133. ' In Godts V. Rose (1855), 17 C.B. 229, the seller sent to the buyer a warehouse-keeper's acknowledgment to be exchanged for a cheque. The buyer kept the acknowledgment, and by its means obtained delivery, but he refused the cheque. It was held the property did not pass. The case is an illustration of sub-sect. (1), but the principle equally applies to sub-sect. (3). EFFECTS OF THE CONTRACT. loj buyer's risk whether delivery ^''^ has been made or Seet. 20. not. Provided that where delivery has been delayed through the fault ^^^ of either buyer or seller the goods are at the risk of the party in fault as regards any loss which might not have occurred '-^^ but for such fault.^") ■ Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee or custodier of- the goods of the other party.^^ Notes. (a) " Unless otherwise agreed." There is nothing to prevent the parties making a special bargain inconsistent with the general rule (Sect. 55). Thus the seller may agree to take the risk for a definite period irrespective of the passing of the property, ^ or the buyer may take the risk of specific goods which have still to be weighed, and the property in which has not yet passed to him.^ In the latter case the buyer must pay the price although the property has not passed. See Sect. 49 (2). (&) "Property." Defined Sect. 62 (1). (c) As to transfer of property to the buyer, see Sects. 17 and 18. {d) "Delivery." Defined Sect. 62 (1). («) "Fault." Defined Sect. 62 (1) (/) "Might not have occurred." "Might" was substituted in committee for " would," and seems more accurate. See Pothier, Vente No. 58 ; French Civil Code, 1302, 1303 ; Stair, i. 17. 15 ; M. P. Brown, p. 366. If goods perish in the hands of the seller when they ought to have been in the hands of the buyer, it may 1 As in Martimau v. KitcUng (1872), L.R. 7 Q.B. 436. ^ MartineoM v. Kitching (supra). In this case the goods were paid for / according to an approximate estimate, which would have been corrected by weighing had the goods not been consumed by fire. The same principle may ; be pushed still further. " I see no reason why a person should not agree to > buy and pay for a portion of a cargo, say of sugar in bags or corn in bulk, ■ although the actual sugar or corn to be delivered may not be ascertained ' before the ship is unloaded."— Per Lindley, L. J., in Stock v. Itiglis (1884), 12 Q.B.D. 564 at p. 577. io6 SALE OF GOODS ACT 1893. Sect. 20. be impossible to prove that they "would" not equally have perished had delivery taken place. The party in fault is liable if it is proved that, but for the fault, the loss " might " not have been sustained, and he can only free himself by proving that the loss must have been sustained in any event. It is practically a question of shifting the onus on to the party in fault. See M'Lean v. Grant (1805) ^j Story on Sale, Sect. 222. (g) Although it may not be intended that delivery should pass the property (as e.g. in the case of hire-purchase), this pro- viso seems to impose the risk of accidental destruction upon a buyer (hire-purchaser) who is in mora in taking delivery of the article. (h) Delivery is not (as formerly in Scotland) the only m:odus fransferendi dominii, and therefore the parties may respectively possess goods, the property in which has either been parted with, or has not yet been acquired.^ The same might have happened under the former law of Scotland, e.g. where the buyer had properly rejected goods but they remained in his temporary custody.^ The involuntary agency thus arising might, by agree- ment, be turned into a voluntary one, subject to the general law of principal and agent.* Commentary. lies perit domimo. Previous law of Scotland as to risk. This section is simply an expansion of the maxim res perit domino,^ but it is new to Scotland, where, as already explained, the separation of the risk from the property formed a leading feature of the law of sale.^ In the case of specific goods, the risk passed to the purchaser at the completion of the contract, while the property did not pass till delivery. In Scotland the separation of the risk from the property does not seem to have been established in the time of Stair (1693), who debates both sides of the question with an evident preference for continuing the risk with the' ^ Mor. App. Reparation 2. " See, however, the effect of Sect. 25. ' Thus the buyer of a mare warranted sound, but which died in the buyer's hands after having been unskilfully treated by him, was held barred from re- covering the price — Newlands v. Leggatt (1885), 12 D. 820. See also Bussfill V. Ferrier (1792), Hume 675. " Boss V. Taylor and Co. (1823), 2 Sh. 173. ^ See Blackburn, p. 245 ; Benjamin, p. 380. ^ Ante, p. 6. EFFECTS OF THE CONTRACT. 107 ownership/ but a uniform series of decisions, commencing Sect. 20. with HutcMson v. M Donald^ (1'744), placed the matter beyond question. The rule itself formed part of the law of Roman law as Eome,* and has been justified on the ground that, if any *° '^^ considerable time elapsed between the sale and the trans- ference, some kind of change must have occurred, and as the buyer had a right to any improvements upon the specific article sold, it was only fair that he should also be bur- dened with the risk of deterioration and loss.* Erskiae Erskine's put forward a theory strongly ' resembling the law of '^^^■ England. "The property," he says, "which continues in the seller till after delivery is but nominal, he is truly no better than the keeper of the subject for behoof of the pur- chaser." ^ But the explanation commonly accepted was Explanation that of Pothier and Bell. According to this view, risk was BeUofthr"'^ a part of the law of obligation and not of transference, principle of The seller, being debtor for the delivery of a specific subject which perished without his fault, was freed from an obliga- tion which had become impossible, while on the other hand the buyer remained bound for the price under an independ- ent and possible obligation.® This theory is not more satis- factory than the others. The obligations of contracts are Objections. mutual.' If the seller without fault is unable to implement his obligation to deliver, it may be a good reason for rescinding the contract, but it cannot be a reason for freeing one of the contractors and holding the other bound.^ The section embodies the law of England, and so far as Effect of risk is concerned, it also represents the former law of Scot- ducing assfmi- land. Eisk passed in Scotland in much the same circum- lotion of the stances as those in which both property and risk passed in England and Scotland. ^ Stair, i. 14. 7. See also Brodie's Com. on Stair, p. 857, note. ^ Elchies, Sale, No. 5. Lord Elchies adds the following note to his report — "The Lords determined the general point that Lord Stair doubts of, and found that the periculum rei venditce nondum traditce lies on the buyer." 2 Just. Inst. iii. 23. 3. ' ^ Brodie's Stair, p. 857. ^ Ersk. iii. 3. 7. He further speaks of the seller's right to retain for the price as a right of "pledge," a term which implies the English principle of lien, rather than the Scottish right of retention. 6 Pothier, rente. No. 307 ; Bell's Com. i. 180. ' "It is a rule in the law of contract that both parties are bound or neither."— Bell's Com. i. 471. ^ See Brodie's Stair, pp. 857. 858. io8 SALE OF GOODS ACT 1893. Sect. 20. Illustrations of Scottish law as to risk. Dunlop V. LwmJ)ert, England.^ Property and risk now primA facie pass together in both countries, but this is brought about, not by altering the law as to passing the risk, but by assimilatiag the law as to passing the property. The law of Scotland as to risk is illustrated by numerous cases, some of which are noted below.^ Dunlop v. Lambert ^ (1839), although an appeal to the House of Lords from Scotland, established an important principle, equally appli- cable to England, which is thus stated by Lord Chancellor Cottenham : " It is perfectly true, generally speaking, that the dehvery by the consignor to the carrier is a delivery to the consignee, and that the risk is the risk of the consignee. . . . On reference, however, to the authorities it will be found that although that is the general inference it is capable of variations. . . . Where the party undertaking to consign undertakes to deliver at a particular place the pro- perty, till it reaches that place and is delivered according to the contract, is at the risk of the person consigning * ; so although the consignor may follow the directions of the consignee, and deliver the property to be conveyed either by a particular carrier or in the ordinary course of business, still the consignor may make such a contract with the carrier as will make the carrier liable to him. There are therefore an infinite variety of circumstances which may occur in which the ordinary rule will turn out not to be ' Per Lords Blackburn and Watson in Seath and Go. v. Moore (1886), 13 Ret. H.L. 57. See Com., Sect. 18 ante, p. 90. 2 Spence v. Ormiskm (1687), Mor. 3153 ; Sutchison v. M'Donald (1744), Elohies, Sale, No. 5 ; Campbell v. Barry (1748), ElcHes, Sale, No. 7 ; Melvil V. Kolertson (1749), Mor. 10072 ; Barle v. Ogilvie (1749), Mor. 10095 ; M'Laren v. Barclay (1777), 5 Br. Sup. 506 ; Milne aind Co. v. Miller (1st Jan. 1809), F.C. ; Andrew v. Koss (6th Dec. 1810), F.C. ; Sail and Co. v. Arm- strong (1823), 2 Sh. 358 ; Dunlop v. Lambert (1837), 15 Sh. 884, 1232, Eevd. H.L. (1839), Macl. & Eob. 663 ; Meet Brothers v. Morrison (1854), 16 D. 1122 ; Hastie r. Campbell (1857), 19 D. 557 ; Sansen v. Craig and Rose (1859), 21 D. 432 ; Anderson and Grompton v. Walls and Co. (1870), 9 Macp. 122 ; Walker v. Langdales Chemical Co. (1873), 11 Macp. 906 ; Beesley and Co. v. M'Ewen (1884), 12 Ret. 384 ; JBenckell Du Buisson and Co. V. Swan and Co. (1889), 17 Ret. 252 ; Brewer and Go. v. Duncan and Go. (1892), 20 Ret. 230. See also Stair, i. 14. 7 ; i. 17. 5. ; Ersk. iii. 3. 7 ; M. P. Brown, 355 et seq. ; Bell's Com. 1. 179 et seq. ; Bell's Prin., Sects. 87 etseq. 3 Macl. & Rob. 663 ; 6 CI. & Fin. 600. * As for example in the old case of Spence v. Ormiston (1687), Mor. 3153, where the seller's risk continued during the transit, he having expressly undertaken to deliver at the buyer's shop in Edinburgh. EFFECTS OF THE CONTRACT. 109 S( Km'Z and, I iddel V. I obertson. ( the rule to regulate the parties." ^ Another Scottish case. Sect. 20. that of MelvU and lAddel v. Bohertson^ (1749), is interest- ing as illustrating at a much earlier date the precise point presented by the English case of The Calcutta, Go. v. De Mattos^ (1863), where Lord Blackburn says: "The parties may intend that the vendor shall deliver the goods to the carrier, and that when he has done so he shall have fulfilled his undertaking so that he shall not be Hable in damages for a breach of contract if the goods do not reach their destination, and yet they may intend that the whole or part of the price shall not be payable unless the goods do arrive." * In the Scottish case the goods were not lost, but only damaged, and it was held that the seller's risk being confined to the safe arrival of the goods, the buyer was bound to pay the full price. The report bears that the Court " considered the seller's undertaking the risk in this case to have meant no more than that the buyers should be free of the risk, and not be liable unless the cargo should arrive safe." ^ Transfer of Title. 21. — (1.) Subject to the provisions of this Act,^"^ Sect. 21. where goods are sold by a person who is not the s^'"^'^ O J ir PERSON NOT owner thereof, and who does not sell them under the ^™ owneb, authority or with the consent of the owner, ^''^ the buyer acquires no better title ^°^ to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell/''> (2.) Provided also that nothing in this Act shall affect — {a.) The provisions of the Factors Acts,^^^ or any enactment enabling the apparent owner of 1 Macl. & Eob. at p. 675. ^ Mor. 10072. ^ 32 L.J. Q.B. 322. « 32 L.J. Q.B. at p. 328. ^ jj[oj,_ io073. no SALE OF GOODS ACT 1893. Sect. 21. goods to dispose of them as if he were the true owner thereof ; ^ (6.) The validity of any contract of sale under any special common law or statutory power of sale ^'^ or under the order of a court of competent jurisdiction/''^ Notes. (a) See Sects. 22 to 25 and Sect. 48 (2). (6) "Sale with the consent of the ovmer," as by an agent on behalf of bis principal, or under an agreement, express or implied, by wbicb a power of sale is given.^ " To make either a sale or pledge valid against the owner of the goods sold or pledged it must be shown that the seller or pledger had authority from the owner to sell or pledge as the case might be." ^ (c) " Acquires no better title." " At common law a person in possession of goods could not confer on another any better title to the goods than he himself had." * (d) Owner precluded from denying authority. " If the owner of the goods had so acted as to clothe the seller or pledger with apparent authority to sell or pledge, he was at common law precluded, as against those who were induced bond fide to act on the faith of that apparent authority, from denying that he had given such an authority, and the result as to them was the same as if he had really given it."* In other words, the owner is prevented by estoppel, or, in Scottish phraseology, barred per- sonali exceptione, from denying that he had given authority to sell or pledge.^ (e) Factors Jets defined Sect. 62 (1). Text in Appendix I. post, pp. 296, 302. (/) In addition to the Factors Acts, see Bills of Lading Act 1855.^ In England a statutory reputed ownership is provided 1 Gough V. Wood and Co. [1894], 1 Q.B. 713; J^orth- Western Bwrik v. Pcrynter, Son, and Macdonalds (1894), 21 Eet. 513, Eevd. H.L. 32 S.L.E. 245. " Per Blackburn, J., in Cole v. North- Western Bank (1875), L.R. 10 C.P. 354 at p. 362. » Ibid. ^ Ibid. See Woodley v. Coventry (1863), 2 H. & C. 164 ; Natimal Merccmtile 'ank V. Mampson (1880), 5 Q.B.D. 177. 8 18 & 19 Yict. 0. 111. ' Text in Appendix I. post, p. 293. EFFECTS OF THE CONTRACT. by the Bankruptcy Act of 1883,i and statutory privileges and Sect. 21. disabilities are enacted by the Bills of Sale Act 1878.2 ( ■ i. Scottish rules goods may, as a rule, reclaim his property from an innocent ^^ ^^ gt^jgn holder, even if that holder be a bond -fide purchaser for goods. value. In England, however, the rule is subject to the exception of market overt,^ and it also differs in some of its developments from the rule as applied to Scotland. In Scotland an intermediate bond-fide purchaser is not Liability of liable to the true owner for the value of the goods by reason purchaser. merely that they have passed through his hands. If the goods are recovered by the true owner from a bond-fide purchaser, the latter may have action for repayment of the price from an equally innocent seller, but such action would be founded on an implied undertaking as to title.'^ No similar action could be maintained at the instance of the owner of the 1 46 & 47 Vict. c. 52, Sect. 44. See Com., Sect. 17 arUe, p. 83. 2 41 & 42 Vict. c. 31, Sect 4. 3 Morley v. AUenhorough (1849), 3 Ex. 500. ^ Per Cur in Morley v. Attenborough, supra. 5 London Joint Stock Bank v. Simmons [1892], App. Cas. 201 at p. 215. See also Mitchell v. Eeys and Sons (1894), 21 Ret. 600, per Lord Kinnear, at p. 610. ^ See Sects. 22 & 2i post. ^ See Sect. 12 (1). 112 SALE OF GOODS ACT 1893. SeQt. 21. goods, unless the party d,olo desiit joossidere, or unless he had made a profit, and even then, only in quantum lucratus} In England, on the other hand, the true owner who has failed to recover the goods, may claim their value from an innocent purchaser although he, in turn, has parted with them by sale or otherwise.^ One exception exists to the last-mentioned rule. If the innocent purchaser has bought in market overt, and has re-sold before the offender is prosecuted to conviction, he will retain his privilege of market overt notwithstanding the Larceny Act 1861* as amended by Sect. 24 of this Act.* Illustrations of this section from the law of Scotland will be found in Appendix II. III. (3) post, p. 32^ Sect. 22. Mabket OVBET. 22. — (1.) 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 any defect or want of title on the part of the seller. (2.) Nothing in this section shall affect the law relating to the sale of horses. (3.) The provisions of this section do not apply to Scotland. Influence of market overt upon the law of Scotland. COMMENTAEY. Market overt is confined to England and Ireland.^ The privilege, however, merits attention because of the reflex 1 Scott V. Zow (1704), Mor. 9123 ; Walker v. Spence and Carfrae (1765), Mor. 12802 ; Faulds v. Tmmsend (1861), 23 D. 437 ; M. P. Brown, p. 112 ; Bell's Com. i. 299 ; Bell's Frin., Sect. 527. ^ Benjamin, p. 7, and cases there cited. 3 24 & 25 Vict. c. 96, Sect. 100. * See Com., Sect. 2i post, p. 117. ^ The whole section was deleted by the select committee of the Commons, and the following substituted : ' ' The buyer of goods in market overt shall not acquire any better or other title thereto than if the sale had taken place not in market overt." The original section was restored in committee of the whole House, apparently on the ground that so important a change in English law endangered the passing of the bill. EFFECTS OF THE CONTRACT. 113 influence it exercises upon Scottish law. Thus in Todd Sect. 22. V. Armour'^ (1882) a horse was bought at Falkirk Tryst Toddy. from a person who, it was proved, had bought it at ™-°^'^- Armagh Fair, six days previously. The horse had been stolen from the pursuer, a farmer in Ireland, a few days before Armagh Fair, but the possessor maintained that, having been bought by his author in market overt in Ireland, and the thief not having been prosecuted to con- viction, the vitium reale attaching to it had been purged. The Court held that the onus of proving that the special procedure in connection with the sale of horses necessary by the law of England and Ireland ^ had not been followed, lay on the pursuer and had not been dis- charged. The purchaser's title was therefore held good, a result which could not have been reached had the horse been stolen in Scotland and remained there. It does not appear what the effect would have been if the horse had been stolen in Scotland, taken over to Ireland, sold there in market overt, and afterwards brought back to Scotland.^ The relaxation of the English rule where the thief has Relaxation of been prosecuted to conviction is referred to in connection °^'^ ^^^^' with Sect. 24, Com. post, p. 117. In Scotland a few early decisions seem to have given Law of special effect to sales in open market,* but the rule of Scots sales in open" law has been amply established by the cases noted in market. Appendix II. ill. (3) post, p. 32af.^ 1 9 Ret. 901. ' 2 2 & 3 Phil. & Mary, c. 7, and 31 Eliz. c. 12, the practical effect of which 18 to take horses out of the rule of market overt. ^ "I think our system of a vilium reale, which can never be removed, attaching to stolen property, is preferable to that obtaining in England and Ireland, of which indeed I consider this litigation a convincing illustration." Per Lord Justice-Clerk Moncreiff, 9 Ret. at p. 906. For an explanation of the rules of market overt in England, see Benjamin on Sale, pp. 8 et seq. ; Chitty on Contracts, 12th ed. p. 444 ; Smith's Mercantile Law, 10th ed. pp. 598 ei seq. '' E.g. Oordcm v. Menzies (1687), Mor. 9122, where conditional effect was given to a sale in public market of a stolen article. But see the still earlier case oi Hay v. MHot (1639), Mor. 6219, where a sale of corn in open market was denied effect, although the corn had not been stolen, it being subject to landlords' hypothec. See also Ersk. ii. 6. 60, and Dunlop and Go. v. E. Dalhousie (1828), 6 Sh. 626, Affd. (1830), 4 W.S. 420. " See also Ersk. iii. 1. 10 and 5. 10, and passages from Stair cited by Lord M'Laren in his notes to Bell's Com. i. 305. Bell says : "As possession pre- 114 SALE OF GOODS ACT 1893. Sect. 23. Sai,b under voidable TITLE. 23. When the seller of goods has a voidable title ^"^ thereto, but his title has not been avoided ^''^ at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith ^"^ and without notice ^''^ of the seller's defect of title. Notes. (a) "Voidable title." "Void" and "voidable" are not Scottish law terms, but they are convenient, and are now freely used in Scotland. " Void " corresponds to " null ab initio " ; "voidable" to "reducible" or capable of being set aside by reduction or rescission.^ (6) "Avoided," i.e. reduced or rescinded. (c) " Good faith," explained Sect. 62 (2). (d) " Notice " means knowledge on the part of the buyer irre- spective of any formal intimation.^ Effect of fraud, etc., on title. Commentary. This section forms a modification of Sect. 21. Invalidat- ing causes such as fraud, mistake,^ etc., do not of themselves render a contract void or prevent a legal transfer to a boTid- Jide third party. It is true that an owner of goods who has been defrauded or misled may in Scotland raise action for reduction of the contract, and in England sue in trover for sumes property in moveables, the general rule is that the purchaser of moveables at market or otherwise, in bond fide, acquires the right to them; although they may have been sold by one who is not the owner" (Bell's Oom. 1. 305). A passage from Stair is quoted as authority for this statement (Stair, iv. 40. 21), but, as pointed out by the learned editor of Bell's ComToentaries, Stair is only dealing with a title obtained by fraud, and neither he nor Erskine gives the slightest countenance to the doctrine as applied to stolen goods. See farther as to stolen goods and the efieet of sales in public market — Bell's Prin., Sects. 527, 1320 ; Bell's Com. i. 307, and M'Laren's notes ; Bell on Sale, p. 80 ; M. P. Brown on Sale, pp. 112 and 417 et seq.; and Com:, Sect. 21 ante, p. 111. ^ "An agreement or other act which is void has from the beginning no legal effect at all, save in so far as any party to it incurs penal consequences. ... A voidable act, on the contrary, tekes its full and proper legal effect, unless and until it is disputed and set aside by some person entitled so to do." — Pollock on Gonirad, 6th ed. p. 8. " See Note (i). Sect. 26:post, p. 121. 2 The common-law effect of these is reserved by Sect. 61 (2). EFFECTS OF THE CONTRACT. 115 the goods,^ aud that in either country he may, without a Seet. 23. judgment or decree of Court, repudiate and rescind the transaction,^ but unless some such step is taken before a sub-sale to an innocent person ^ the sub-buyer acquires a good title.* In other words, if before actual reduction or duly intimated rescission, the holder has sold to a hond-fide third party, the sale is good.^ But although the title may sufl&ce to give a valid deriva- P®"^!-^^^* tive right, notwithstanding it is in itself voidable, no such though effect will flow from mere possession without title, or on ^'0"^3,t)ie. some title short of ownership. " We must distinguish whether the facts show a sale to the party guilty of the fraud or a mere delivery of the goods into his possession induced by fraudulent devices on his part. ... In the former case there is a contract of sale, however fraudulent the device, and the property passes ; but not in the latter case." * The hond-fide purchaser will not be protected if the person from whom he buys has merely a " special property " ' in the goods, such as that of a carrier or lessee.^ The fact that in Scotland the property in goods sold Seller's title in 1 r. 1 T Scotland may now pass to the buyer before delivery, extends the extended, range of cases in which the title, though voidable, is not void. A person may validly sell goods, the property in which has passed to him, though they still remain in the original seller's custody, and although the original contract of sale is subject to reduction.^ On the other hand, no title 1 Benjamin, p. 412. ^ Ibid. p. 422. ^ " The rescission takes date from the time at which the deceived ]iarty announces to the opposite party his election to reject the contract." — Ben- jamin, p. 422. * "The fraud only gives a right to rescind. In the first instance the pro- perty passes in the subject-matter. An innocent purchaser from the fraudu- lent possessor may acquire an indisputable title to it, though it is voidable between the original parties." — Per Parke, B., in Stevenson v. Nevmham (1853), 13 C.B. 285 at p. 302. See also Pease v. Gloahec (1866), L.R. 1 P.O. 220 ; Oakes v. Turquand (1867), L.R. 2 H.L. 325. 5 " Where the sale has been induced by fraud, the seller is to be considered as having given his consent, but in consequence of the deceit that consent is held to be revocable to the effect of grounding an action for reduction and restitution, which, though not available against purchasers londfide, is good against the buyer and his general creditors." — Bell's Com. i. 261. See also M. P. Brown on Sale, pp. 396, 416. " Benjamin, p. 412. ' See ante, p. 5. 8 See note on this subject by M'Laren, Bell's Com. i. 261. ' The rights given by this section and those flowing from Sect. 25 (2) re- ii6 SALE OF GOODS ACT 1893. Sect. 23. is acquired even after delivery, if there is a condition of the Effect of sus- sale suspending the passing of the property. This was the tTon^upo^ntrtle. ground of judgment in such cases as Murdoch and Co. Ltd. V. Greig^ (1889), but all these are now subject to Sect. 25 (2) of this Act, and to the provisions of the Factors Act 1889.2 Effect of A purchaser in good faith and for value is not affected upon7e^iie?s ^7 *^^ Seller's constructive fraud under the bankruptcy Acts, title. so long as the insolvent seller is not divested of his estates by sequestration,^ and even after sequestration, a hond-fide purchaser in possession is not obliged to restore, if he acted in ignorance of the sequestration, and has paid or is ready to pay the price.* Sect. 24. 24. — (1.) Where goods have been stolen and the mOTERTY'iN^ offender is prosecuted to conviction, the property oN°ooNvioTioii ^^ ^^® goods so stolen revests in the person who OF OFFENDER, ^g^g ^^ owncT of thc goods, or his personal repre- sentative, notwithstanding any intermediate deal- ing with them, whether by sale in market overt or otherwise. (2.) Notwithstanding any enactment to the con- trary, where goods have been obtained by fraud or other wrongful means not amounting to larceny, the property in such goods shall not revest in the person semble each other, but in the latter case there must have been delivery, while under the present section the property may have passed under a voidable title so as to validate a second sale, although the first buyer never obtained possession. ^ 3 Ret. 396. Brovm v. Marr, Barclay, etc. (1880), 7 Ret. 427, was an exception, but it was jiractically overruled by Macdonald v. Western (1888), 15 Ret, 988. 2 52 & 53 Vict. c. 45, Sect. 2. Sect. 9 of the Factors Act is practi- cally the same as Sect. 25 (2) of this Act. The Factors Act was extended to Scotland by the Factors (Scotland) Act 1890 (53 & 54 Vict. c. 40). See text of Acts, Appendix I. post, pp. 296, 302. ' Bankton, i. 10. 78 ; Bell's Com. ii. 179. Goudy on Bankruptcy, p. 48. ^ Bankruptcy Act 1856 (19 & 20 Vict. c. 79), Sect. 111. EFFECTS OF THE CONTRACT. 117 who was the owner of the goods, or his personal Sect. 24. representative, by reason only of the conviction of the offender. (3.) The provisions of this section do not apply to Scotland. COMMENTAEY. These provisions are supplementary to Sect. 22 relating Sub-sect. (i). to market overt. The special privilege which in England Restriction and Ireland pertains to market overt is restricted by the privilege of rule of the first sub-section, which even in its statutory "'^^'^e' °"'^'^^- form is as old as 21 Hen. VIII. c. 11 (1529).^ But the exception to the privilege does not go the length of sub- jecting an innocent purchaser to the full responsibility of the English common-law rule as to stolen property. If he has bought in market overt, and has in turn parted with the goods before the offender is prosecuted to conviction, he will not be liable to the true owner. The property revests in the owner in the event mentioned, but in the meantime it had vested in the innocent purchaser. The owner had been divested and had no right of property in the goods between the date of the purchase in market overt and the conviction of the offender. In the circumstances supposed, the result is the same as under the Scottish com- Compared mon-law rule to which reference has been already made.^ )"*'^ ^''°*'' In Scotland the true owner is never divested, yet he has no claim against an intermediate hond-ficle holder. His 1 The object seems to be to furnish an incentive to the private prosecution of crimTiSTs in the absence, or the imperfect operation, of public prosecution. Aff own6r"whosB goods haTS-beenistwlBn, and who has spent' time arid money in endeavours to recover them, cannot be expected to add to his loss and to subject himself to trouble and risk by voluntarily undertaking the prosecu- tion of the thief. But to induce him to do so the law promises that in the event of success he may recover his property even from an innocent purchaser in market overt. In Scotland, where there is no privilege of market overt, the true owner can recover unconditionally. The system of public prosecu- tion is so complete that it is unnecessary to impose any duty of prosecution upon private individuals, and criminal prosecutions by private persons are practically unknown. 2 Aihte, p. 111. ii8 SALE OF GOODS ACT 1893. Sect. 24. Sub-seot. (2). Amendment of Larceny Act, Bentley v. Vil- mont. only claim is against the goods themselves, which are sub- ject to a vitium reale and can be revindicated wherever met with. The object of the second sub-section was to correct the Larceny Act^ (1861) in so far as it extended the process of revesting to cases where the owner was not divested by market overt, but had parted with the goods in virtue of some title, not void, but only voidable. The term " larceny " was wide enough to cover those cases which, but for market overt, would have left the owner undivested, but the Larceny Act extended the effect of larceny to other offences, such as fraud and extortion, which at common law did not infer nullity of title, and which therefore gave no right to the former owner to recover the goods from a hond-fide holder for value.^ It follows that if the former owner was divested by other means than market overt, he should not have been revested by a process which was intended to form an ex- ception to market overt. This effect of the Larceny Act was brought out in Bentley v. Vilmont^ (1887), where an innocent purchaser bought goods in market overt without notice of any ir- regularity, but when the sellers to him were prosecuted to conviction for having induced the owner by fraud to part with the goods under a voluntary contract of sale, he was compelled to make restitution. In delivering judgment in the House of Lords Lord Watson said : " I have great diffi- culty in supposing that the Legislature, as an incentive to the prosecution of crime, deliberately intended in the case where the property had been passed by the act of the original owner, to deprive the honest purchaser both of his goods and of his money ; but I have been unable to put a reasonable ' 24 & 25 Vict. 0. 96, Sect. 100, re-enacting and adding to 7 & 8 Geo. IV. c. 29, Sect. 57. ^ The words of the Larceny Act (Sect. 100) are, " If any person guilty of any such felony or misdemeanour as is mentioned in this Act, in stealing, takiuig, obtaining, extorting, embezzling, converting, or disposing of, or in knowingly receiving any chattel, money, valuable security, or other property whatsoever, shall be indicted for such oifence, by or on behalf of the owner of the property or his executor or administrator, and convicted thereof, in such case the property shall be restored to the owner or his representative." ' 12 App. Ca. 471. EFFECTS OF THE CONTRACT. 119 construction upon the language of Sect. 100, which will Sect. 24. avoid that inequitable result.'' The section does not apply to Scotland, there being no Sub-sect. (3). ■- - - Scotland excluded. privilege of market overt in Scots law.^ " Scotland 25. — (1.) Where a person having sold goods con- Sect. 25. tinues or is^"^ in possession of the goods, or of the buteTi^ documents of title to the goods,^'^ the delivery or possession ' •' AFTER SALE. transfer ^"^ by that person, or by a mercantile agent ^^'^ acting for him, of the goods or documents of title ^''^ under any sale,^'^ pledge, ^•^^ or other disposition^"^ thereof, to any person receiving the same in good faith (''^ and without notice® of the previous sale, shall have the same effect as if the person making the delivery or transfer ^''^ were expressly authorised by the owner of the goods to make the same. (2.) Where a person having bought or agreed to buy^^^ goods obtains, with the consent of the seller, possession ^*^ of the goods or the documents of title ^^ to the goods, the delivery or transfer ^"^ by that person, or by a mercantile agent ^''^ acting for him, of the goods or documents of title, ^""^ under any sale,^'^ pledge,^^ or other disposition ^"^ thereof, to any person receiving the same in good faith ^''^ and without notice ® of any lien or other right ^"^ of the original seller in respect of the goods, shall have the same eflFect as if the person making the delivery or trans- ' 12 App. Ca. at p. 477. Doubt has been thrown upon the efficacy of the present section to carry out its manifest intention (Law Times, 12th May I 1894), but it was held sufficient in Goldman v. Koenig before the County of 1 London Quarter Sessions, 9th August 1894, and see Payne v. Wilson, 2lst ' January 1895, Q.B.D. 11 Times Law Eep. 179. 2 See Com., Sect. 22 ante, p. 111. SALE OF GOODS ACT 1893. Sect. 25. fer ^°^ were a mercantile agent '•^ in possession of the goods or documents of title with the consent of the owner. (3.) In this section the term " mercantile agent "^'*' has the same meaning as in the Factors Acts.^"^ Notes. (a) " Oontinues or is." The alternative suggested by these words may refer to goods appropriated to the contract after its date, or to goods sold while in the hands of a third party, and subsequently taken possession of by the seller. (b) " ' Document of title to goods ' has the same meaning as it has in the Factors Acts." Sect. 62 (1). (c) "Delivery or transfer." Delivery is defined Sect. 62 (1). The section makes delivery or transfer of the goods or docu- ments of title essential, and therefore the transaction must be executed, not merely executory. In this respect the provision differs from the similar enactment in the now repealed Factors Act of 1877.1 (d) " Mercantile agent." The use in this section of the term "mercantile agent " creates a difficulty. Sects. 8 & 9 of the Factors Act 1889^ (which are reproduced almost mrlatim in the present section) are quite distinct from the other sections of the Factors Act, and contemplate a transaction with a principal ^ as well as with an agent. The express mention here of a mercantile agent suggests that a principal cannot employ an ordinary agent to do what he can validly do himself, and that the act of such an agent will not carry the same consequences as the act of a principal.* This is contrary to the maxim quifacit •per aliwm facit per se, and it is difficult to see any good reason for the restriction. (e) "Sale." Defined Sect. 62 (1). See also Sect. 1. The efiect of a sale under this section differs from that under Sect. 48 (2). See note {d), Sect. 48 post, p. 230. ' 40 & 41 Vict. c. 39, Sect. 3. See judgment of North, J., in Nicholson v. Harper [1895], 11 Times Law Rep. 435. « 52 & 53 vict. 0. 45. 3 As in Lee v. Butler [1893], 2 Q.B. 318 ; Helby v. Matthews [1894], 2 Q.B. 262, Kev. H.L. [1895], 11 Times Law Rep. 446 ; Payne v. Wilson [1895], Q.B. Div. 11 Times Law Eep. 179. * See Eastings, Ltd. v. Pearson [1893], 1 Q.B. 62, but this judgment was under Sects. 1 & 2 of the Factors Act, not under Sects. 8 & 9. EFFECTS OF THE CONTRACT. 121 (/) ''Pledge" is excluded from the general scope of tte Act Sect. 25. [Sect. 61 (4)], but this section and Sect. 47 are exceptions. See Com. infra, p. 276. {g) " Other disposition." The Factors Act 1889 differed from the previous Factors Acts which it consolidated and amended by permitting a " mercantile agent " in possession to barter for other goods or documents. 1 This Act does not apply expressly to exchange or barter,^ but the phrase " other disposition " is wide enough to cover such a disposal of the goods. The words "other disposition" also occur in Sect. 9 of the Factors Act 1889, and have been recently held to include a delivery of goods to an auctioneer for the purpose of sale.^ (A) " Good faith." Explained Sect. 62 (2). (i) " Notice " means knowledge, however acquired, and is not \ confined to express notice.* {]) " Bought or agreed to buy." The words "agreed to buy" refer to an executory sale in which no property has passed to the buyer,^ although he may have obtained possession with the seller's consent. The provision will cover a case of hire-purchase. The fii-st sub-section does not employ a similar phrase in relation to the seller. The words are not " sold or agreed to sell," but simply " sold," the reason being that no difiiculty can arise with third parties in regard to goods still possessed by the seller, where no property in them has passed to the buyer. {h) "Possession." This Act does not define "possession," but a definition is given in the Factors Act 1889, Sect. 1 (2). {I) " Goods or documents of title." The Factors Acts previous to that of 1889 did not refer to the goods themselves, but only to the documents of title representing the goods. (m) "Transfer of documents of title." See Sect. 47, which validates a transfer for valuable consideration to a bond-fide sub- buyer or pledgee, as against the seller's lien or right of stoppage in transitu. In the case of pledge, Sect. 47 does not take away the seller's lien or right of stoppage in transitu, except in so far as such lien or stoppage conflicts with the rights of the pledgee. In other words, the seller is entitled to any surplus after satisfying the pledge. The same result was no doubt intended by the present section. The Factors Act 1889, from which it is copied, pro- vides by another section,^ not expressly incorporated with this 1 52 & 53 Vict. c. 45, Sect. 5. ^ See Com., Sect. 8 atUe, p. 39. 3 Shenstone v. Hilton [1894], 2 Q.B. 452. * See May v. Chapman (1847), 16 M. & W. 355, per Parke, B., at p. 361 ; E. of Sheffield v. London Joint Stock Bank (1888), 13 App. Ca. 333, per Lord Bramwell at p. 346. ^ See Sect. 1. 8 52 & 53 Viet. c. 45, Sect. 12 (2). SALE OF GOODS ACT 1893. Sect. 25. Act, that the owner can redeem pledged goods and recover any balance of money ; but even if this provision is not to be read into the present Act, it is submitted that the same effect will follow at common law. The seller still possesses a right of ownership or " lien or other right," except so far as such right is taken away by the section, and in virtue of such right he is entitled to redeem the pledge, or to recover the surplus produce of a sale. (m) " Lien or other right." The sub-section is based upon the buyer's possession of the goods or documents of title. If the buyer has the goods the seller's right of lien is gone, but if the seller has merely transferred the documents of title the lien still exists, subject to the provisions of this sub-section and of Sect. 47. The " other right " here referred to cannot, in the case of the goods them- selves, be stoppage m transitu, because the buyer's possession involves the termination of the transit, but (as in the case of lien) it may refer to stoppage in transitu in connection with the documents of title. Or the "other right" may refer to the seller's continued ownership where the property has not passed, or to some special contract under which the seller is to resume possession. Probably it would also cover the case of a buyer's title voidable at the instance of the seller, but this case is specially provided for under Sect. 23. Lien in Scotland is defined to include right of retention [Sect. 62 (1)], but see Com., Sect. 39 post, p. 186. (0) " 'Factors Acts' mean the Factors Act 1889,i the Factors (Scotland) Act 1890,^ and any enactment amending or substi- tuted for the same" [Sect. 62 (1)]. The text of the Acts will be found in Appendix I. post, pp. 296, 302. Commentary. Reproduction The first sub-section reproduces Sect. 8 of the Factors Faotors°Aot Act 1889,^ but omitting the words " or under any ment for sale, pledge, or other disposition thereof." The second sub-section reproduces Sect. 9 of the same Act with a similar omission. The sections of the Factors Act are not repealed, but it is suggested by the draftsman of this Act that they may be repealed by a Statute Law Eevision Act.* 1 52 & 53 Vict. 0. 45. 2 53 & 54 Yiat c. 40. 3 52 & 53 Vict. c. 45. ' Chalmers on Sale of Goods Act, p. 55. EFFECTS OF THE CONTRACT. 123 In reference to the suggested repeal it is to be observed Sect. 25. that a contract of sale includes an agreement to transfer as Suggested well as an actual transfer [Sect. 1], but there is no similar reproduced provision regarding "pledge or other disposition." The sections. general provisions of this Act do not apply to pledge [Sect, contract of 61 (4)] nor to any disposition other than that of sale.'^ On pledge. the other hand, a valid pledge cannot be constituted without actual possession of the goods or documents of title,^ so that an agreement to pledge would be of no value. Sect. 4 of the Factors Act, providing that a pledge for Pledge for an antecedent debt gives no further right than that of the ^ebt!^*^*"* pledgor, is not incorporated with this Act, but the provision is absolute in its terms, and seems to control this section without special incorporation.^ The sections here reproduced first appeared in the Anomaly Factors Act of 1877.* Sect. 4 of that Act remedied a Factors" Ac'ts singular anomaly resulting from the previous Acts which is now corrected, thus described by Benjamin. " If a merchant buying goods and paying the price received a transfer of the dock warrant, he would be safe if his vendor was not owner but only agent of the assignor of the warrant, and would not be safe if the vendor was owner, because the price might remain unpaid to the assignor of the warrant. . . . The original owner was held by the [older] statute to have abandoned his actual possession by giving the document of title to his agent, although he retained ownership and right of possession ; he was held by the Courts to have retained his actual possession when he gave the document to a pur- ' The law of pledge in England and Scotland does not always run on the same lines. Thus in England, mere custody of deeds or documents represent- ing real or personal estate, implies the custody of the property itself and con- stitutes an effectual pledge. In Scotland there is no vesting by mere custody of writs without formal disposition or completed assignation. In illustration of the English law of equitable mortgage or pledge, see Brocklesby v. Tlie Temperance Fermanent Building Society and Others (1895), H.L. 11 Times Law Rep. 297. ^ See North- Western Bank, Ltd. v. Poynter, Son, and Macdonalds (1894), 21 Ret. 513, Rev. H.L. 32 S.L.R. 245. ' A similar provision in the now repealed Factors Act of 1842 (5 & 6 Vict. c. 39, Sect. 3) was founded on and sustained in Martinez y Oomez v. Allison (1890), 17 Ret. 332. * 40 & 41 Vict. c. 39, Sects. 3 & 4. 124 SALE OF GOODS ACT 1893. Sect. 25. Goods them- selves may now be dealt with. Sale must now he executed. Statutory reputed ownership in seller and buyer. Does not extend to creditors. chaser, although he had abandoned loth ownership and right of possession." '^ The Factors Act 1889 differed from the Acts which it amended and consolidated by including^dealings with the goods themselves as well as with the documents of title to goods,^ hence its effect upon the contract of hire-purchase to which reference is made in connection with Sect. 17.^ It also differed from the Factors Act of 1877 by introduc- ing into what have been called the " sale sections " * the words " delivery or transfer," which confined the operation of the sections to " executed " contracts of sale.^ The effect of the first sub-section is to create a statutory reputed ownership in the seller where he retains possession but the property has passed to the buyer. In like manner the second sub-section creates a statutory reputed owner- ship in the buyer where, notwithstanding delivery, the passing of the property to him is suspended. The latter sub-section affects conditions suspensive of the passing of the property, e.g. hire-purchase,^ at least in all cases where the buyer or hirer does not reserve an absolute right to return the goods on payment only of the arrears of instal- ments due.''' The reputed ownership here enacted only benefits in- dividuals transacting with the seller or buyer on the faith of their possession ; it cannot be founded on by the general creditors of the party holding the goods. As suggested in an earlier part of this work,' it is for consideration whether, in view of the change introduced by this Act in the mode of passing the property, some provision similar to the English statutory reputed ownership should not be intro- duced into Scotland. ^ Benjamin, p. 831. ^ Compare with the present section the repealed Factors Act of 1877 (40 & 41 Vict. 0. 39), Sects. 3 & 4. » Ante, p. 83. * Sects. 8 & 9 of Factors Act 1889. Compare with Sects. 3 & 4 of Act of 1877. * See note (c), supra. " Lee T. Butler [1893], 2 Q.3. 318 ; Strohmenger v. Attenborough [1894], 11 Times Law Rep. 7 ; Payne v. Wilson [1895], 11 Times Law Rep. 179. See Com., Sect. 17 ante, p. 83. ' Helby v. Matthews and Others [1895], H.L, 11 Times Law Rep. 446. ^ Com., Sect. 17 amte, p. 83. EFFECTS OF THE CONTRACT. 125 The definition of " document of title," imported from the Sect. 25. Factors Act, has greatly widened the effect given by the Effect of de- common law to delivery orders and other similar documents, a^i^cumentg The question whether they are transferable by simple in- of title. dorsation, and whether the goods themselves also pass by this means, is set at rest by the express provision that " ' document of title ' shall include any bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise either hy endorsement or hy delivery the possessor of the document to transfer or receive goods thereby represented." ^ The history of this question exhibits great reluctance on Development the parts of the Courts both of England and Scotland to "ft^eiaw. recognise delivery orders as passing the property by mere indorsation. In Scotland intimation to the custodier has been deemed necessary, and in England an acknowledgment by the custodier that he holds for the transferee has also been required.^ The progress of legislation on the subject suggests an undercurrent of conflict between the legislature and an unwilling judicatory, resembling the historical con- test regarding promissory notes, which ended in legislative sanction being given to these documents as negotiable instruments.^ ^ The definition above quoted is precisely the same as that in the repealed Factors Act of 1842 (5 & 6 Vict. i;. 39, Sect. 4), except that the word " and " is added, so that " warehouse-keeper's certificate warrant or order" now reads "warehouse-keeper's certificate and warrant or order." The difi'erence is important, the former wording being so understood as to limit the delivery order intended by the Act to that of a warehouse-keeper, and to exclude de- livery orders by purchasers or other owners of goods. Correct Chalmers's note on this subject {Sale of Goods Act, p. 121) by substituting "wharfinger's certificate" for " warehouse - keeper's certificate." The case of Ounn v. Bolokow, Vaughan, and Co., 1875, 10 Ch. App. 491, was special, and is scarcely an authority for Chalmers's statement that " the Lords Justices held that these documents" (warehouse-keeper's certificates) "were not documents of title." See Blackburn, p. 421. ^ See Sect. 29 (3), but "documents to title" are excepted from the opera- tion of the section. Scottish cases on the subject will be found in Appendix II. IV. (I) post, p. 331. ^ The reporter of Clarice v. Martin (1702), 2 Lord Raymond 758, says : — "Holt, C. J., was with all his strength against this action [on a promissory note], and said that this note could not be a bill of exchange ; that the main- 126 SALE OF GOODS ACT 1893. Sect. 25. Privileges of bUls of lading. Dock warrantsi etc. Common-law effect of warrants and certificates still limited. i Bills of lading were privileged as documents of title at a much earlier period than any of the other documents mentioned in the definition,^ probably because of the incon- venience of being unable otherwise to deal with goods during a long period of transit and voyage.^ Dock warrants and warehouse-keeper's certificates come next in the order of recognition, these being granted by or on behalf of the person having the custody of the goods. Finally, by the present definition the privilege is extended to delivery orders granted by the owner of the goods whether he is the custodier or not.^ But apart from the Factors Acts and the definition of " document of title " incorporated with this Act, it may be doubted if the indorsement of a dock warrant, or a warehouse-keeper's certificate, or a delivery order, has as yet received any effect beyond that of a token of an " authority to receive possession." * They are certainly not " negotiable instruments " in the sense which the com- mon law attached to that phrase in connection with bills of exchange and promissory notes. Even bills of lading have taining of these actions upon such notes were innovations upon the rules of common law, and that it amounted to setting up a new sort of specialty un- known to the common law and invented in Lombard Street, which, attempted in these matters of bills of exchange to give laws to Westminster Hall ; that the continuing to declare upon these notes upon the custom of merchants proceeded from obstinacy and opinionativeuess, since he had always expressed his opinion against them." Similar strong language was used by the Chief Justice in the subsequent case of Buller v. Crispe (1703), 6 Mod. Rep. 29, but the London merchants had the ear of the legislature, and, in this case, the Court was saved the trouble of coming to a final judgment by the Act of 1704 (3 & 4 Anne c. 9). 1 See Scottish oases in Appendix II. iv. (\) post, p. 331. 2 Lickbarrow v. Mason (1793), 6 East 21 ; and see Com., Sect. 19 ante, p. 101. The preamble of the Bills of Lading Act 1855 (18 & 19 Vict. 0. Ill) recites that "by the custom of merchants a bill of lading of goods being transferable by endorsement the property in the goods may thereby pass to the endorsee." ^ The distinction between a warrant for goods (including a warehouse- keeper's certificate) and a delivery order is illustrated by the provisions of the Stamp Act 1891 (54 & 65 Vict. c. 39). Compare Sect. Ill (warrant) with Sect. 69 (delivery order). The stamp upon the former is 3d., upon the latter Id. " Endorsement does not render a delivery order liable to further duty, nor does a warrant for goods become chargeable a second time as a delivery order by reason of its being endorsed by the original owner of the goods to another person." — Griffith's Digest of Sta/mp Duties, 11th ed. p. 66. * See Blackburn on Sale, pp. 415. ilS—M'Bwen and Co. v. Smith (1849), 6 BeU's App. Ca. 340. EFFECTS OF THE CONTRACT. 127 not this effect, for the validity of a transfer depends on the Sect. 25. sufficiency of the granter's title to the goods in question, whereas bills and notes, being monetary instruments, import an unlimited personal obligation on the part of the granters and indorsers. In this view, the definition of " document of title'' given by the Factors Act 1889 will not affect constructive delivery, or defeat the seller's remedies in a question with the buyer or his creditors. Effect of WRITS OF EXEODTION. 26. — (1.) A writ of fieri facias or other writ of Sect. 26. execution against goods shall bind the property in the goods of the execution debtor as from the time when the writ is delivered to the sheriff to be executed ; and, for the better manifestation of such time, it shall be the duty of the sheriff, without fee, upon the re- ceipt of any such writ to endorse upon the back thereof the hour, day, month, and year when he received the same. Provided that no such writ shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such person had at the time when he acquired his title notice that such writ or any other writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained un- executed in the hands of the sheriff. (2.) In this section the term " sheriff" includes any officer charged with the enforcement of a writ of execution. (3.) The provisions of this section do not apply to Scotland. 128 SALE OF GOODS ACT 1893. Sect. 26. Law of England and Ireland con- trasted with Scotland. Commentary. The main enactment is a reproduction of Sect. 15 (commonly called Sect. 16) of the Statute of Frauds.^ The proviso is a re-enactment of Sect. 1 of the English Mercantile Law Amendment Act of 1856.^ Both sections are repealed by this Act.^ The Mercantile Law Commission of 1855, after compar- ing the law of England and Ireland regarding execution and seizure of goods for debt with that of Scotland, recom- mended that the laws of the United Kingdom should be assimilated on the lines of the law of Scotland.* This proposal, however, did not receive statutory sanction, and the only result was the provision here reproduced from the Mercantile Law Amendment Act of 1856. The Scottish rule was not touched by the corresponding Mercantile Law Amendment Act passed for Scotland.^ 1 29 Car. II. c. 3. M9 & 20 Vict. 0. 97. ^ Sect. 60 and Schedule. ^ The law of England and Ireland and that of Scotland are thus contrasted by the Commissioners. " In England and Ireland it is held that the execu- tion creditor of the seller is preferable to the buyer, although the sale take place before the actual seizure of the goods under the writ if, before the sale, the writ has been placed in the hands of the sheriff. This is unfair to the buyer, as until the seizure take place there is nothing to warn him that the owner of the goods has been deprived of his right to sell them ; and indeed the owner himself may often be in ignorance of this. In Scotland . . . the warrant for execution has no such effect by being merely placed in the hands of the officer who is to execute it, or until he actually proceeds to carry the execution into effect ; and if during the intermediate period there be a hond-fide sale of the goods, and the possession of them be obtained by the buyer, they caunot thereafter be attached by a creditor of the seller." — Keport, p. 8. 5 19 & 20 Vict. c. 60. PART III. PERFOEMANCE OF THE GONTEACT. 27. It is the duty of the seller to deliver ^"^ the Sect. 27. goods, and of the buyer to accept and pay ^'^ for them, ^^™s °^ in accordance with the terms of the contract of sale.^"^ butbr. Notes. (a) " ' Delivery ' means tlie voluntary transfer of possession from one person to another " [Sect. 62 (1)]. The rules as to de- livery are contained in Sect. 29.^ "Of every specific article bought, delivery may be legally enforced from the seller, and he cannot by disregarding his obligation to deliver at the particular time stipulated, retain the subject and convert the purchaser's claim into one for damages."^ In certain circumstances, how- ever, the seller will be allowed a reasonable time within which to perform his obligation.* If actual delivery is not contemplated, / the contract may be one for differences only, and therefore aj wager not enforceable at law.* (b) "To accept and pay." Acceptance is defined by Sect. 35. Such acceptance differs from that under Sect. 4 (formerly Statute of Frauds), as to. which see note (b) ante, p. 25. As acceptance is the counterpart of delivery, it is equally 1 As to the form of delivery and equivalents for actual transfer, see Com., Sect. 28 post, p. 132 et seq. ^ Per Lord Cowan in Sutherla/nd v. Montrose Shipbuilding Co. (1860), 22 D. 665 at p. 671. See Graham and Co. v. Pollock and Caldwall (1763), Mor. 14198; MaclellandY. Adam and Mathie (1795), Mor. 14247; Bell's Priji., Sect. 113 ; Benjamin, pp. 676, 677. ' Forbes v. Cam,pbell (1885), 12 Ret. 1265. As to proof of delivery, see Dunbar v. ffarvie (1820), H.L. 2 Bligh 351. ■~^mm&n'v. Hardie and Co. (1885), 12 Eet. 406. K I30 SALE OF GOODS ACT 1893. Sect. 27. subject to any special conditions of the contract, such as notice to be given by the seller of the place where delivery is to be given, or notice by the buyer of the place where the goods are to be accepted.^ If, however, the contract fixes a place of delivery in the interest of the seller alone, the buyer may be bound to accept them at another place named by the seller.^ The time of payment may be fixed with reference to the arrival of the goods, and in such case, if the buyer's obligation to pay subsists notwithstanding the loss of the goods during transit, he must pay within a reasonable time after they should have arrived in ordinary course, or after arrival has been ascertained to be impossible.^ " The chief obligation of the buyer is to pay the price according to the terms express or implied. . . . The next obligation is to take delivery of the goods if they be in the condition stipulated or implied at the time when the seller is bound to deliver." * (c) The terms of the contract apply equally to delivery, acceptance, and payment. Sect. 28. Payment and delivbrt are concubbent conditions. 28. Unless otherwise agreed/"^ delivery ^''^ of the goods and payment of the price^"^ are concurrent con- ditions,^"*^ that is to say, the seller must be ready and willing^'^ to give possession^''^^ of the goods to the buyer in exchange for the price, and the buyer must be ready and willing^"^ to pay the price^^' in exchange for possession of the goods. Notes. (a) " Unless otherwise agreed." E.g. the goods may be sold on credit, or the contract may provide a special time for delivery 1 Davies v. MacLean (1873), 21 W.E. 264. 2 mm V. TVhitworth (1865), L.R. 1 O.P. 684. 3 Fragano v. Lo ng (1825) , 4 B. & C. 219, per Bayley, J., at p. 222 ; Alex- aTOierT:i7SrS»erTTS35}7TBing. N.C. 671. * Bell's Prin., Sects. 127^ 128. See also Bell on Sale, pp. 79, 103 ; M. P. Brown, pp. 199, 343 ; Benjamin, p. 708 ; Drew v. Ogilvie, Heggie, amd Co. (1833), 11 Sh. 342. A party was held not in mora in taking delivery of a ship under a charter-party, in Carswell v. GoUard (1893), 20 Ret. H.L. 47. The same principle applies to sale. On the other hand, a buyer of oats who had delayed taking delivery for a fortnight, during which time grain had greatly increased in value, was held not entitled to demand delivery — Craig and Co. v. Hamilton (1823), 2 Sh. 347 (N.E.) 305. PERFORMANCE OF THE CONTRACT. 131 and a different time for payment. In such cases delivery and Sect. 28. payment are not concurrent conditions.^ (6) "Delivery." Defined Sect. 62 (1). As to form and equi- valents, see Com. infra, p. 132 et seq. (c) "Piice." See Sects. 8 and 9, and CoM. ante, p. 36. See also note (g) infra. (d) " Concurrent conditions " are of the nature of mutual con- ditions precedent (suspensive). " Neither party can enforce the contract against the other without showing performance." ^ (e) " Seady and willing." It is not necessary in the ordinary case for either seller or buyer to prove an actual tender.^ " Eeady and willing " when used in pleadings means that the non-comple- tion of the contract is not the fault of the plaintiff, and that he is disposed and able to complete it.* (/) "Possession" is not defined in this Act, but see Factors Act 1889,5 Sect. 1 (2). (g) " The seller is liable to deliver [the goods] whenever they are demanded upon payment of the price, but the buyer has no right to have possession of the goods till he pays the price." ^ Commentary. Sale is an exchange of goods for a price : the seller parts Concurrent with the goods but is entitled to the price, while the buyer <=°" of the goods or for the seller <*) to send them to the buyer ^''^ is a question depend- ing in each case on the contract, express or im- plied/"' between the parties. Apart from any such contract, express or implied, the place of delivery ^''^ is the seller's place of business, if he have one, and if not, his residence : Provided that, if the contract be for the sale of specific goods,^**' which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery. (2.) Where under the contract of sale ^"' the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.^'^' (3.) Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person ^'^ acknowledges to the buyer that he holds the goods on his behalf^''' ; provided that nothing in this section shall afiect the operation of the issue or transfer of any 'document of title to goods. ^*' (4.) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact. (5.) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state^^'^ must be borne by the seller. PERFORMANCE OF THE CONTRACT. 137 Notes. Sect. 29. (a) "Possession." Defined in Factors Act 1889, Sect. 1 (2). See Appendix I. post, p. 297. (b) "Seller," "buyer." Defined Sect. 62 (1). (c) "Express or implied." See Sect. 55. As to the interpre- tation of an express contract regarding delivery, see Haig v. Napier'^ (1813). An express contract as to time is often so worded as to involve questions of difficulty. The follow- , ing words (among many others) have been legally interpreted : I "directly,"^ "forthwith,"^ " as required," * " as soon as possible."* j A list of such words will be found iii Chalmers' Sale of Goods' Act, Notes, p. 176. {d) "Delivery," "specific goods." Defined Sect. 62 (1). («) " Contract of sale." See Sects. 1 and 62 (1). (/) " A reasonable time is a question of fact." Sect. 56. See Com. infra, p. 261. {g) Such as a carrier or warehouse-keeper. Qi) Acknowledgment by third party. This alters the law of Scotland. See Com., Sect. 18 ante, p. 92. («) " Document of title to goods " has the same meaning as it has in the Factors Acts [Sect. 62 (1)]. For text of the Factors Acts, see Appendix I. post, pp. 296, 302. The general effect of documents of title is referred to Com., Sect. 25 ante, p. 125. (j) " Deliverable state." See Sect. 62 (4). Commentary. The word " delivery " in this section is not used in the Meaning of sense sometimes attributed to it, as where the property has "'i«ii^'''^y- passed and the seller holds as bailee or custodier for the buyer. In English law the seller may maintain an action against the buyer for the price of " goods sold and delivered" although the goods have never left the actual custody of the seller.® This Act does not adopt the technical and » 1 Dow 255. ^ Vunmn v. Topham (1849), 8 C.B. 225. 3 Staunton v. Wood (1851), 16 Q.B. 638 ; Hoberts v. Brett (1865), 11 H.L. 337. * JoTies V. Oibbona (1853), 8 Ex. 920. = Hydrmlic JEngineering Co. v. M'Haffie (1878), 4 Q.B.D. 670. « As to the different meanings of "delivery," see Benjamin, pp. 677 and 768. 138 SALE OF GOODS ACT 1893. Sect. 29. customary title of such an action, but merely calls it an " action for the price " [Sect. 49 (1)]. See note, Sect. 62 (1) post, p. 284. Sub-sect. (1). Sub-sect. (1). — This sub-section was several times altered in committee. It deals with the mode and place of delivery, but, in regard to the mode, it lays down no rule apart from con- tract. The rule as to place is that of the German Commercial Code,^ which, however, does not materially differ from that of other countries.^ It is substantially the rule previously assumed as the law of England.* But, previous to the Act, I there does not appear to have been any definite rule in regard to goods which, in the knowledge of the parties, are in " some other place." This case is now regulated by the proviso attached to the sub-section. Sub-seot. (2). Sub-sect. (2). — "Where no time is specified for the execution of a commission, a reasonable discretion is allowed." * What is a reasonable time will depend on the circumstances.^ Thus in Philips v. Blair and Martin^ (1801) the House of Lords (reversing the Court of Session) held that where no time was fixed for dehvery, three months was unreasonable, and in Bobb v. Cruikshank'' (1840) ten days was deemed unreasonable in a cash transaction.* On the other hand, in Forbes v. Campbell \ (1885) the purchaser of a vessel was not permitted to resile from the contract merely because the seller was unable to tender a vahd title as executor of his father until a month had elapsed, and in Taylors v. Maclellans^" (1891) a contract 1 Art. 342. ^ Pothier, Verite, No., 52 ;'French Civil Code, Art. 1609 ; Benjamin, p. 684 ; Kent's Com., 12th ed. ii. 505 ; Indian Contract Act 1872, Sect. 94 ; Bell on Sale, p. 94 ; M. P. Brown on Sale, p. 209. ' "In the absence of a contrary agreement, the seller is not bound to send or convey the goods to the buyer. He does all that he is bound to do by leaving or placing the goods at the buyer's disposal, so that the latter may remove them without lawful obstruction. " — Benjamin, p. 682. * Cooper V. Green and Chatio (1791), Mor. 10100. ' It is a question of fact and not of law (see Sect. 56). « 4 Pat. App. 256. 7 2 D. 988. ^ " The word ' cash ' is very important. It subjected the buyer to prompt and instant payment, and it implied that he was entitled to immediate delivery."— Per Lord Gillies, 2 D. at p. 992. 9 12 Ret. 1065. i» 19 Ret. 10. PERFORMANCE OF THE CONTRACT. 139 to furnish ironwork as required for a buildiug, was held not Sect. 29. rescinded by delay resulting from strikes and other excep- tional causes. The principles regulating such cases " are as old as the law of contract. When a contract does not expressly, or by necessary implication, fix any time for the performance of a contractual obligation, the law implies that it shall be performed within a reasonable time. The rule is of universal application . . . and has invariably been held to mean that the party upon whom it is incumbent duly fulfils his obligation, notwithstanding protracted delay, so long as that delay is attributable to causes beyond his con- trol." ^ The seller must also be reasonable in regard to the relative duties of the buyer. Thus, where under a con- tract, goods are to be delivered " as required," the seller cannot rescind because of the buyer's delay in requiring delivery, without first giviag him reasonable notice.^ Suh-sect. (3). — The law of Scotland seems to have Sub-seot. (3). been satisfied with intimation to the custodier, without acknowledgment by him. The subject has been already referred to in another connection.^ Sub-sect. (4). — What is a reasonable hour was formerly Sub-sect. (4). matter of law ; * now it is a question of fact. Suh-sect. (5). — " The vendor is bound at his own Sub-sect. (5). ^ Per Lord Watson in Hich v. Raynumd and Reid [1893], A.C. 22 at p. 32. 2 Jones T. Gibbons (1853), 8 Ex. 920, per Pollock, C.B. at p. 922. ' Com., Sect. 18 ante, p. 92. "In the ordinary case where goods in the hands of a storekeeper are sold by the owner, and a, delivery order is given by him to the buyer, the intimation of the delivery order by the buyer to the storekeeper operates constructive delivery, and from that moment constitutes the storekeeper custodier, or holder for the buyer, just as before, he was custodier or holder for the seller." — Per Lord President Inglis in Black v. Incorporation 0/ Bakers (1861), 6 Macp. 136 at p. 141. "I have no doubt that the delivery order, with due notice to the custodier, is good constructive delivery." — Per Lord Ardmillan, 6 Macp. at p. 144. See also JEadie v. Mac- kinlay (7th February 1815), F.C. ; Laurie v. Black (1831), 10 Sh. 1 ; Connal and Co. v. iocJer (1868), 6 Macp. 1095; Bell's Com. i. 195, and M'Laren's note. As to the law of England see Wood v. Manley (1834), 11 A. & E. 34 ; SalUr V. Woolams (1841), 2 M. & G. 650 ; Wood v. Tassell (1844), 6 Q.B. 234 ; Bvddle v. Cfreen (1857), 27 L.J. Ex. 33. * Startup V. Macdonald (1843), 6 M. & Gr. 593. In this case the jury had found as a matter of fact that a tender of a quantity of oil at half-past eight o'clock on a Saturday night was unreasonable. The Court held that such a question should not have been left to the jury, but was a matter of law to be determined by the Court, and that in law the hour was reasonable. The sub-section alters this rule. I a I40 SALE OF GOODS ACT 1893. Sect. 29. expense to take the steps necessary for implementing his obligation to deliver." ^ Strange to say, there is no direct authority on this subject in the common law of England, and an American case is cited by Benjamin.^ Where the goods are to be shipped " free on board " the seller must bear the expenses of shipment.^ Where a document of title is given or tendered as delivery, it must be free from Hen or charges in favour of the custodier of the goods, and in any case, in the absence of contrary agreement, the seller is bound to free the goods from such charges and encum- brances.* Sect. 30. 30. — (1.) Where the seller delivers ^"^ to the buyer deliveet of a, quantity of goods less than he contracted to sell, QDANTiTT. the buyer may reject ^^ them, but if the buyer accepts ^°^ the goods so delivered he must pay for them at the contract rate.^'*^ (2.) Where the seller delivers ^"^ to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept ^"^ the goods included in the contract and reject ^'^ the rest, or he may reject the whole. If the buyer accepts ^"^ the whole of the goods so delivered he must pay for them at the contract rate.^*) (3.) Where the seller delivers ^"^ to the buyer the goods he contracted to sell mixed with goods of a different description ^^^ not included in the contract, the buyer may accept ^"^ the goods which are in accord- ■ M. p. Brown on Sale, p. 200. See also Bell on ScUe, p. 79 ; Story on Sale, Sect. 297a ; French Civil Code, Art. 1608. The illustrations of the law of Scotland, cited by M. P. Brown, relate exclusively to heritage. y 2 CoU V. Kew (1848), 20 Verm. 21.— Benjamin, p. 707. But see Playford h. Mercer (1870), 22 L.T. N.S. 41. » Stock V. Inglis (1884), 12 Q.B.D. 564, per Brett, M.R., at p. 573 ; Affd. (1885), 10 App. Ca. 263. * Sect. 12 (3). See Playford v. Mercer (1870), 22 L.T. N.S. 41. PERFORMANCE OF THE CONTRACT. 141 ance with the contract and reject ^^ the rest, or he may Sect. 30. reject the whole. (4.) The provisions of this section are subject to any usage of trade, special agreement, or course of dealing between the parties. ^■''^ Notes. (a) "Delivery." Defined Sect. 62 (1), "The seller does not comply with his contract by the tender or delivery of either more or less than the exact quantity contracted for, or by send- ing the goods sold mixed with other goods." ^ (b) Bejecdon of goods. See Sect. 11 (1) and (2). It has been held that where the seller's obligation was to deliver "on or before " a certain date, and the buyCT's to j)ay on the completion .- of the_de]ivery, a partial delivery before the date specified did / 4 not necessarily involve acceptance of the part by the buyer so as to preclude him afterwards rejecting on the ground that the remainder of the seller's obligation had not been implemented.^ A contrary rule was laid down in a more recent case,^ and the latter rule seems embodied in the closing words of Sub-sect. (1) (See Com. infra, p. 144). A testing of the goods, though made for the purpose of ascertaining the quality (not the quantity), does not appear to preclude the buyer from afterwards rejecting under Sub-sect. (2).* (c) " Acceptance." See Sect. 35 and note (6) supra. (d) "The contract rate." The acceptance by the buyer of a quantity smaller or larger than that in the contract, forms a new contract, and the ordinary rule would be payment according to value.^ But the section fixes the value at the contract rate which, in the common case, forms the best criterion. (g) "Description." In this section and in Sect. 14 (1) "description" refers to the nature of the goods themselves {i.e. the kind of goods), not to the manner in which the species is 1 Benjamin, p. 696. 2 Waddingtm v. Oliver (1805), 2 B. & P. 61. 3 Oxendale v. WeOwrell (1829), 9 B. & C. 386. * Cvmliffe v. Harrison (1851), 6 Ex. 903. See Com., Sect. 35 infra, p. 170. ^ ' ' When some of the goods have been delivered, and the vendee does not return them upon the failure of the vendor to perform his part of the contract, the latter may bring an action for the value (not the stipulated price) of those goods."— Per Bayley, J., in Shipton v. Casson (1826), 5 B. & C. 378 at p. 383. 142 SALE OF GOODS ACT 1893. Sect. 30. represented in written or spoken language. The latter is meaning in Sects. 13, 14 (2), and 18 (Rule 5). (/) See Sect. 55 and Com. post, p. 258. the Commentary. (1) Sub-sects, and (2). Law of Scot land. Jaffray v. Boag. Richardson v. Roscoe. Jaffi V. Ritchie, The law of Scotland as to Sub-sects. (1) and (2) appears to have been assumed. If the rules embodied in these sub-sections formed part of the law of England prior to the Act, they should ^fortiori have applied to Scotland, where the buyer's power of rejection is much greater.^ The principle of the first sub-section was recognised in Jaffray Y. Boag'^ (1824), where a cask of oil was alleged by the buyer to be five gallons short of the invoice quantity. In intimating this to the seller, the buyer proposed a new arrangement, and afterwards pleaded that the seller's silence inferred his acquiescence. The Court held that the buyer, by selling the cask, had passed from any objection to the quantity, and was bound to pay the full contract price. In Richardson v. Boscoe and Bigg^ (1837), commission agents advised their principals of a purchase of seal oil according to order, but afterwards sent an invoice for about haK the quantity, which the principals declined to take. It turned out that the agents had diverted the remainder of the oil to an alleged prior order from other principals, a proceeding which in law converted them, in a question with the buyer, into principals selling on their own account.* It was held that the buyer was not bound to accept a less quantity than that ordered. In JaffeY. Ritchie^ (1860) the main ques- tion was as to the substitution of jute for flax, but the seller urged that only a very small proportion of the goods were not of the description ordered. Lord Justice-Clerk Inglis, while regretting that the facts had not been more accurately ascertained, held that "on clear principles of law the pur- 1 See Com., Sect. 11 amte, p. 52. 2 3 Sh. 375 (N.E. 266). 3 15 Sh. 952. ■• On this point see Ireland v. Livingston (1872), L.R. 5 H.L. 395, per Lord Blackburn at p. 410, and Robinson v. Mollett (1875), L.E, 7 H.L. 802. » 23 D. 242. PERFORMANCE OF THE CONTRACT. 143 suers must prevail, because there had been a breach of Sect. 30. contract on the part of the seller in failing to deliver the commodity bargained for to its full extent." ^ Where several separate articles are included in the same Separate contract, the buyer is not bound to accept part if the whole ^'■'"'=i^^- cannot be delivered,^ unless the contract contemplates a separation of the obligations * or the buyer acquiesces in a partial delivery.* In Scotland, a breach of contract arising from defective Relation of quantity in deliveries, made in single bulk or simultaneously, quality?' was generally treated as subject to the same rules as a breach arising from defective quality. If the buyer did not time- ously reject the goods and repudiate the contract, he was held to have passed from the objection and to be liable in the full contract price.^ But in the case of defective quantity, a principle resembling the buyer's alternative remedies under this Act ® may be gathered from the House . of Lords judgment in Bohertson v. Harford Brothers and Co!' X^ (1832), where Lord Chancellor Brougham said : " If I buy a dozen of wine and I only get ten — if I drink the ten bottles and am called upon to pay for twelve, it is absurd to say you must pay for twelve — you ought to have taken the objection when the ten bottles came, and said, this is ' 23 D. at p. 249. The following Scottish cases also relate to deliveries alleged to have been defective in quantity — Shewell v. Mowbray (1678), Mor. 14233 ; Smith v. Napier (1804), Hume, 338 ; Galletly v. Child (1824), 3 Sh. 142 (N.E. 95) ; Whitson r. Milson aTid Co. (1828), 6 Sh. 579 ; Schuumians and Son v. Stephen and Sons (1832), 10 Sh. 839 ; Fraser v. Owtram (1834), 13 Sh. 84. 2 Champion v. Short (1807), 1 Camp. 53 ; Hamilton v. Hart (1830), 2 Sh. 596. In the latter case two horses sold together, were held to have been sold as a pair, and one of them proving unsound, the buyer was found entitled to reject the other. The same principle operates in favour of the seller. Thus in Elliott V. Thomas (1838), 3 M. & W. 170, Parke, B., said : "That was a | joint order for common steel and cast steel ; the effect of such a joint order, | unless explained, would be to make it one entire contract, since we must | assume that one article would not have been furnished at one stipulated price || unless the other had been agreed to be paid for at the other price " — 3 M.& W. at p. 176. 3 Hall and Sons v. Scott (1860), 22 D. 413 ; Unn v. Shields (1863), 2 Macp. 88 ; Higgin v. Pumpherston Oil Co. Ltd. (1893), 20 Eet. 532. * Smith V. Napier (1804), Hume 338 ; Bragg v. Cole (1821), 6 Moore 114. 5 As in Jaffray v. Boag (1824), 3 Sh. 375 (N.E. 266), referred to in text supra. ° See Sect. 11 (2). ' 6 W.S. 1, reversing Court of Session judgment suh mom. Harford Brothers and Co. v. Robertson (1831), 9 Sh. 352. 144 SALE OF GOODS ACT 1893. Sect. 30. V. Oliver, Its^relation to the present Act and to the law of Scot- land. t ^-7 Effect of sec- tion upon instalment deliveries. not a dozen — here are only ten. That applies if I had bought wine expecting, it of one vintage and it turned out to be of another, and expecting it was good though it turned out to be bad. It is too late to take the objection." ^ In the English case of Waddington v. Oliver^ (1805), the plaintiff delivered 12 bags of hops on 12th December in part performance of a contract to deliver 100 bags on or before 1st January. His demand for immediate payment of the price of the 12 bags was held premature, the contract time not having expired. The contract seems to have con- templated a single delivery of the whole quantity, and therefore the buyer was not , entitled to demand a part without taking the whole.^ It is doubtful if this judg- ment could now be maintained, in view of the express provision of the first sub-section, that, if goods are accepted, they must be paid for at the contract rate.* The rule in Scotland seems to be in accordance with the sub-section. In the circumstances of Waddington's Case the seller is not bound to make a partial delivery, but if such delivery is neces- sary, e.g. on account of the bulky or ponderous nature of the goods, or if, in any circumstances, it is made with the buyer's consent, the seller is entitled to obtain in exchange, a pro- portion of the price corresponding to the part delivered.^ In instalment deliveries where the seller fails in the first delivery, and thus commences with a breach, it was held in Eoare v. Bennie^ (1859) and Ronck v. Muller'' (1881) that the buyer might cancel the whole contract on giving notice. The question is not free from difficulty,' but, assum- 1 6 W.S. at p. 25. « 2 B. & P. N.R. 61. ' " If a man contracts to buy 150 quarters of wheat he is not at liberty to call for a small portion without being prepared to receive the whole quantity." —Per Wilde, C. J., in Kingdom v. Cox (1848), 5 C.B. 522 at p. 526. * And see before this Act Oxendale v. Wetherell (1829), 9 B. & C. 386 ; Colonial Insurcmce Co. v. Adelaide Marine Insurance Co. (1886), 12 App. Cas. 128. ^ " In many cases strict adherence to the rule of payment on delivery, where subjects are of such bulk that thejr must be delivered in parcels, would cause great inconvenience, and therefore in practice this is seldom required, but it is nevertheless the strict legal right of parties. " — Per Lord Justice-Clerk Inglis in Sail and Sons v. Scott (1860), 22 D. 413 at p. 420. See also Zinn V. Shields (1863), 2 Macp. 88, per Lord Justice-Clerk Inglis at p. 93. 8 5 H. & R. 19. '7 Q.B.D. 92. 8 It is discussed in connection with Sect. 31 Com. post, p. 149. PERFORMANCE OF THE CONTRACT. 145 ing the law to be correctly stated, the buyer's remedy of Sect. 30. rejection seems a consequence of this section as well as of Sect. 31. If the seller has a right to receive payment at the contract rate for the goods actually delivered, such right will result from Sub-sect. (1) of this section. In connection with quantities difficulties often arise from Words in con- the use of special or approximate words such as " cargo," " say quantity!" ^^ from," " about," " not less than," " more or less," " averag- ing," etc.^ Among Scottish cases is that of Tancred, Arrol,\Tancred, and Co. v. The Steel Co. of Scotland^ (1890), where it was^';^"f;f^l^''' held that a contract to supply " the whole of the steel W Scotland. required by you for the Forth Bridge " was not limited by the subsequent words, " the estimated quantity of the steel we understand to be 30,000 tons more or less." " I think," said Lord President Inglis, " these are mere words of expectation, or understanding, or estimate, but they certainly do not limit the very emphatic words with which the contract begins." ^ In the House of Lords the judgment of the Court of Session was unanimously affirmed.* In the ^ A list of such words with illustratiye oases will be found in Chalmers' Commentary on the Act, p. 177. ^ 17 Ret. H.L. 31. In Court of Session, subnom. Steel Co. of Scotland v. Tancred, Arrol, and Co., 16 Ret. 440. 2 16 Ret. at p. 451. See also Walls and Co. v. Greenshields and Co. (1875), Sh. Ct. Glasgow, Guthrie's Sel. Ca. 1st ser. 527. ^ Lord Shand in the Court of Session specially referred to and founded on the following authorities, OwilUm v. Daniel (1835), 2 C. M. & R. 61 ; „ M'Connal v. Murphy (1873), L.R. 5 P.O. 203; Brawley v. United StaUs ^ h i-^ •" - (1877), 6 Otto Amer. Rep. 168. The cases of Leeming v. Smith (1851), 16 / A. & E. 275, and Morris v. Zevison (1876), L.R. 1. C.P.D. 155, which had been cited in argument, were considered by Lord Shand to be special and not 1 applicable (16 Ret. at p. 457). In the American case of ^raiafoy v. Unitedl States, approved of in The Steel Co. 's Case (supra), the Supreme Court of the I United States laid down the following rules : — " Where a contract is made to sell or furnish certain goods identified by reference to independent circum- stances, such as an entire lot deposited in a certain warehouse, or all that may be manufactured by the vendor in a certain establishment, or that may be shipped by his agent or correspondent in certain vessels, and the quantity is named with the qualification of 'about' or 'more or less,' or words of like import, the contract applies to the specific lot ; and the naming of the quantity is not regarded as in the nature of a warranty, but only as an estimate of the probable amount in reference to which good faith is all that is required of the party making it. . . . But when no such independent circum- stances are referred to, and the engagement is to furnish goods of a certain quality or character to a certain amount, the quantity specified is material and governs the contract. The addition of the qualifying words 'about,' ' more or less,' and the like, in such cases, is only for the purpose of providing against accidental variati9ns arising from slight and unimportant excesses or L 145 SALE OF GOODS ACT \l Sect 30. North British oa Go. V. Swann, Sub-sect. (3) Extension of previous law. case of Mrth British Oil Co. v. Swann^ (1868) a contract to supply as much cannel coal (within certain limits) as the pursuers (a manufacturing company) might "require," was interpreted, not to , mean as much as the pursuers should demand, but as much as they should require for the purpose of their manufacture.^ Further cases illustrative of Sub-sects. (1) and (2) are noted below. ^ The rule of Sub-sect. (3) as to mixed goods probably goes, a step further than the common law of England. It is clear that, prior to the Act, a buyer was not bound to keep goods where there was risk, trouble, or expense in separating the contract goods from those with which they were mixed.* The Act empowers the buyer to reject in every case. deficiencies in number, measure, or weight. If, however, the qualifying words are supplemented by other stipulations or conditions which give them a broader scope or a more extensive significanoy, then the contract is to be governed by such added stipulations or conditions, as if it be agreed to furnish so many bushels of wheat, more or less, according to what the party receiving it shall require for the use of his mill." — Per Mr. Justice Bradley, 6 Otto at pp. 171, 172. 1 6 Macp. 835. : ^ Another application of " required " will be found in Tcmcred, Arrol, and Co. V. Steel Co. of Scotland (1890), 17 Eet. H.L. 31. See also the opinion of Mr. Justice Bradley quoted supra. ' Sub-sect. (1).— ifeitfer- V. Sala (1879), i C.P.D. 239, where the contract was for 25 tons Penang pepper, only 20 tons of which complied with the terms of the contract as to shipment. The buyer was held entitled to reject the 20 tons ; Richardson v. JDunn (1866), 2 Q.B. 222, where 152 tons of coal were delivered and retained on an order for 200 or 300 tons ; Oxendale v. Wetherell (1829), 9 B. & C. 386, where the buyer kept 130 bushels wheat delivered under a contract for 250. These oases illustrate the latter part of the sub-section. The case of Oxendale v. Wetherell was approved by the Privy Council in The Colonial Insurance Co. of New Zealand v. Adelaide Marine Insurance Co, (1886), 12 App. Ca. 128. Sub-sect. (2).— In Gross v. Eglin (1831), 2 B. & Ad. 106, an order was given for "about 300 quarters, more or less, of foreign rye," and " 50 quarters foreign red wheat." The buyers were held entitled to reject a delivery of 345 quarters of the one, and 91 quarters of the other. In Sart v. Mills (1846), 15 M. & W. 85, the order was for four dozen wine, and eight dozen were sent ; it was held that the whole might be returned. In Gv/nliffe v. Harrison (1851), 6 Ex. 903, fifteen hogsheads of claret were delivered instead of ten. Parke, B., said " the delivery is no performance of the contract, for the person to whom the hogsheads are sent cannot tell which are the ten that are to be his ; and it is no answer to the objection to say that he may choose which ten he likes, for that would be to force a new contract upon him " (6 Ex, at p. 906). * Levy V. Ch-een (1857), 8 E. & B. 575 (crockery ware in a crate containing articles in excess of the order and of a different pattern) ; Nicholson v. Brad- field Union (1866), L.R. 1 Q.B. 620 (coal partially delivered in terms of PERFORMANCE OF THE CONTRACT. 147 The use of the word " mixed " implies that the goods are Sect. 30. mingled in one covering or package, or are delivered in "Mixed de- such a manner as of necessity to involve trouble in the '^*'^^' separation. The delivery of goods additional to the contract J" c '- ' ^' quantity, but in separate lots, cannot be properly called ',» ' a mixed delivery. 31. — (1.) Unless otherwise agreed, the buyer of Sect. 31. goods is not bound to accept delivery ^"^ thereof by beuvembT instalments.^^ (2.) Where there is a contract for the sale of goods to be delivered by stated instalments, which are to be separately paid for,^"^ and the seller makes defective deliveries ^'^ in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation^'^ of the whole contract or whether it is a severable breach giving rise to a claim for compensation ^'^ but not to a right to treat the whole contract as repudiated. Notes. (a) "Delivery." Defined Sect. 62 (1). (6) This sub-section leads to the same result as Sub-sect. (1) of Sect. 30. A buyer is not bound to accept a less quantity than that contracted for. The rule may, however, be varied by "usage of trade, special agreement, or course of dealing" [Sect. 30 (4)].^ If the buyer accepts and retains an instalment he will contract, but seller afterwards " shoots in " a lot of a kind not contracted for, wHcli gets mixed with, the iirst delivery). See also Mylands v. Kreitman (1865), 19 C.B. N.S. 651. 1 See WTiitson v. Neilson a/nd Co. (1828), 6 Sh. 579. In many cases the weight or bulk of the goods precludes delivery in one lot. On the other hand, a buyer is not (apart from agreement) entitled to call for a portion of the goods without being prepared to receive the whole — Kingdom v. Cox (1848), 5 C.B. 522, per Wilde, J., at p. 526. See Com., Sect. 30 ante, p. 144. Cf. 148 SALE OF GOODS ACT 1893. Sect. 31. be liable for the price at the contract rate, even if there should afterwards be a breach on the part of the seller in regard to the remaining instalments. ^ (c) " Separately paid for." In Scotland, in the absence of ex- press or implied agreement, the strict rule is that payment is due for each instalment as delivered.^ The rule in England prior to the Act seems to have been different : " Where there is an entire contract to deliver a large quantity of goods consisting of dis- tinct parcels within a specified time, and the seller delivers part, he cannot, before the expiration of that time, bring an action to recover the price of that part delivered because the purchaser may, if the vendor fail to complete his contract, return the part delivered. But if he retain the part delivered after the seller has failed in performing his contract, the latter may recover the value of the goods which he has so delivered." * {d) "Defective deliveries." These may be by way either of short quantity or total failure in delivery. (e) "Repudiation" "compensation." Compare with Sect. 11 (1) (&), and see definition of "warranty," Sect. 62 (1). Commentary. Difficulties as Continuing contracts, which are now very common in contrac^^™^ Connection with supplies of iron and coal, present difficulties which are not satisfactorily met by the present section. The conflicting views are embodied in the alternatives pre- 1 OxendaU v. Wetherell (1829), 9 B. & C. 386, modifying or correcting Waddingtonv. Oliver (1S05),2 B. & P. K.R. 61. See Com. , Sect. 30 aniie, p. 144. 2 It has been laid down in Scotland that where the character of the goods or the terms of the contract justify a delivery in lots or instalments the strict rule is payment for each lot as delivered, though, apart from contract, payment is seldom required. See dicta of Lord Justice-Clerk Inglis in Mall and Sons V. Scott (1860), 22 D. at p. 420 ; and in Linn v. Shields (1863), 2 Macp. at p. 93. If over-payments of certain instalments of the price are made through mutual error, these may be corrected in a subsequent accounting — Baird's Trustees v. Baird (1877), 4 Ret. 1005. 3 Per Parke, J., in OxendaU v. Wetherell (1829), 9 B. & C. 386 at p. 387, quoted in Colonial Insurance Co. of New Zealand v. Adelaide Marine Insur- ance Co. (1886), 12 App. Ca. at p. 138. In the dictum quoted, there is apparently an attempt to reconcile Oxendale's Case with the earlier case of Waddington v. Oliver (1805), 2 B. & P. N.R. 61, but the latter case presents difficulties which are referred to elsewhere. See Com., Sect. 30 anie, p. 144. The same difficulties suggest themselves in connection with the statement of Beniain in ^ that the burer" maj^ retura, theparcels first receive d if the lat er deliveries/ be noT"madS'^Sfflfo'i p. 898)7' What"' it "may " be "asked, is the ibuyer's'relationto the first parcels while in his possession ? Are they only tentatively and conditionally accepted, or are they not accepted at all ? The Act seems to support the Scottish rule. PERFORMANCE OF THE CONTRACT. 149 sented by the second sub-section, but we are not much Sect. 31. aided by the statement that it depends on the terms of the contract and the circumstances of the case which of the alternatives is to be adopted. Where there is a breach of an instalment delivery or of an instalment payment, is the seller or buyer not in fault entitled to declare himself re- lieved from all further obligations under the contract, or is he bound to treat the instalment as a separate contract and to continue to implement his obligations in respect of the remain- ing instalments ? In the latter case, it is clearly his duty to ascertain and possibly minimise the loss arising from the particular breach, by going immediately into the market and selling or buying, as the case may be, against the party in fault. But the question , is generally complicated by varia- tions upon the terms of the original contract arising from mutual convenience or from forbearance on the part of seller or buyer. It may suit both parties to delay deliveries or to alter the quantities ; or one of the parties, with the ac- quiescence of the other, may depart from the strict terms of the contract. The questions thence arising require for their Different legal solution the application of legal principles, which differ P™cipies m considerably in England and Scotland. Thus, in England, Scotland. it is said that " a breach by the party suing is a breach of only a part of tlw consideration moving from him, and such a breach may be compensated in damages without any necessity for annulling the whole contract." ^ This is an application of the doctrine of " Consideration," a doctrine which the law of Scotland does not recognise,^ and not only so, but the principle enunciated in the dictum is incon- sistent with the option given to the purchaser in Scotland under Sect. 1 1 (2). Again, where the terms of the contract have not been strictly adhered to, it is necessary in England to enquire whether the alteration was of mutual consent, or arose from the forbearance of one of the parties. If of mutual consent, or if the party benefiting by the forbear- ance is the plaintiff claiming full implement, it may be ' Per Brett, L. J., in Renter Y. Sala (1879), 4 C.P.D. 239 at p. 257. ^ See Notes on the English doctrine of "Consideration," Appendix III. post, p. 341. ISO SALE OF GOODS ACT 1893. Sect. 31. Conflicting decisions in England. found that the original contract is rescinded, and that the alteration, being in law a new contract, is void under the Statute of Frauds or the correspoiiding provisions of this Act.'' No such question can arise in Scotland, neither the Statute of Frauds nor Sect. 4 of this Act having any appli- cation.^ A third principle having no counterpart in Scot- land, is suggested by the wording of the present section, which seems founded on the English distinction between a condition and a warranty, or, in other words, between a contract and a " collateral agreement." * The English decisions are not easily reconciled with them- selves, and therefore, even apart from the differences in principle above referred to, they are not to be relied on as illustrating the law of Scotland. In Hoare v. Bennie * (1859) the seller failed to give full delivery of the first instalment, and in Honck v. Muller^ (1881) the buyer failed to accept delivery of the first instalment. In both cases it was held that dehvery and acceptance at the time specified were conditions precedent, a breach of which en- titled the party not in fault to repudiate the whole con- tract.® But in the interval between these two cases it was decided in Simpson v. Grippin'' (1872) that a breach by the buyer in regard to one of the instalments ^ did not justify the seller in rescinding the entire contract. A similar judgment was given in Freeth v. Burr^ (1874), where Cole- ridge, C J., said : " In cases of this sort where the question is whether the one party is set free by the action of the other, the real matter for consideration is whether the acts or conduct of the one do or do not amount to an intimation of an intention to abandon and altogether refuse perform- ance of the contract." ^^ These conflicting decisions were 1 Sect. 4. See Ogle v. Earl Vane (1868), L.E. 3 Q.B. 272 ; SicJcman v. Haynes (1875), L.E. 10 C.P. 598 ; Plevim v. Downing (1876), 1 C.P.D. 220 ; Benjamin, pp. 189, 692. ^ See Notes on the history of the Statute of Frauds, App. III. post, p. 343. ' Compare this section with Sub-section 11 (1) (6), and contrast with Sub- section 11 (2) embodying the Scottish rule. * 5 H. & N. 19. 57 Q.B.D. 92. " See also Renter v. Sala (1879), 1 C.P.D. 239. ' L.R. 8 Q.B. 14. * In this case, as in the others previously mentioned, it was the first instal- ment. 9 L.R. 9 C.P. 208. " L.R. 9C.P. at p. 213. See also ^rowrfi v. Lawrence (1876), IQ.B.D. 344. PERFORMANCE OF THE CONTRACT. 151 supposed to be reconciled by the House of Lords judgment Sect. 31. in Mersey Steel and Iron Co. v. Naylor'^ (1884), where the Mersey steel breach was on the part of the buyer in refusing to make Tm'y'i^^''' payment of the first instalment under the mistaken im- pression that he was prevented from doing so by a petition having been presented for the winding up of the selling company. The principle stated by Lord Coleridge ^ in the passage above quoted, was approved of both in the Court of Appeal and in the House of Lords. Lord Selborne stated the test thus : " You must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the con- duct of the other. You must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part." ^ In reference to this last decision the editors of Benjamin [4th edition] say " an intelligible principle having been arrived at, it is unnecessary to attempt to reconcile the conflicting decisions in Hoare v. Bennie, Simpson v. Crippin, and Honck v. Muller. Each case may possibly be sup- ported on the particular facts there presented." * The principle referred to is embodied in the section now under consideration, but, as already suggested, it does not carry us far. To say that each case is to be decided with reference to its own circumstances, does not materially guide us in applying the law to the circumstances. In applying the section to Scotland it is to be noted Application of that its terms do not necessarily involve the construction Scotland, which has been given in England to this class of contracts, and, as above observed, there are various reasons why, in this instance, Enghsh case-law is of comparatively little value. It will be found that, as a rule, greater regard is 1 9 App. Ca. 434. 2 In Freeth v. Burr (1874), L.R. 9 C.P. 208 at p. 213. 3 9 App. Cas. at p. 438. * Benjamin, p. 590. 152 SALE OF GOODS ACT 1893. Sect. 31. Contrast be- tween Scottish and English cases. Scottish decisions.- Barclay v. Anderston Foundry Co. paid in Scotland than in England to the unity of the con- tract, and the mutuality of its obligations.^ Most of the English cases tuVn upon the question whether a branch of an instalment is separable, so as to preserve intact the remaining instalments in face of declared repudiation by the party not in fault. In no Scottish case has a principle been recognised approaching to that of Simpson v. Crippin ^ where, notwithstanding an admitted breach of an instalment on the part of the buyer, and an immediate repudiation of the whole contract on the part of the seller, the latter was held bound in regard to remaining instalments, just as if no breach had taken place.^ In one case in Scotland, to be afterwards noticed,* the agreement expressly bore that each instalment should form a separate contract, yet, even here, the question was not whether there was rescission of the whole, in conse- quence of a breach of one, but whether there was con- structive mutual abandonment of all obligations so far as not implemented. The Scottish law on the subject is practically confined to five cases, three of which are of very recent date. In Barclay v. Andersion Foundry Go? (1856) extensive changes were made of mutual consent, both in the time of delivery and the mode of payment. Bills by the buyer for the price having been dishonoured, an entirely new arrange- ment for payment was entered into, after which the buyer demanded the remaining instalments. The sellers resisted, on the ground that the new arrangement inferred an abandonment of any further right or obligation under the ■^ " It is very important that we should express our determination to abide by the well-established rule of Scotch law, that, in mutual contracts, there is no ground for separating the parts of the contract into independent oblige- ments, so that one party can refuse to perform his part of the contract, and yet insist upon the other performing his part. The unity of the contract must be respected." — Per Lord Benholme on Turribull v. M'Lean and Co. (1874), 1 Ret. 730 at p. 739. See also Lord Justice - Cleric Monoreiff to the same effect at p. 738. 2 (1372) L.R. 8 Q.B. 14. ^ "To say that where a contract is to be implemented by instalments, the furnishings of one month are totally independent of the next, is an egregious fallacy." — Per Lord Neaves in Turnbuli v. M'Lean and Co. (1874), 1 Bet. 730 at p. 739. * Higgin v. Pumpherston Oil Co. Ltd. (1893), 20 Ret. 532. 5 18 D. 1190. PERFORMANCE OF THE CONTRACT. 153 original contract. The buyer did not deny the sellers' right Sect. 31. to repudiate, but urged that they should have given distinct notice at the time of the breach, of their intention to do so. This plea was negatived.-^ In Turnlull v. M'Lean and Co? (1874) there were, in TumbuUv. like manner, innovations of mutual consent upon the terms ^yq ^^ "" of the original contract. The question, however, arose, not out of these, but out of a refusal by the buyer to make pay- ment of one of the instalments until certain counter claims at his instance, which turned out to be unfounded, had been settled. The sellers there and then repudiated the whole contract so far as not implemented, and they were held entitled to do so. In Siggin v. Fumpherston Oil Co. Ltd? (1893) the HigginY. contract was for 20 tons paraffin -wax in instalment de- oaCo^LO^ liveries over twelve months, with an express provision, which did not occur in any of the previous reported cases either in England or Scotland, that " each delivery shall constitute a separate contract." No deliveries were made or asked during the first six months, and only 3 tons were asked and deKvered during the second six months, but at the close of the twelve months the buyer insisted upon delivery of the remaining 17 tons. The sellers resisted the claim, but offered 2 tons, being more than the proportion effeiring to the month. The Court held that the buyer had no claim beyond the amount offered. It was found that there were twelve distinct contracts, but this circumstance did not affect the principle of the decision, which was that the parties, by their conduct, had released each other of their respective obligations, so far as these had not been implemented. In Barr v. Waldie^ (1893) there was no provision that Barrv. each instalment should form a separate contract, and, "' ^' although the point did not directly arise, it seems to have ^ " In a continuing contract such as this, it seems to me that a persevering neglect to make the periodical pajrments stipulated for, in consideration of the obligations undertaken to make periodical deliveries of the article sold, did not require previous notice to entitle the seller to act on the footing of the contract being at an end." — Per Lord Cowan, 18 D. at p. 1198. 2 1 Ret. 730. 3 20 Ret. 532. * 21 Ret. 224. 154 SALE OF GOODS ACT 1893. Sect. 31. been assumed that the contract was indivisible. The attention of the Court was chiefly directed to the question whether a stipulation for delivery of 2500 tons coal "in equal monthly quantities, in lots of 300 tons maximum," gave an option to the buyer to fix the equal deliveries at any quantity he chose under the maximum. This was held to be an unreasonable interpretation, and, therefore, the Court read into the contract a provision that each monthly instalment should amount as nearly as possible to 300 tons. The soundness of this part of the decision can scarcely be questioned, but the case goes further, and seems to assume that the contract became ipso facto null by the failure timeously to take delivery.^ Ireland y. In Ireland and Son v. The Merryton Coal Co? (1894), CmPco!^ ^^^ contract was for 3000 tons coal "in average monthly quantities over the next four months." It was held that the sellers were not bound to deliver 3000 tons irre- spective of the period of delivery, but that the contract was for four monthly deliveries of about 750 tons each. " I regard the contract," says the Lord Ordinary (Stor- month Darling), " as one contract, and not four contracts ; but I think the deliveries were to be spread over the four months in nearly equal proportions, with the result that, if the purchaser failed to take something like the proper proportion in any month, he was not entitled to demand dehvery of that quantity in succeeding months."^ This view was adopted by the Court, but it is open to the observation that there is very little difference between four separate contracts for 750 tons each, and one contract for 3000 tons, so divided into sections of 750 tons, that no obligation under one section can be carried forward into another. Starting from the same premises of a united and yet divisible contract, the Lord Ordinary and the Court arrived ' " The pursuer had a right to the delivery of 300 tons per month, for each successive month after the date of the contract, until the quantity was ex- hausted. The deliveries were to be made monthly in equal quantities. If lie did not choose to take delivery within these months he had no further right. For the contract necessarily expired with the time required for the delivery of the total amount." — Per Lord Kutherford Clark, 21 Ret. at p. 228. 2 21 Ket. 989. ^ 21 Ret. at p. 991. PERFORMANCE OF THE CONTRACT. 155 at different conclusions. The former thought that in no Sect. 31. single month was there such an absolute repudiation of the contract as to make it essential for the party not in fault to make an appeal to the market so as to fix the damages. The contract in the opinion of the Lord Ordinary "was treated by both parties as in fuU vitality " until within a day or two of the close of the whole contract period, and, therefore, the damages for short deliveries fell to be fixed as at the date of the claim. The Second Division, while agreeing that the buyers were ex- cluded from any right to arrears of deliveries not asked for during the month to which the deliveries applied,^ held in regard to the months in which deliveries were asked and not received, that, as the buyers could have gone into the market and bought in coal to supply the deficiency, they were not entitled to greater damages than the difference between the contract price and the market price for the month. In a rising market the amount of damages was thus greatly lessened.^ The three more recent Scottish cases above referred to Effect of Act agree in an important particular. There was no distinct ^P°° i'J°™* ° jT jr Scottish cases. repudiation of the contract by the party not in fault, and, even where one of the parties urged the other to conform more nearly to its terms, this was done, not with the object of cancelling the contract or any of its divisions, but merely to suit the convenience of the hour. If the contract was not cancelled, there was clearly waiver of the breach by the party not in fault, and, therefore, if these cases are good law, the result is that, not only is time of delivery an essential condition in all instalment sales, but a breach of the condition cannot be waived by the actings of parties. This seems inconsistent with Sects. 1 1 (2), 53, and 55 of the Act. ^ ' ' There was no breaoli of contract in not delivering what the pursuers did not want, did not ask for, and could not take." — Per Lord Trayner, 21 Ret. at p. 993. ^ During the continuance of a contract for a daily supply of coal the buyers were held entitled to bring an action for damages for past deficiencies, reserving further claims, and were also held entitled after the expiry of the contract to bring a second action — Jackson v. Come and Sons (1872), 9 S.L.K. 617. IS6 SALE OF GOODS ACT 1893. Sect. 32. 32. — (1.) Where, in pursuance of a contract of sale/"^ CARRIER. the seller® is authorised or required^"^ to send the goods® to the buyer,® delivery^'^ of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is prim^ facie ^'^ deemed to be a delivery^'*' of the goods to the buyer. (2.) Unless otherwise authorised by the buyer, the seller must make such contract with the carrier^-'^^ on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omit so to do, and the goods are lost or damaged in course of transit,^^ the buyer may decline® to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible® in damages. (3.) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit,^'^ under circumstances in which it is usual to insure, the seller must give such notice to the buyer*^^ as may enable him to insure them during their sea transit, and, if the seller fails to do so, the goods shall be deemed to be at his risk during such sea transit. XOTKS. (a) " Contract of sale." Defined Sects. 1 and 62 (1). (b) "Seller," "buyer," "goods." Defined Sect. 62 (1). (c) "Authorised or required." The rule of Sect. 29 as to delivery is here superseded by express or implied contract. " Authorised " seems to refer to a voluntary act of the seller, sanctioned by express or tacit acquiescence on the part of the buyer ; " required " is the appropriate word vrhere delivery to the buyer is an express term of the contract, or is so implied as to form part of the seller's obligation. PERFOR.^TANCE OF THE CONTRACT. 157 (d) "Ddw^ry." Defined Sect. 62 (1). In the case of un- Sect. 32. ascertained or future goods, delivery to a carrier is also an " appropriation " of the goods to the buyer so as to ■pass the property to him [Sect. 18, Rule -5 (2)]. The sub-section makes no distinction between goods delivered to a carrier for transmis- sion from one part of England to another, and goods delivered to a carrier for transmission to or from a foreign countrv. The suggestion of Grove, J., in PoirUin v. Porrier^ (188.5) that the English rule does not apply to consignments from abroad, is totally unsupported by authority, and is opposed to the opinion of Manisty, J., in the same case.^ (e) '■ Prirnd facie." The general rule yields to evidence of con- trary intention, as where the seller resenes the jus disponendi by taking the bill of lading to the order of himself or his agent [Sect. 19 (2)], or where he altogether prevents delivery by making the carrier his own, and not the buyer's agent. Even where the carrier receives the goods on behalf of the buyer, he is not entitled without special authority to accept them in the sense of Sect. 35. On the other hand, though the carrier may be the seller's agent, the buyer, in the absence of contrary agreement, takes the risk of deterioration necessarily incident to the transit. (Sect. 33). (/) " Contract vdth the carrierr." The rule of this sub-section 1 Q.B.D. 49 J.P. 199. ^ The DiTisional Court was composed of the two judges referred to. Grove, J., reasoned thus : " Here the parties know the law and the custom, but to apply that law to cases in foreign countries would, to my mind, be not only very dangerous, but might be used with very unjust and unfair results, and I am of opinion that it is incumbent upon parties in foreign countries to deliver to " [the buyer or his agent]. It was not necessary to decide the point, but Manisty, J., said : " Whether in the case of an order being given to a foreigner for certain goods to be sent to agents abroad, or direct to the person giving the order in England, delivery to a foreign railway company at the place where the consignor resides is a good delivery to the consignee or agent, is a question of great importance, and I should feel very sorry to throw doubt upon what is settled law so fer as this country is concerned. If I order goods from a person abroad, and these goods are sent to me by the ordinary mode of carriage, the question of delivery is governed, in my opinion, by the same principles as govern delivery to a carrier in this country" (49 J.P. at p. 199). In Brovm v. Hodgson (1809), 2 Camp. 36, the Attorney-General of the day attempted to establish the converse proposition, and distinguished between goods sent from one part of England to another, and goods sent from England to a foreign country. He argued that in the former case delivery to the carrier was delivery to the consignee, but in the latter, the risk was still the consignor's till the goods reached their destination. The biU of lading, however, bore that the goods were shipped "by order and on account of" the consignee, and Lord Ellenborough could "recognise no property but that recognised by the bill of lading. " In Scotland, the law of the sub-section, whether applied to imports or exports, has never been in doubt. See e.g. Triwx V. Fallat (1680), Mor. 4932, and Com. infra, p. 159. 158 SALE OF GOODS ACT 1893. Sect. 32. is based on the cases noted below.^ The seller is custodier of the buyer's goods, and is thus an agent for him, and bound to protect his principal (Sect. 20, 2nd proviso). {g) " Transit." For rules as to duration of transit, see Sect. 45. (li) " Decline delivery," " hold seller responsible." The former of these alternative remedies is based on the property and risk being continued with the seller ; the latter infers damages against the seller for neglect of duty as the buyer's agent. Where declinature of delivery is justified, the buyer's remedy is for breach of contract under Sect. 51 (1),^ while the remedy for the seller's neglect to make a reasonable contract with the carrier, seems to fall under Sect. 57, rather than under Sect. 53. If the carrier is to be pro- ceeded against, it is necessary, where delivery is declined, that the seller should pursue the action, but where the buyer accepts, and trusts to the seller's responsibility for damages, the action against the carrier should probably be at the instance of the buyer, as owner of the goods from the time when the transit commenced.^ (i) " Sent by a route involving sea transit." The bill originally read "sent by sea." It was altered in Select Committee of the Commons, to meet the case of combined land and sea carriage. (j) " Notice to the buyer." The duty here imposed on the seller was suggested by the law of Scotland, but the provision of the sub-section seems to go rather further than the Scottish rule (see Com. infra, p. 164). "There appears to be no English decision in point." * Commentary. Sub-sect. (1). Sub -sect. (1). — The rule of this sub -section was established in Scotland as early as the case of Prince v. 1 Clarke v. ffutchins (1811), 14 East 475 ; Cotfiay v. Tute (1811), 3 Camp. 129 ; BucJcman v. Levi (1813), 3 Camp. 414 ; Pointing. Pomer (1885), 49 J.P. 199. The seller " has an implied authority, and it is his duty, to do what- ever is necessary to secure the responsibility of the carriers for.' the safe delivery of the goods, and to put them in such a course of conveyance as that in case of a loss the defendant might have his indemnity against the carriers." — Per Lord EUenborough in Clarke v. Hutchins, 14 East at p. 476. See also Indian Contract Act 1872, Sect. 91. 2 " If the goods tendered are rejected, and properly rejected, by the buyer, there can be no doubt that the position remains the same as if the vendor had I done nothing under the contract. There is no specific appropriation, and no j transfer of property, and the vendor, if delivery under the contract is due, is I liable to an action for non-delivery." — Campbell on Sale of Goods, 2nd ed., ' p. 514. Where rejection is not justified, the seller's remedy is under Sect. 60 ' See Dawes v. Peck (1799), 8 T.R. 330 ; Dunlop v. Lambert (1839), 6 CI. and Fin. 600, and other cases noted by Benjamin {Sale, p. 164). ^ Chalmers on SoiXe of Goods Act, p. 66. PERFORMANCE OF THE CONTRACT. 159 Fallot^ in 1680. The circumstances were these. Udny, Sect. 32. a Scotchman, ordered three tuns of wine from Pallat, a Prince, y. merchant in Bordeaux, to be sent in Gillespie's ship. Pallat '^"^^'*''- shipped the goods, but hearing, after the vessel had sailed, that Udny was "about to break," he wrote to his corre- spondent, Wilson, to receive the wines from the " skipper " (shipmaster), and not to deliver them to Udny. The letter arrived before the wiues, but in the meantime Udny had assigned them to Prince for onerous causes, and Prince arrested them in the skipper's hands and obtained decree of forthcoming. In a suspension Pallat urged among other pleas (1) that "the wines never became Udny's, not being delivered to him " ; (2) that " there was here no sale but a mandate, for it is notour that Pallat is a factor, and fur- nishes goods ex Trmndata." It was answered for Prince, that " here there was a proper sale perfected hy delivery to the skipper for behoof of Udny ; neither did Pallat order the skipper to consign the wines to Wilson, his correspondent ; neither did Pallat send the wines as factor, but sold them as merchant." The Lords found " that, the wines being delivered to the skipper upon Udny's order, the property was stated in Udny, and that there is no hypothec in ware for the price, by the law of Scotland."^ Eeference is elsewhere made ^ to a misconception as to the Effect upon de- true nature of stoppage in transitu, which existed in Scotland as'to^stopmee between 1790 and 1849. This error lingered after the latter in transitu. date in another form. It was supposed that, if there was stop- page in transitu in the case of a vessel chartered by the buyer, the reason must be that there was no delivery to the buyer.* 1 Mor. 4932. ' Mor. 4932. See also Dicksons and Co. v. Ponton (1824), 3 Mur. 439 per Lord Chief Com. Adam at p. 440 ; Dick v. Thorn (1829), 8 Sh. 232 ; Jones and Co. v. Moss (1830), 8 Sh. 495 ; Bell on Sale, p. 86. In some cases the rule is complicated with questions of stoppage in transitu, as in Morton and Go. V. Abereromby (1858), 20 D. 362. 3 Com., Sect. 44 post, p. 205. * Thus Ross in his Leading Cases published in 1855 {Com. Law, vol. ii. p. 801) states the then existing law thus : " The shipping of goods on hoard a vessel freighted by the purchaser of goods, is not equivalent to delivery, and does not prevent stoppage in transitu. " In this statement he goes beyond the case on which he founds, for, although judgment was given in 1801, when the general error was unchecked, the report itself bears that "a great i6o SALE OF GOODS ACT 1893. Sect. 32. Sub-sect. (2). Contract with Sub-sect. (3). Imported from law of Scotland. But stoppage in transitu, as now understood, necessarily involves previous delivery to the buyer through the carrier as the buyer's agent. If there had been no delivery, the buyer's remedy would have been lien, not stoppage in transitu} The effect upon delivery of embarking the goods in a ship chartered by the buyer is entirely one of circum- stances [Sect. 45 (5)]. Sub-sect. (2). — Scottish text -writers of the present century invariably state the rule as it is set forth in this sub-section, but the authorities are entirely English. The law is thus stated by Bell. " The seller may expressly or tacitly undertake to give the goods into the hands of a third party; to a wharfinger, or agent, or carrier, or ship- master. He will, in that case, be bound to perform such an act of delivery as shall fix the goods effectually on the proper person, so as to confer on the buyer the benefit of his purchase, or enable him to insist for his goods against a proper party. When the seller has done this, he is dis- charged of his duty ; till it is done, he can have no action for the price, and the risk is stiU his." ^ Among English authorities cited by Scottish text -writers are Clarke v. Sutchins^ (1811) and Buckman v. Zevi* (1813), in both of which the seller's duty as the buyer's agent is clearly set forth by Lord EUenborough.^ Sul-sect. (3). — If, in regard to the preceding sub- section, the authorities are borrowed from England, this sub -section, on the other hand, affords one of the few majority of the Court were of opinion that the delivery was constructive only, and did not prevent stoppage in transitu " — Robertson and Aitken v. More and Co., Mor. App. Sale, No. 3. ^ " It is a contradiction in terms to say a man has a lieu upon his own goods, or a right to stop his own goods in transitu. If the goods be his he has a right to the possession of them whether they be in transitu or not." — Per Buller, J., in Lickbarrow v. Mason (1793), 6 East 21 at p. 24. 2 Bell on Sale, p. 84. See also BeU's Com. i. 274 ; Bell's Prin., Sect. 118 ; M. P. Brown, p. 370. Where the buyer instructed coal to be sent from Glasgow to Inveraray by "gabbart," the seller's obligation was discharged by shipping them on board a gabbart employed as an ordinary trader between the two ports. In order to establish negligence in employing an unseaworthy vessel it was held necessary to prove culpa lata on the part of the seller — Sword V. Milloy (17th February 1813), F.C. 3 14 East 475. » 3 Camp. 414. '■' These cases are narrated at some length by M. P. Brown — Sale, pp 370-373. See note (/) supra. PERFORMANCE OF THE CONTRACT. i6i instances in which English law is founded on Scottish Sect. 32. precedent. The earhest case is that of Hoog v. Kennedy and Hoog v. Maclean^ (1'''54), where a Glasgow firm ordered goods from ^^""^y- Eotterdam to he sent first ship for Leith, Greenock, or Bo'ness. The goods were duly shipped on 12 th August, but no advice or bill of lading was sent by post to the buyers. The sellers forwarded on 3rd September an account-current, in which they took credit for goods sent by Burton (the master) for Leith, but neither goods nor ship were specified. The ship sailed on 25 th August and on 4th September was lost. The report bears that "it was laid down as a general rule, that it is the indispensable duty of factors and others who deal by commission, to give regular notice of the shippiug of the goods by course of post, and also to transmit a copy of the bill of lading.'' Lord Kames, who reports the judgment, asks : " Will the factor's neglect of duty subject him to every damage that might possibly have been prevented by a regular advice, or only the damage which is the necessary consequence of neglect- ing to give advice ? In this case the buyers did not insure, as they might have done, on receipt of the advice which they actually got though late, therefore it might justly be presumed that they would not have insured though they had got the most early advice. Nevertheless the seller was held liable in damages." ^ In Cooper v. Green and Chatto^ (1791) the goods were Cooper y. , shipped on 19 th December in a vessel which did not sail ^^"" till the 24th. The bill of lading and invoice were for- warded on the 25 th, being the earliest post after the vessel had sailed. It was held that the seller had conformed to the usual practice, and was not in mora. In Sesseltines v. Arrol and Co.'^ (1802), London dealers Hessdtines -v. on receipt of an order from Edinburgh sent tea to the ■^'^"^ "■'^ <^<'- wharf in London of a shipping company having a number of packets trading between London and Leith. They were told that it would go by the Kelso packet, and the invoice Mor. 10096. ' Mor. 10098. Jlor. 10100. * Mor. 10111. M 1 62 SALE OF GOODS ACT 1893. Amot V, Stewart. Sect. 32. was so made out, but on making further enquiry in the evening they were then informed that it would go by the Union packet. The invoice was altered by deleting Kelso and inserting Union, and was then forwarded by post to Edinburgh. The tea was actually shipped by the Kelso packet, and the vessel having been stranded the greater part was lost and the remainder damaged. It was held that the sellers were not responsible. One of the grounds of judgment was that the buyers might have insured " on ship or ships," and it was considered of importance that they never made any attempt to insure. This judgment was followed in Elton, Hammond, and Co. v. Porteous and- Dewar^ (1808), but both cases were doubted and distin- guished in Amot v. Stewart ^(181 3), affirmed in the House of Lords ^ (1817). In the last-mentioned case a seller in London shipped goods for Scotland on board a vessel which sailed on 24th February. He forwarded an invoice on 27th February bearing that date, and stating that the goods had been shipped, but without mentioning that the vessel had sailed. The ship having been lost it was held that the risk remained with the seller, although it did not appear that the buyer intended to insure.* The rule was rigidly appHed in Fleet Brothers v. Morrison^ (1854), where the delay of a single day in giving notice of shipment was held to leave the risk of the goods with the seller. It was argued that intimation of the inten- tion to ship the goods should have been given in sufficient time to give the buyer an opportunity of insuring from the commencement of the voyage, but the Court did not go this length. Lord Justice-Clerk Hope said : " I am disposed to hold that a letter written and posted on the day the vessel sailed would, in the circumstances, have been timeous inti- Short voyages, mation." ^ In reference to the argument that in short coasting voyages it is not usual to insure. Lord Wood Fleets. Morrison, 1 13th December 1808, F.C. ^ 25th November 1813, F.C. 3 5 Dow App. Cas. 274 ; 6 Pat. App. Cas. 289. * See also Andrew v. Ross, Park, and Others (6th December 1810), F.C. and Johnston and Sharp v. Baillie (2nd June 1815), F.C. » 16 D. 1122. 16 D. at p. 1123. PERFORMANCE OF THE CONTRACT. 163 said : " When goods are forwarded by sea by a short coasting Sect. 32. voyage, it is peculiarly the positive duty of the seller to give instant notice of the shipment, so that the purchaser may have every possible opportunity of effecting a valid insurance on them if he is so disposed." ^ The case of Hastie v. Campbell^ (1857) serves further HastUv. to define the seller's duty, and is interesting because of the '^«™^*'"- disturbing element of the electric telegraph which, while it Notice by / is available to give earlier notice of despatch, may also *'^l'*g^*P^- ( prevent insurance by giving earlier intimation of ship- wreck. The goods were consigned to Glasgow, and were presented for shipment in a steamer in the Thames about three o'clock on a Saturday afternoon. The barge containing them had, however, to wait its turn, and it was half-past six o'clock before they were taken on board. At this hour the agents' counting-house was closed, the usual trade hours being from 10 a.m. till 6 P.M. The afternoon post for Glasgow closed at six, but a letter could have been posted at the General Post Office — distant 2\ miles from the wharf — up till 7.30 p.m. The next post for Glasgow was before business hours on Monday morning, and therefore notice of the shipment was not despatched till Monday afternoon, arriving on Tuesday morning about the same time as a telegraphic message announcing the loss of the steamer. Out of twenty-four similar shipments on previous occasions, the consignees had only insured one, and that had been done through the agency of the shippers. On these facts two out of three judges held there had been no negligence. The fact that the shippers were agents and not sellers was held to be of no importance, as the duties of each were in this matter identical.^ In reference to a suggestion that the agents ought to have made use of the telegraph, it was held that, in the absence of special instructions, no such duty was incumbent on them. But in their opinions, the' judges recognised the fact that the use of the telegraph, 1 16 D. at p. 1124. 2 19 -q_ 557, 3 "There is no difference between the duty incumbent on an agent, and the duty incumbent on any other shipper of goods." — Per Lord President M'Neill, 19 D. at p. 561. 164 SALE OF GOODS ACT 1893. Result of Scottish authorities. Sect. 32. which was then in its infancy, might become essential. " It is a mode of communication," said Lord President M'Neill, " which in matters of business, parties will probably be forced to resort to in order to avoid loss, and, once in general use, it may become a matter of duty to employ it." ^ From the foregoing review of the Scottish authorities, it will be seen that the seller's duty was fulfilled if he posted on the day of the shipment, a notice to the buyer con- taining the necessary particulars for insurance. The receipt of the notice in ordinary course might not be in time to permit of insurance, at least for the whole period of transit, yet the seller was absolved. The present sub-section seems Effect of Act. to impose a heavier duty on the seller. He " must give such notice to the buyer as will enable him to insure the goods during their sea transit." This may mean notice before shipment, of intention to ship on a certain day, but, more probably, it will be held to infer a resort to tele- graphic communication. Sect. 33. Risk whebb hoods are belivebed at DISTANT PLACE. 33. Where the seller ^"^ of goods ^"^ agrees to deliver^"' them at his own risk^''^ at a place other than^"^ that where they are when sold, the buyer ^"' must, nevertheless, unless otherwise agreed,^''^ take any risk of deterioration in the goods necessarily incident to the course of transit. ^'^ Notes. {a) "Seller," "buyer" "goods," "delivery." Defined Sect. 62 (1). (6) "Risk." The section refers to " specific " goods, in regard to which the property and the risk usually pass when the con- tract is made (Sect. 18, Rule 1 and Sect 20). 1 19 D. at p. 563. Lord Curriehill to the same effect says : "The inability of the consignees to effect insurance arose from the disturbing element of a natural agency which has lately been made available for the transmission of intelligence, but which, although it may probably be destined ere long to produce a great revolution in rules for transacting mercantile business, has not yet been recognised to this effect." — 19 D. at p. 565. As to responsi- bility for errors in the transmission of telegrams, see Verdin Brothers v. Mobertson (1871), 10 Maop. 35 ; J. and A. Brovm v. Law [1894], 72 L.T. N.S. 185 ; Affd. H.L. [1895], 11 Times Law Rep. 395. PERFORMANCE OF THE CONTRACT. 165 (c) "Place other than." The usual place of delivery is the Sect. 33. seller's place of business or residence, or the place where the goods are when sold [Sect. 29 (1)]. Here, the seller has agreed to deliver them elsewhere. (d) " Unless otherwise agreed." As to express agreement, etc., see Sect. 55. (e) " Transit." For its duration, see Sect. 45. Commentary. The rule here stated, forms one of the subsidiary changes Change in law introduced by the Act into the law of Scotland. The former law is thus stated by Bell : " "Where the bargain is to deliver the commodity at a particular place, the risk is with the seller till delivery at that place, so that if it perish on the voyage it is lost to the seller, and he cannot claim for the price." ^ The Scottish rule did not admit of the exception set forth in this section. In England, and now also in Scotland, the general risk Exception to of transit depends upon the passing of the property, which fS!'^^ may or may not be coincident with delivery. If the rule of this section is a legal effect of the want of delivery, it is clearly exceptional in cases where the property has passed, but it may perhaps be taken as a qualification of warranty, rather than of risk.^ A dealer who sells goods by descrip- tion warrants them to be of merchantable quality [Sect. 14 (2)], and as this warranty can only be applied when the goods are actually received by the buyer, it follows that the seller is responsible for any extraordinary or unusual deterioration in the course of the transit. But, in accord- ance with the section, if the deterioration is necessarily incident to the course of transit, the seller is not liable, 1 Bell's Com. i. 474. See Spence v. Ormiston (1687), Mor. 3153 ; Milfie and Co. v. Miller (1st February 1809), F.C. ; Henclcell Du Buisson arid Co. v. Swam, and Co. (1889), 17 Eet. 252. 2 In,5eerv. Walker (1877), 46 L.J. C.P. 677, the property and general risk must be held to have passed to the buyer at the oommencement of the transit, yet loss through deterioration in transit fell upon the seller. The goods were rabbits, — sound when delivered to a railway company in London, but unmerchantable when they reached the buyer, a retail dealer in Brighton. If the circumstances fall to be governed by this section the judgment seems to be overruled ; but the case may be explained as an instance of a cordition of merchantable quality on arrival [Sect. 14 (2)]. 1 66 SALE OF GOODS ACT 1893. Sect. 33. Bull V. Robison. Double en- quiry as to facts. and the implied warranty is therefore narrowed to this extent. The law of the section is founded on Bull v. Bdbison^ (1854), where Alderson, B., says: "A manu- facturer who contracts to deliver a manufactured article at a distant place must indeed stand the risk of any extra- ordinary or unusual deterioration, hut the vendee is bound to accept the article if only deteriorated to the extent that it is necessarily subject to, in its course of transit from the one place to the other." ^ The rule of the section is perhaps open to the objection that it may involve an enquiry as to the state of the .goods at both ends of the transit.^ Sect. 34. Butek's EIGHT OF EXAMINING THE GOODS. 34. — (1.) Where goods^"' are delivered to the buyer/"^ which he has not previously examined/''^ he is not deemed to have accepted ^"^ them unless and until he has had a reasonable opportunity® of examining them for the purpose of ascertaining whether they are in conformity with the contract/'^ (2.) Unless otherwise agreed/-''^ when the seller ^"^ tenders delivery ® of goods to the buyer, he is bound, on request, to afford the buyer a reasonable oppor- tunity ® of examining the goods for the purpose of ascertaining whether they are in conformity with the contract. ^'^ Notes. (a) "Goods," "delivery," "seller," "buyer." Defined Sect. 62 (1). (6) " Not previously examined." The delivery may be under (1) a "sale," or (2) an "agreement to sell" [Sect. 1 (3)]. In either case the goods may be bought by description, i.e. they 1 10 Ex. 32i. ^ 10 Ex. at p. 346. The seller need not now be a manufacturer if lie is a dealer. See Sect. 14 (2). ^ As in Dixon, Ltd. v. Jones, etc. (1884), 11 Ret. 739, where it was held that inferiority of quality on arrival at a home port is not conclusive of their condition at a foreign port, where by contract they were to be delivered. PERFORMANCE OF THE CONTRACT. 167 may be represented in the contract by -written or spoken Sect. 34. language, or they may be bought by means of that special kind of description called " sample." There is also a third alternative : they may be defined by being pointed out to the buyer in bulk, either with or without a sample. Where they are bought by "description" from a dealer there is an implied warranty of merchantable quality [Sect. 14 (2)], but this again is subject to the qualification that if the buyer has examined the goods and the examination ought to have revealed the defect, there is no warranty [Sect. 14 (2)]. The provision of the present section differs from the qualification referred to, in so far as it implies a duty of examination before acceptance, while Sect. 14 only pro- vides for the case of actual examination. Where under Sect. 14 the buyer accepts the goods without examination, it appears to be still within his power, at any time, to found upon a breach of warranty. AVTiere goods are bought by sample, the provision of this section as to " reasonable opportunity " is also practically contained in Sect. 15 (2) (6), and the implied condition that the goods are " free from any defect, rendering them unmerchantable," is qualified by the further provision that the defect must be such as " would not be apparent on reasonable examination of the sample" [Sect. 15 (2) (c)]. Where the goods are defined for the purposes of the contract, by being pointed out in bulk to the buyer, there may nevertheless be an express or implied term of the contract, conformity with which can only be ascertained by an examination on delivery, or before acceptance, in terms of the present section. (c) "Not deemed to have accepted." Acceptance implies such conduct on the part of the buyer as will preclude him from after- wards rejecting the goods as disconform to contract. Where it follows upon an " agreement to sell [Sect. 1 (3)], it is practically the buyer's assent to the seller's appropriation of the goods to the contract (Sect. 18, Eule 5). It is to be distinguished from " receipt," and also from " acceptance " in the sense of Sect. 4. See Com., Sect. 35 post, p. 169. The equity of the rule is obvious. A buyer " cannot be said to accept that he knows nothing of, otherwise it would make him the acceptor of whatever the vendor chose to send him ; whereas he has a right to see whether, in his judgment, the goods sent correspond with the order." ^ (d) " Reasonable opportunity." See note (b) supra. Keasonable " opportunity, like " reasonable time " (Sect. 56), is a question of 1 Per Alderson, B., in Hunt v. HecM (1853), 8 Ex. 814 at p. 817. See also Ishei-wood v. WTiUmore (1843), 11 M. & W. 347.— Per Parke, B., at p. 350, quoted ^osi, p. 170, note. i68 SALE OF GOODS ACT 1893. Sect. 34. fact. What is reasonable depends on the circumstances of each case. Thus it may be necessary to make the examination at ■ 'the time and place of delivery,^ or at some other time or place contemplated by the contract, either before or after delivery.^ (e) " Conformity with the contract." " Contract of sale includes an agreement to sell as well as a sale'' [Sect. 62 (1)]. See also Sect. 1 (3). (/) " Unless otherwise agreed." See Sect. 55. Sect. 35. 35. The buyer ^"^ is deemed to have accepted <'' the goods ^"^ when he intimates to the seller ^°^ that he has accepted them, or when the goods have been delivered ^"^ to him, and he does any act in relation to them which is inconsistent with the ownership ^^ of the seller,^''' or when after the lapse of a reasonable time,^'^ he retains the goods without intimating to the seller ^'^ that he has rejected them. Notes. (a) " Seller," " luyer" " goods" " delivery." Defined Sect. 62 (!)■ (5) "Accepted." See note (c), Sect. 34 ante, p. 167, and Com. infra, p. 169. (c) " Intimates " to the seller. It will be observed that out of three modes of acceptance, two depend on express notice to the seller. The third is any act on the part of the buyer inconsist- ent with the seller's ownership. ((f) " Inconsistent with the ownership." Breaking bulk to a reasonable extent, or even a certain amount of use, is not necessarily inconsistent with the seller's ownership, provided the goods are of such a nature that disconformity to contract cannot be other- wise discovered.^ Com. infra, 'p. 170. (e) " Reasonable time is a question of fact." Sect. 56. 1 FerJdns v. Bell (1892), 62 L.J. Q.B. 91. 2 Lorymer v. Smith (1822), 1 B. & C. 1 ; EeilbuU v. Hickson (1872), L.R. 7 C.P. 438 ; Grimoldbyv. Wells (1875), L.R. 10 C.P. 391. " If the time of inspection as agreed on, be subsequent to the time agreed for the delivery of the goods, or if the place of inspection as agreed upon, be different from the place of delivery, the purchaser may, upon inspection at such time and place, . . . return them, then and there, on the hands of the seller." — Per Brett, J., in Eeilbutt v. Hickson, L.R. 7 C.P. at p. 456. /* Wallace v. RoUnson and Go. (1885), 22 S.L.R. 830. See also Lucy v. Moufflet (1860), 5 H. & N". 229. PERFORMANCE OF THE CONTRACT. 169 COMMEMTAEY. Seet. 35. " Acceptance " here, and in Sect. 34, has a different mean- Meaning of ing from "acceptance" in Sect. 4, which is technical, and " '■™^p*''"°^- does not apply to Scotland. In England goods might be accepted so as to elide Sect. 17 of the Statute of Prauds,^ and thus form a binding verbal contract for the sale of goods of the value of £10 or upwards ; yet they might not be accepted as performance of the contract. In Morton, v. Tilhett^ (1850), Lord Campbell, in delivering the judgment of the Court, said : " We are of opinion that there may be an acceptance and receipt within the meaning of the Statute of Frauds, without the buyer himself having examined the goods, or done anything to preclude him from contending that they do not correspond with the contract. The accept- ance to let in parol evidence of the contract, appears to us to be a different acceptance from that which affords con- clusive evidence of the contract having been fulfilled." ^ Again, " acceptance " must be distinguished from mere Distinguished receipt. "When goods are sent to a buyer in performance froni_"re- of the vendor's contract, the buyer is not precluded from '^^^^ ' objecting to them by merely receiving them, for receipt is one thing and acceptance another. But receipt will become acceptance if the right of rejection is not exercised within a reasonable time, or if any act be done by the buyer which he would have no right to do unless he were the owner of the goods." * Goods may be received by a carrier on behalf of Receipt by the buyer, but it is obvious that a carrier cannot take upon <=a™8r. himself the responsibility of accepting them, so as to preclude ^ Repealed by this Act, but re-enaoted by Sect. 4. 2 19 L.J. Q.B. 382, and 15 Q.B. 428. ^ 19 L.J. Q.B. at p. 385. This judgment was afterwards doubted, but, still later, it was approved, and the law is now established. "There must be an acceptance and an actual receipt ; no absolute acceptance, but an acceptance which could not have been macfe, except on admission of the contract, and that the goods were sent under it. I am of opinion there was a sufficient accept- ance under the Statute of Frauds, although there was (still) a power of rejec- tion."— Per Brett, L.J., in Mbble v. Gough (1878), 38 L.T. N.S. 204 at p. 206. See also Blackburn, part i. chap. 2 ; Benjamin, book i. chap. 4. ^ Benjamin, p. 711. See Abbott v. Wolsey (1895), 11 Times Law Rep. 414, where the buyer having examined the goods and taken a sample was held to have accepted them in terms of Sect. 4 (3). 170 SALE OP GOODS ACT 1893. Sect. 35. Examination before accept- ance. Wallmx V. Robinsm. I the buyer from objecting that they are not conform to contract. So also the buyer himself is entitled, before acceptance, to " a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract." -^ He is not bound to accept goods tendered to him in closed casks which he is not allowed to open,^ nor to attend at a particular place after sunset,^ nor to select the contract goods out of a larger quantity or a mixed lot sent him by the seller.* The case of Wallace and Brown v. Bohinson, Fleming, and Co!" (1885) illustrates the extent and limits of the buyer's duty of giving notice of rejection, and also the effect of breaking bulk as an act inconsistent with the ownership of the seller. The goods consisted of a cargo of 615 logs of wood consigned by the seller in Dantzic to the buyers in Arbroath. The ship arrived on 14th June, and the discharge was completed on 26 th June. While the ship was dis- charging, the buyer sold 11 logs from the ship's side, but these being used for a special purpose for which they were suited, disconformity to contract was not then discovered. He subsequently cut up in his yard 13 other logs to fulfil an order, and finding them disconform to contract, he caused a large number more to be chipped in order to ascertain their condition. On 3rd July he wrote to the seller's agents in London rejecting the cargo. The disconformity to contract was admitted, but it was urged that the buyer's notice of rejection was not timeous, and that by cutting up part of the cargo and selling another part, he had broken bulk, and was thus, at the date of the notice of rejection, 1 Sect. 34. 2 " A tender of goods does not mean a delivery or olfer of packages con- taining thera, but an offer of those packages under such circumstances that the person who is to pay for the goods shall have an opportunity afforded him, before he is called on to part with his money, of seeing that those presented for his acceptance are in reality those for which he has bargained." — Per Parke, B., in Isherwood v. WTiiimore (1843), 11 M. & W. 347 at p. 350. ' " Where a thing is to be done anywhere, a tender at a convenient time before midnight is sufficient ; where the thing is to be done at a particular place, and where the law implies a duty on the party to whom the thing is to be done to attend, that attendance is to be by daylight and a convenient time before sunset." — Per Parke, B., in Startup v. Macdonald (1843), 6 M. & G. 593 at p. 623. ^ Sect. 30. 5 22 S.L.R. 830. PERFORMANCE OF THE CONTRACT. 171 unable to restore the cargo in forma specifica. The Court Sect. 35. unanimously repelled both pleas.^ There is at least an analogy between the conditions Negation of which qualify acceptance as set forth in this section, and the ^"^^^ °^ ^'l^P*' conditions attached to the buyer's right of rejection in right of rejec- Scotland reserved by Sects. 11 (2) and 53 (5). But Lord *'™- Chelmsford points out a distinction between the law of Suggested England and Scotland in regard to acceptance and non- ^^t*^e^'°aw acceptance (rejection), which is of some importance in this of England connection. " In England if goods are sold by sample,' and '''"^ Scotland, they are delivered and acc&pted by the purchaser, the pur- chaser cannot return them ; but if he has not completely accepted them, that is, if he has taken the delivery condi- tionally, he has a right to keep the goods a sufi&cient time to enable him to give them a fair trial, and then, if they are found not to correspond with the sample, he is entitled to return them. As I understand the law of Scotland, although the goods have been accepted by the purchaser, yet if he finds that they do not correspond with the sample, he has an absolute right to return them." ^ Although delivery and acceptance are concurrent condi- tions, the buyer is entitled to retain the goods for a reason- able time after delivery to ascertain whether they are in conformity with the contract (Sect. 34). This is a condi- tional acceptance in terms of Lord Chelmsford's dictum, and it was also a condition attaching to acceptance according to the former law of Scotland, so that perhaps the suggested distinction between the laws of the two countries is more theoretical than real. ^ Lord Trayner (Ordinary) said: "I regard this as timeous rejection. A purchaser is entitled to a reasonable time to examine the goods delivered to him, and in this case I cannot see that there was any unreasonable delay. In regard to the other plea, I do not think there was breaking of bulk in the . legal sense so as to bar objection, nor was there any act of ownership of the kind which would bar rejection, if rejection was otherwise warranted. . . . I think the buyers were entitled to rely upon the goods delivered to them being conform to contract, and to proceed to cut them up to fulfil the order they had "—22 S.L.R. at p. 832. ^ The case under consideration was one of sale by sample, but the principle applies equally to any executory sale. ' In Couston, Thomson, and Co. v. Chapman (1872), 10 Maop. H.L. 74 at p. 80. 172 SALE OF GOOQS ACT 1893. Sect. 35. Timeons notice. The intimation to the seller of the buyer's intention to ' reject must be given within a reasonable time. It is to be observed that Sect. 11 (2), while providing for rejection within a " reasonable time," is silent as to notice to the seller, but as the circumstances are the same in each case, the enactment of this section wiU form a supplement to the other provision.'' Sect. 36. Buyer not BOUND TO RETURN RE- JECTED GOODS. 36. Unless otherwise agreed,^"' where goods are delivered '•^^ to the buyer/"^ and he refuses to accept ^^ them, having the right so to do/*^ he is not bound to return them to the seller,^"' but it is sufl&cient if he intimates to the seller^'''^ that he refuses to accept^"*^ them. Notes. As to express agreement, see Eules as to delivery, (a) " Unless othenuise agreed." Sect. 55. (6) "Delivery." Defined Sect. 62 (1). Sect. 29. (c) " Seller," " buyer." Defined Sect. 62 (1). (d) " Refuses to accept." In other words, " rejects,'' e.g. under Sect. 11 (2). See also Sect. 35, and Com. ante, p. 171. (e) " Having the right so to do." As where the seller is in breach of contract [Sect. 11 (2)]. If the rejection is wrongful, the buyer has not only no duty, but has no right to return the goods. (/) "Intimates to the seller." No formal notice is necessary. Any unequivocal act of the buyer signifying rejection, and made known to the seller, will be sufficient.^ But the notice of rejec- tion, if not accompanied by an offer to return, must not be inconsistent with such an offer. Thus notice of rejection, accompanied by an intimation that the seller will not be allowed to remove the goods till they are replaced by others, will not be effectual.^ Nor will notice of rejection serve its purpose if the buyer does not continue to act as a mere custodier. Where, ' As to what constitutes timeous notice see Com., Sect. 11 ante, p. 54, and Note (/), Sect. 36. 2 Gnmoldby v. JVells{lS75), L.R. 10 C.P. 391,— Per Brett, J., at p. 395. See Com. mfra, p. 173. 3 Jardinev. Pendreigh (1869), 6 S.L.E. 272. PERFORMANCE OF THE CONTRACT. 173 R.g., after intimation and actual storage of the goods, the buyer Sect. 36. takes part of them out of the warehouse and sells or consumes them, he will be held liable for the price of the whole.^ COMMENTAKY. The former law of Scotland on the subject of this Former law of section was not well defined, but its tendency was to im- Scotland. pose a duty upon the buyer of returning rejected goods to the seller, or at least of offering to return them.^ In many cases, however, the word " return " meant no more than notice to the seller that the goods were rejected, and an intimation, express or implied, that they lay at his disposal. The Institutional writers state that the goods must be " offered hack" ^ but do not suggest any further active steps on the part of the buyer. BeU, after stating that the buyer must make his challenge instantly, proceeds to say that " where goods are rejected at a distance from the seller's residence, and where he has no agent, the buyer must act fairly for the seller's interest on the principles of negotiorum gestio." * This is simply another mode of stating that the buyer acts as an involuntary bailee or custodier for the seller, as under the present section.^ M. P. Brown says that " the thing sold must be returned in due time by the vendee," ^ but this may be taken to be a loose expression, implying notice to the seller that the goods are his, and that he will receive them on application.'^ On the other hand, a rule has been laid down, especially Neutral in sales of horses, that the buyer's duty does not end with °"^ ° ^'' mere notice. In M'Bey v. Gardiner^ (1858), Lord Cowan 1 Eolh V. GruiksMnk (1840), 2 D. 988 ; Raman v. Mitchell (1845), 7 D. 813. 2 See, e.g., Webster v. Thomson (1830), 8 Sh. 528. 5 Stair, i. 10. 15 ; Ersk. iii. 3. 10 ; Bank. i. 19. 2. * Bell's Com. i. 464 ; Frin., Sect. 99. ^ As to' the risk in such a case see Sect. 20. 8 M. P. Brown on Sale, p. 309. 7 " The right of the seller is, that if the goods when tendered are not taken in implement of the contract, they remain the property of the seller, must be at his command and disposal, and so must be instantly sent back or held only for him." — Per Lord Justice-Clerk Hope in Padgett v. M'Nair (1852), 15 D. 76 at p. 79. See also Jowitt v. Stead (1860), 22 D. 1400. 8 20 D. 1151. 174 SALE OF GOODS ACT 1893. Sect. 36. stated the rule thus : " The pursuer contends that having given notice of the unsoundness and of his intention to return the horse, he had no duty beyond keeping it properly. . . . But, when the purchaser has given notice, and the seller has denied the existence of the alleged unsoundness and refused to take back the animal, it appears to me to be the duty of the purchaser to place it in neutral custody until the authority of the Court is obtained for its sale." -^ Judg- ment was given against the buyer on the ground that, although he had given timeous notice, he had not placed the horse in neutral custody, and had allowed nearly two months to elapse before he applied for a judicial warrant to sell. In Caledonian By. Go. y. Banldn^ (1882), Lord Justice-Clerk Moncreiff said : " When a purchaser holds that an article is disconform to warranty, or is not the article which he was led to believe it to be, he is bound, instead of keeping it in his own custody, to put it into neutral custody if the seller refuses to take it back ; for he is bound to tender it back, and if the seller refuses to take it, he is not entitled to expose it to any risk which it might suffer in his custody."^ Lord Young, in the same case, took a less extreme view. He said : " The matter of neutral custody is itself one of circum- stances. ... So far as the character or class of the goods is concerned, neutral custody would not be required in the case of plate, pictures, or books. It might be in the case of wine, but on the whole it is a question of circumstances, more having to be regarded than merely the nature of the article."* In this case, although a horse had been kept by the buyer for six weeks after notice of rejection, during which time correspondence and negotiations had been going on between the parties, the buyer was held not to have neglected any duty.* The most authoritative utterance in the law of Scotland on the subject of the buyer's duty, is the House of Lords ' 20 D. at p. 1153. As to the supposed necessity for obtaining judicial sanction to the sale see Com., Sect. Zl post, p. 178. 2 10 Ret. 63. 3 10 Ret. at p. 65. * 10 Ret. at p. 67. ^ The result of the judgment in JRobson v. Thomson (1864), 2 Macp. 593, so far as regards the question of neutral custody, was to the same effect. PERFORMANCE OF THE CONTRACT. 175 judgment in Couston, Thomson, and Co. v. Chapman^ (1872), Sect. 36. where the huyer was held to have lost his right to reject, by delaying any offer of return until litigation had com- menced. It will be observed that in this ease there is no reference to any obligation on the part of the buyer to place the goods in neutral custody, or to apply for a judicial warrant to sell. On the question of the supposed obligation to return the goods to the seller. Lord Chelmsford says : " Where a party desires to rescind a purchase upon the ground that the quality of the article sold does not corre- spond with that which it professes to be or with the sample upon which it was sold, it is his duty to make a clear and distinct offer to return, or in fact to return the goods, by stating to the vendor that the goods are at his risk, that they no longer belong to the purchaser, that he rejects them, that he throws them back upon the vendor's hands, and that the contract is thereby rescinded."^ In the subsequent English English law as case, Grimoldhy v. Wells ^ (1875), the Court explained Lord ° "^"J®" '°°- Chelmsford's meaning in the above-cited passage to be, not that the buyer was bound to return, or to offer to return, the goods, but that he might have effectually declared his intention of rejecting them in either of these ways. In the case last referred to, Brett, J., stated the law of England \ thus : " The buyer may, in fact, return the goods, or offer to \ return them, but it is sufficient, and the more usual course is, j to signify his rejection of them by stating that the goods are I not according to contract, and that they are at the vendor's I risk. No particular form is essential ; it is sufficient if he does any unequivocal act showing that he rejects them"* Any doubt as to the buyer's duty in regard to rejected Effect of the goods seems removed by the terms of the section. If the seller chooses to disregard the intimation of rejection, and such rejection is justified, the property and the risk remain with him, subject, however, to the buyer's duty as custodier in terms of Sect. 20. It is clear, therefore, that it is no part of the buyer's duty to place the goods in neutral custody. 1 10 Maop. H.L. 74. ^ xo Macp. H.L. at p. 81. » L.R. 10 C.P. 391. " L.R. 10 C.P. at p. 395. See also Lucy v. Moufflet (1860), 5 H. & N. 229 ; Heilbutt v. Hiclcsmi (1872), L.R. 7 C.P. 438. 176 SALE OF GOODS ACT 1893. Sect. 36. If the buyer rightly rejects goods, but continues to take the care and custody of them on behalf of the seller, he will, no doubt, be entitled to make a reasonable charge similar to that allowed to the seller upon the buyer's default in terms of the immediately succeeding section.-' Sect. 37. Liability of buyer for neglecting ob refusing delivery of GOODS. 37. When the seller ^"^ is ready and willing to deliver the goods/"^ and requests the buyer ^"^ to take delivery j^"^ and the buyer does not within a reasonable time ^'^ after such request take delivery of the goods, he is liable to the seller for any loss ^"^ occasioned by his neglect or refusal to take delivery/''^ and also for a reasonable charge for the care and custody ^'^ of the goods. Provided that nothing in this section shall affect the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract. ^■''^ Notes. (a) " Seller," " buyer," " goods," " delivery" Defined Sect. 62 (5) " A ' reasonable time ' is a question of fact." Sect. 56. The seller is also allowed a reasonable time for giving delivery.^ (c) Loss through buyer's neglect or refusal. This will include the accidental loss of the goods themselves. The delivery has been delayed through the "fault"* of the buyer, and therefore the goods are at his risk. Sect. 20. (d) " Take delivery." " It is the duty of the seller to deliver the goods " (Sect. 27). The corresponding duty of the buyer is to "accept" the goods (Sect. 27), which necessarily includes taking delivery. («) " Care and custody." As bailee or custodier of the goods of the other party. (See Sect. 20). There is no express provision for the corresponding case of goods properly rejected by the 1 Sect. 37. See Forbes v. Gamplell (1885), 12 Ret. 1265. 3 " Fault " defined Sect. 62 (1). PERFORMANCE OF THE CONTRACT. 177 buyer, and kept by him. for the seller, but a right to make a Sect. 37. reasonable charge is no doubt implied. See Com., Sect. 36 ante, p. 176. The right of the seller here expressed is personal, and the remedy seems to fall under Sect. 57 rather than under Sect 50(1). (/) " Bepudiation of the contract." Sect. 11 (2) gives the buyer a right to repudiate in the event of a breach of contract by the seller. This proviso reserves the seller's rights in the event of the repudiation being unwarranted. COMMENTAKY. Under this section, the buyer in default is liable to the seller (1) for actual loss sustained, (2) for a reasonable charge for care and custody. Eeimbursement of the loss susta.ined follows naturally Eeimtarse- from a breach of the buyer's duty as set forth in Sect. 27.^ '^™* °^ ^°^^- The law of Scotland before the Act did not differ in this respect from that of England. The seller's rights and duties as custodier of the goods Charge for depended, prior to the Act, upon a different principle in ^^'^!^°'^_ Scotland from that recognised in England. In Scotland, Former'iaw where the seller sued for the price, it was a condition of his "^ Scotland. right that he was able to give delivery of the goods in such a state as to be fulfilment of the contract. Careful custody was therefore necessary to preserve his claim if he chose to put it in that form. On the other hand, the goods were his own so long as he held possession, and, if he adopted the alternative of re-selling and claiming damages, the buyer could interpose no right of property, or in any way restrain his action as proprietor. But in England the seller's duty English law. as to custody differed according as the property had, or had not, passed to the buyer. In the latter case, the seller could only sue for the price in certain exceptional circumstances,^ and his duty, therefore, was not custody for the purpose of being enabled to fulfil the counterpart of the obligation, but judicious re-sale if that was possible, and if not, then such other disposal of the goods as would minimise his claim of ■' Such loss may be recovered as damages under Sect. 60 (1 ). 2 See Sect. 49 (2) of the Act. 178 SALE OF GOODS ACT 1893. Sect. 37. Divergent principles, but practice similar. Remuneration for care and custody. damages. If, again, the property had passed, the seller held possession as involuntary bailee or custodier of the goods of another (viz. the buyer), and his duty did not extend beyond ordinary dUigence for safe keeping. These divergent prin- ciples did not, however, lead to any essential difference in practice. It may be said that in Scotland before the Act, neutral custody of the goods was insisted upon, and that a judicial warrant for re-sale was by some text-writers deemed essential or at least highly expedient. It may, however, be doubted if these requirements really formed part of the law of Scotland. They seem alien to the Scottish principle of continued ownership in the seller, and though they were much more closely allied to the English principle of passed property they had no counterpart in English practice.^ There is no clear authority even under the former law of Scotland for the course suggested by BelP of applying for judicial authority to sell, or for imposing a penalty on a party selling without judicial sanction.^ The subject of neutral custody has already been discussed. Com., Sect. 36 aide, p. 173. The general rule of the section as to remuneration for care and custody was adopted in the common law of Scot- land chiefly on English authority. " If," says M. P. Brown, " the vendee fails to take away the thing sold in due time, he will be liable to the vendor for warehouse rent or other expenses attending the keeping of it."* The authority 1 " If the defendant intended to repudiate the contract he ought to have given the plaintiff distinct notice at once that he repudiated the goods, and that, on such a day, he vfould sell them hy such a person, for the benefit of the plaintiffs. The plaintiffs could then have called on the auctioneer for the proceeds of the sale." — Per Lord Abinger in Chapman y. Morton (1843), 11 M. & W. 534 at p. 539. 2 Bell on SaU, p. 109. ' In Gardiner v. M'Leavy (1880), 7 Ret. 612, the interlocutor of Court expressly bore that the buyer "was entitled, after notice, to sell." There was no suggestion of a judicial warrant being required, though in point of fact one had been obtained in the Sheriff Court from which the case came on M. P. Brown on SaU, p. 354 ; see also p. 347. Pothier makes a similar statement : " C'est une des obligations qui naissent de la nature du contrat, que celle que oontracte I'aoheteur d'enlever les marchandises qui lui ont dt^ vendues. Lorsque, par une sommatiou judiciaire, il a kti mis en demeure de satisfaire k cette obligation, il est tenu des dommages et int&Sts que le vendeur a soufferts depuis la sommation, par la privation de I'usase de PERFORMANCE OF THE CONTRACT. 179 cited is the English case Greaves v. AsJilin^ (1813), where Sect. 37. Lord Ellenhorough said : '' If the buyer does not carry away the goods bought within a reasonable time, the seller may charge him warehouse room ; or he may bring an action for not removing them should he be prejudiced by the delay." '■^ The law of Scotland is now, by the Act, assimilated to that of England. In the circumstances of this section the property will in most cases be held to have passed to the buyer,^ and therefore, the seller's duty as custodier will be much the same as that of the buyer under Sect. 36. ses magasins, greniers, caves et celliers qu'occupaient les marchandises vendues." — VerUe, 290. The rule was followed in the SherifiF Court case — Wilson, Bonald, wnd Co. v. Curie, Robertson, and Co. (1884), Guthrie's Sel Cas. 2nd ser. 506. ^ 3 Camp. 426. ^ Bell makes a similar statement as to the law of Scotland, and also founds on Greaves v. Ashlin {SaZe, p. 109). 2 At least the risk has passed under Sect. 20. DEFINED. PAET IV. EIGHTS OF UNPAID SELLEE AGAINST THE GOODS. Sect. 38. 38. — (1.) The seller ^"^ of goods is deemed to be an SELLER " unpaid seller" within the meaning of this Act — (a.) When the whole of the price ^''^ has not been paid or tendered ^"^ ; (b.) When a bill of exchange or other negotiable instrument ^''^ has been received as conditional payment,® and the condition on which it was received has not been fulfilled by reason of the dishonour ^ of the instrument or other- wise.^^ (2.) In this part of this Act the term " seller "("^ includes any person who is in the position of a seller, as, for instance, an agent of the seller ^''^ to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price. Notes. (a) " Seller." Defined Sect. 62 (1). By the present section the usual definition is extended as regards Part IV. of the Act, so as to include persons in the position of a seller. RIGHTS OF UNPAID SELLER AGAINST GOODS. i8i (6) " WTwle price." As to price generally, see Sects. 8 and 9. Sect. 38. A partial payment of the price has no effect on the seller's rights against the goods. (c) " Paid or tendered." See as to legal tender Com., Sect. 8 ante, p. 41. {d) " Negotiable instrument " for the purpose of payment must be either a bill, a promissory note, or a cheque. As to negotia- tion of these instruments see Bills of Exchange Act 1882,^ Sects. 31, 89, and 73. Bills of lading at common law and under the Bills of Lading Act 1855,^ and "documents of title" under the Factors Act 1889 * are to a certain extent negotiable, but the nature of these documents precludes their use as a form of pay- ment. See Com., Sect. 25 ante, p. 126. (e) " Conditional payment." At common law payment by bill is only conditional payment, unless where there is novation. If the biU is not paid at maturity it does not operate as a discharge of the counter obligation in the contract.* In construing the terms of a deed or instrument, the word "payment" is not always equivalent to "payment in satisfaction and discharge."^ In other words, the payment may be conditional, as in the case supposed of a bill afterwards dishonoured.® (/) "Dishonmr" of bill. See Bills of Exchange Act 1882,^ Sect. 47. (g) " Or otherwise." The non-fulfilment of the condition may arise from the buyer's insolvency during the currency of the bill, and before actual dishonour. Qh) " Agent of the seller." The general law of principal and agent is reserved by Sect. 61 (2). The sub-section specifies two kinds of agents, viz. (1) an agent holding an indorsed bill of lading,^ and (2) an agent paying, or making himself directly 1 45 & 46 Vict. 0. 61. ^ jg & 19 Vict. c. 111. 3 52 & 53 Vict. c. 45. ^ Anderson v. M'Dowal (1865), 3 Macp. 727. " Per Tindal, C. J., in Maillard v. The Diihe of Argyle (1843), 6 M. & G. 40. But see Purnell v. Shannon (1894), 22 Ket. 74, especially opinion of Lord Adam at p. 78. ' " The law is clear that if in payment of a debt the creditor is content to take a bill or note payable at a future day, he cannot legally commence an action on his original debt until such bill or note becomes payable and default is made in the payment ; but if such bill or note is of no value, as if, for ex- ample, drawn on a person who has no effects of the drawer in his hands, and who therefore refuses to accept it, in such a case he may consider it as waste- paper, and resort to his original demand and sue the debtor." — Per Lord Kenyon in Stednum v. Oooeh (1793), 1 Esp. 5. 7 45 & 46 Vict. c. 61. 8 The case of an agent, who is also indorsee of a bill of lading, receives illustration from Morison v. Gray (1824), 2 Bing. 260, and also from Sect. 1 of the Bills of Lading Act 1855 (18 & 19 Vict. c. 111). 1 82 SALE OF GOODS ACT 1893. Sect. 38. responsible for, the price. But these are not meant to exhaust the cases of persons in the position of a seller, e.g. a principal consigning goods to a factor. ^ Commentary. Effect of first sub-seotion. Payment by bill, etc. Part IV. of the Act (commencing with this section) sets Iforth certain exceptions to the rule that the buyer's right ' to the possession of the goods follows his right of property in them. These exceptions are based upon a breach by the buyer of his obhgation to pay the price, and accordingly this section is devoted to a definition of an '' unpaid seller." The effect of the first sub-section is that neither a partial payment, nor a conditional payment, operates to take the vendor out of the category of an unpaid seller. The whole of the price must be unconditionally paid or tendered.^ " When the purchaser becomes insolvent . . . the seller (notwithstand- ing he may have agreed to allow credit for the goods) is not bound to deliver any more goods under the contract until the price of the goods not yet delivered is tendered to him ; and if a debt is due to him for goods already delivered, he is entitled to refuse to deliver any more till he is paid the debt due for those already delivered." * Payment by bill, note, or cheque may be absolute or conditional. It is absolute where the seller negotiates the bill without rendering himself liable,* and, where the bill is that of some third person, the buyer may be free from further liability on the principle of delegation.^ In the case of a third party's bill, if the buyer's name is not attached, the seller must not only prove its dishonour, but he must show that he has used due diligence to obtain pay- ' Kinloch v. Oraig (1790), 3 T.R. 119, 783 ; Newsom v. Thornton (1805), 6 East 17. 2 Melrose v. Sastie (1851), 13 D. 880, 14 D. 268. ' Per Mellish, L. J., in Ex parte Chalmers (1873), L.R. 8 Ch. App. 289 at p. 291. See Blackburn, p. 326 et seq. « Bunney v. Pmjntz (1833), 1 B. & Ad. 568. 5 Bell's Prin. Sect. 577. But see Anderson v. M'Dowal (1865), 3 Macp. 727. conditional payment. RIGHTS OF UNPAID SELLER AGAINST GOODS. 183 ment and to preserve the buyer's rights against other parties Sect. 38. to the instrument.^ In the ordinary case, however, and in the absence of any Usually a agreement, express or implied, to the contrary, payment by bill is conditional, and the seller's right to the price revives on the biU being dishonoured.^ The second sub-section expresses the rule established in Sub-sect. (2). regard to stoppage in transitu by Feise v. Wray^ (1802). ■^««'«''- w^»'«3'- The right to stop in transit is not an adjunct of lien, but is ( a right peculiar to the seller of goods. Hence, although) many other persons have liens over goods in their possession, none but a seller can follow the goods of another after the actual custody has been lost. But among sellers are classed consignors and agents in the position of sellers. Thus in Feise v. Wray * the right was held to exist in favour of an agent who had bought goods on his own credit, but on the order of a principal to whom he consigned them, and who became bankrupt during the transit. 39. — (1.) Subject to the provisions .of this Act,^"^ Sect. 39. and of any statute in that behalf, ^''^ notwithstanding unpaid •' ° SELLERS that the property in the goods may have passed to biqhts. the buyer,^"^ the unpaid seller ^'^ of goods, as such, has by implication of law ^'^ — • (a.) A lien^-'^^ on the goods or right to retain them ^^^ for the price ^''^ while he is in pos- session ^*^ of them ; ' Gamidge v. AUenby (1827), 6 B. & C. 373 ; Guardians of Lichfield v. Green (1857), 1 H. & N. 884 ; Smith v. Mercer (1867), L.R. 3 Ex. 51. ^ Benjamin, p. 733. Gunn v. Bolckow, Faughan, and Co. (1875), 10 Ch. App. 491 ; Currie v. Misa (1875), L.R. 10 Ex. 153. "It appears to be settled ill England that a cheque or bill accepted, although it be not absolute payment, is conditional payment ; the condition being that it shall become absolute payment when honoured, and that, on the other hand, the debt shall revive if the cheque be not honoured. I do not know that that principle has been expressed in any Scotch judgment, but I think that I ought on such a point to follow the Engli.sh authorities, there being, so far as I know, nothing repugnant in our own decisions. " — Per Lord Kincairney (Ordinary) in Mac- dougall v. M'Nab (1893), 21 Eet. 144 at p. 147. ' 3 East 93. '' Cit. sup. SALE OF GOODS ACT 1893. Sect. 39. (&.) In case of the insolvency <^' of the buyer /"^^ a right of stopping the goods in transitu ^''^^ after he has parted with the possession of them ; (c.) A right of re-sale as limited by this Act.® (2.) Where the property in goods has not passed to the buyer /™^ the unpaid seller ^"^ has, in addition to his other remedies/"^ a right of withholding delivery similar to and coextensive with his rights of lien and stoppage in transitu where the property has passed to the buyer. ^^^ Notes. (a) There are various modifying provisions in the immedi- ately following sections, e.g. Sect. 43, and the proviso attached to Sect. 47. (&) E.g. The Factors Act 1889,i particularly Sect. 10, which is reproduced and extended by the proviso attached to Sect. 47 of this Act. See also Bills of Lading Act 1855.^ (c) See Sects. 17 and 18. (d) "Seller," "buyer." Defined Sect. 62 (1). "Unpaid seller." Defined Sect. 38. («) "Implication of law" may be negatived or varied by express agreement, course of dealing, or usage. Sect. 55. (/) « lAen." See Sects. 41 to 43. (g) "Bight to retain them." See note (0) infra and Com. infra, p. 186. Qi) " Price." See Sects. 8 and 9. (i) "Possession" is not defined in this Act, but see Factors Act 1889, Sect. 1 (2).^ As between vendor and vendee the word possession "is used in a narrower and more restricted sense than in the general technical and legal import of the word, and yet in a more extended sense than its popular meaning. For in general, in technical language, one is said to be possessed of goods when he has the property, and an immediate right to 1 52 & 53 Vict. 0. 45. Text in Appendix I. post, p. 296. 2 18 & 19 Vict. c. 111. Text in Appendix I. post, p. 293. ' Text in Appendix I. post, p. 297. RIGHTS OF UNPAID SELLER AGAINST GOODS. 185 have the goods dealt with as he will ; yet, a purchaser on credit Sect. 39. of a specific chattel, who has the property, and whilst solvent, the right to deal with the goods as he will, though they remain in the vendor's hands, and who, therefore, in general legal language, may be called possessed of them, has never had such possession as will determine the vendor's rights in case the pur- chaser becomes insolvent. And yet, circumstances far short of an actual delivery into the hands of the purchaser, amount to such a constructive possession as is sufficient to render the pur- chaser's property indefeasible." ^ (;■) , " Insolvency" See Sect. 62 (3). (^) " Stoppage in transitu." See Sects. 44 to 46. {T) " Resale " and its limitations. See Sects. 47 and 48. (m) Property not passed. See Sect. 18, Rules 2 to 5. (m) " Unpaid seller." See Sect. 38. (0) " In addition to his other remedies." Where the property has not passed "the owner may in defiance of his contract, sell to some third person and give him a perfectly good title." ^ This right is more extensive than the right of re-sale provided by this section, and expanded by Sects. 47 and 48, and it is therefore one of the " other remedies " here reserved. The seller's right where the property has not passed, is exactly the same as the right of " retention " formerly existing in Scotland in all cases before delivery. It is only where the property has not passed that the word "retention" can stiU be properly applied in Scotland. Where the property has passed, the seller can have no more than a "lien" as in England. See Com. infra, p. 186. {p) " Coextensive with his rights of lien and stoppage in transitu." But the seller, in the circumstances supposed, has also a more extensive right. See note (0) supra. It is clear that the seller can withhold delivery although the buyer is solvent, if he is in default. Further, his power to retain is not confined to the price merely, as in a case where the property has passed. He can refuse to deliver so long as any debt is due to him by the buyer. COMMENTAEY. This section states generally the three rights of the seller against the goods, viz. lien, stoppage in transitu, and re-sale. Each of these is expanded in the following sections. ^ Blackburn on Scde, pp. 333, 334. « Blackburn on Sale, p. 244. 1 86 SALE OF GOODS ACT 1893. Sect. 39. "Riglitto retain." — Misapplica- tion of word "retention." The words " or right to retain " were introduced at an early stage of the adaptation of the Bill to Scotland, but they seem unnecessary, and may possibly lead to mis- apprehension. In Scots law, " retention " has long been applied to the right of an owner of moveable property to retain it, not- withstanding a personal obligation to transfer to another. Retention is, in substance, the right of the undivested owner to refuse implement of his contract until the counterpart is fulfilled,^ and, therefore, in sale, it is appKed exclusively to the right of the seller to detain res sua, against one who has only a jus ad rem. " Lien," on the other hand, is used to signify a right depending on possession of res aliened, and in this sense it is common to the law of England and ^ Eetention is sometimes applied in a much wider sense, and the right has been said to belong to ' ' every legal possessor of a subject till all the debts due to him by the proprietor are paid." See exhaustive argument on the subject in report by Robert Bell of the case of Harper's Creditors v. Faulds (1791), Bell's Cases, 8vo, pp. 440 et seg. It was claimed in this case by a bleacher in respect of a general balance, but by a narrow majority, the claim was negatived. The view referred to was thus expressed by Lord Monboddo : ' ' Compensation and retention are the same in principle ; the ground of equity is this, that a person is not obliged to pay a debt while the creditor is at the same time due something to him. If the claims be of the same nature it is called compensation ; if diflferent it gets the name of retention " — Bell's Cases, 8vo at p. 467. See also Br of goods <^) becomes insolvent, («> the ^Xqeh unpaid seller ^^'^ who has parted with the possession <'^ transitu. of the goods has the right of stopping ^■''^ them in transitu, that is to say, he may resume possession of 1 Sorivener v. The Great Northern Railway Co. (1871), 19 W.R. 388. 2 See note {h). Sect. 1 ante, p. 2. 202 SALE OF GOODS ACT 1893. Sect. 44. the goods as long as they are in course of transit/-^ and may retain them until payment or tender ^''^ of the price/'^ Notes. (a) " Subject to the provisions of this Act." E.g. the proviso attached to Sect. 47, under which stoppage in transitu may be defeated. See also Sects. 45 to 47 inclusive. If the seller has reserved the right of disposal under Sect. 19, the property has not passed, and stoppage in transitu is unnecessary. If the seller resumes actual custody he does so in virtue of his right as undivested owner. (b) "Buyer," "goods." Defined Sect. 62 (1). (c) Insolvency defined Sect. 62 (3). It is not necessarily bankruptcy, nor even notour bankruptcy. See Com., post, p. 288. Although at the date of the stoppage the buyer is solvent, his subsequent insolvency before delivery to him will render the stoppage effectual.^ (d) " Unpaid seller." Defined Sect. 38. See Com. infra, p. 207. («) " Fossession." Defined in Factors Act 1889, Sect. 1 (2). No definition is attempted in this Act. The right to resume . possession only extends to the goods themselves, not to a surroga- tum, such as the proceeds of a policy of insurance taken out by the buyer.2 (/) "Right of stopping." A right (unless otherwise provided) may be enforced by action. Sect. 57. (g) " In course of transit." As to duration of transit see Sect. 45. (A) " Payment or tender." See Sect. 41, note (e) ante, p. 191. (i) "Price." See Sects. 8 and 9. Stoppage in transitu an extension of lien. Commentary. Stoppage in transitu may with perfect propriety be called an equitable extension of the seller's right of lien.^ 1 Benjamin, p. 851 ; The Constantia (1807), 6 Rob. Adm. Eep. 321, per I Lord Stowell at p. 326. See also The Tigress (1863), 32 L.J. Adm. 97 at ! p. 101. 2 Berndtson v. Strang (1868), 3 Ch. App. 588. 3 It is so spoken of by Bell {Prin., Sect. 1307), and by Houston (Stoppage in transitu, p. 2). RIGHTS OF UNPAID SELLER AGAINST GOODS. 203 The governing principles of each of these rights, though Sect. 44. differing in many respects from the ordinary rules of con- tract, very nearly resemble each other. Both are seller's remedies against the goods, and have for their object the securing of the unpaid price. Both necessarily suppose the property to be in the buyer, but although the property must have passed, the possession remains with the seller or with a carrier. In both, the right ceases after the goods have been delivered into the actual or constructive custody of the buyer or his agent, other than a carrier conveying the goods towards the buyer or in terms of the contract. Lien exists so long as the unpaid seller retains actual or constructive possession, and ceases the moment that possession is lost ; stoppage begins where lien ends, and continues so long as the goods, although in a sense delivered to the buyer through his agent the carrier (Sect. 32), are still in course of transit. In one important respect, however, the rights differ. Lien can be exercised whether the buyer is insolvent or not : lusoivenoy of stoppage is only available when the buyer is insolvent gary^to"^''^^" according to the definition of insolvency given in Sect. 62 (3) stoppage. of this Act. If the seller stop in transitu before actual insolvency, he does so at his peril. If, when the goods arrive at their destination, the buyer continues solvent, the/ goods must be delivered, and the seller will be liable in ^ny' expenses incurred.-' Stoppage in transitu is said to have been introduced into Origin of England in 1690 by the case of Wiseman v. Vaindeput? ],°andtu— This was a Chancery case, and therefore, if correctly cited as England. the first instance of stoppage in transitu, it settles the fruitless discussion as to whether the right had its origin in Equity or at Common Law according to the distinction so long established in England, but now happily almost abolished.^ ^ Per JUtr d Stowell i n The CvnMcmaia, 6 Rob. Adm. Rep. 321. 2 2~VCTnon's"Eepisrpr203. -"—-.- ™— ' " I have always thought it highly injurious to the public that different rules should prevail in the different Courts on the same mercantile case. . . . The me rcantile law of this country is founded on principles of Equity ; and when once a rure'ls^eatablisheaTin that Court as a rule of property, it ought to be established in a Court of Law."— Per BuUer, J., in Tooke v. HolUngsworth (1793), 5 T.R. 215 at p. 229. Equity and Common Law were to a large extent fused by the Judicature Act of 1873 (36 & 37 Vict. c. 66). 204 SALE OF GOODS ACT 1893. Sect. 44. Although originating in Equity, it was soon adopted by the Courts of Common Law, and numerous cases after 1743 show that, from that date onwards, it had obtained a firm footing in England.^ Scotland. In Scotland, the right of stoppage was not recognised till near the end of the eighteenth century. In earlier cases the rule of the Eoman law which allowed the seller to claim the goods for the price even after delivery, was often pleaded, and was sometimes allowed on the ground of pre- sumptive fraud in the buyer, but this rule was latterly re- stricted to a period of three days after delivery.^ In Prince V. Pallat^ (1680) the seller's right to stop in transitu was strongly urged on the ground that delivery to the carrier was not delivery to the buyer. The Lords, however, found " that the wines being delivered to the skipper upon the buyer's order, the property was stated in the buyer, and that there was no hypothec in ware by the law of Scotland."* The rule intra triduum which prevailed in Scotland after 1736, was pleaded and sustained by the Court of Allan, steuart, Session in Allan, Steuart, and Co. v. Stein's Creditors ^ (1789), but on appeal to the House of Lords ^ (1790), the judgment on this point was reversed, and stoppage in transitu allowed. Lord Chancellor Thurlow said : " By the law of England, and, as I conceive, by the law of Scotland also, the shipping of goods to one who commissions them, or the delivery of them to a carrier to be conveyed to him, was a completed sale. But within the last hundred years a rule has been introduced from the customs of foreign nations, that, in the case of the vendee's bankruptcy, the vendor might stop and take back the goods in transitu, or before they came into the hands of the vendee : and this is certainly now a part of the law of England, and I understand it to be the law likewise of stein's Creditors, 1 Snee v. Prescott (1743), 1 Atk. 245, and other cases cited by Lord |A.binger in his dissenting judgment in Gibson v. Carruthers (1841), 8 M. & W. •337 at p. 343. Lord Abinger's judgment contains an able review of the (history of the doctrine. ^ Inglis V. Boyal Bank [Cave's Case) (1736), Mor. 4936. 2 Mor. 4932. * See CoM., Sect. 32 ante, p. 159. « Mor. 4949 ; 3 Pat. App. pp. 192, 193. " Reported sub nom. Jaffrey, etc. v. Allan, Stewart, and Co., 3 Pat. App. 191. RIGHTS OF UNPAID SELLER AGAINST GOODS. 205 Scotland." ^ This judgment had the effect of establishing Sect. 44. the doctrine of stoppage in transitu as part of the law of Misconceptw Scotland, but for many years afterwards its nature was not principle. fully understood. A tendency was exhibited to drive both* lien and stoppage in transitu into conformity with the ordinary law of sale, rather than to view them as special remedies standing ■per se? It was generally assumed that the effect of stoppage in transitu was to prolong the right of lien, and so prevent actual delivery to the buyer.^ To meet difficulties which suggested themselves, Bell divided constructive delivery into two kinds, viz. (1) where the goods could be stopped, and (2) where that privilege could not be exercised. In the former class he included such constructive delivery as went " no further than to forward the goods on their course towards the buyer in the charge of a middleman." * Even in the case of warehoused goods, there was, according to this theory, a kind of constructive delivery which allowed of stoppage in transitu,, and another kind which placed the goods altogether beyond the reach of the seller.^ This was the state of the law as understood in 1 3 Pat. App. at p. 196. ^ This tendency can be traced in the works of text writers after the general fallacy was exploded in 1849. See, e.g., Ross' Leading Cases, Com. Law (1855), vol. ii. p. 801, and Paterson's Compendium of English arid Scotch Law (1865), S. 189. The latter writer, referring to the law of Scotland, states that the octrine of stoppage in transitu is not, as in England, an exception to the general rule. " For the general rule in the case of all contracts is that either party may withhold performance of his part of the contract if the other party refuses to perform the corresponding part. " As authority, Paterson cites Morton V. AiercTomby (1858), 20 D. 362, but, apart from incidental dicta, that case gives no countenance to any distinction between the laws of Scotland and England in this respect. Paterson's conception seems to have been that, in Scot- land, the seller's obligation of delivery was not performed by delivery to a carrier, but this is a manifest error. See Com., Sect. 32 ante, p. 160, and Prince v. Fallat (1680), Mor. 4932. His inference is that, in Scotland, stoppage was merely an exercise by the seller of his undivested right of property, but it was clearly a re-vcsting in the seller of property which had passed from him to the buyer. " "The foundation of a right to stop in trcmsitu, properly speaking, is the original title of property in the vendor, which is held to accompany the goods in their transit or carriage, to the effect, or for the purpose, of enabling that party to stop or withhold the actual delivery, if, from supervening facts, his safety is endangered, and he has accepted of no provision for the price," — Per Lord Justice-Clerk Hope in Louson v. Orailc (1842), 4 D. 1152 at p. 1157. * Bell's Com. i. 229-233. " Bell's error is pointed out in full editorial notes by Lord M'Laren in his edition of the Commentaries, vol. i. pp. 183 and 229. The effect of construe- 206 SALE OF GOODS ACT 1893. Sect. 44. M'Hwen V. Smith, Sta,tement of the true principle. Scotland in 1847, when M'Ewen v. Smith ^ came up for decision. This case related to sugars in bond which, so far as the case was concerned, had never been in transit, but which were said to have been transferred by an intimated delivery order. The Court of Session negatived the claim of the alleged transferee, most of the judges founding their opinion on the seller's right to stop in transitu. On appeal, the House of Lords affirmed the judgment^ (1849), but solely on the ground that no delivery of any kind had taken place.^ The principle of stoppage in transitu is thus stated by Lord President Inglis in 1867 : "No law, either in England or Scotland, gives any real countenance to the idea that the state of transitus to which the equitable remedy of stoppage applies, is anything but an actual state of transit from the seller to the buyer. . . . The equitable remedy of stoppage is applicable only to goods which are either in the hands of a carrier, or of some person — such as a wharfinger — who is doing something to render complete the contract of carriage. To put goods in a state of transitus the seller must have tive delivery is in no way dift'erent from that of actual delivery. The only question is. Has delivery of any kind taken place ? If it has not, the seller's remedy is lien ; if it has, the remedy, if any, is stoppage in transitu. See Com., Sect. 32 ante, p. 160. 1 9 D. 434. 2 6 Bell's App. 340. ' "The simple question is whether the original vendors of these goods retained their lien upon them or not. Several of the judges in the Court below have expatiated very largely upon the doctrine of stoppage in transitu. My Lords, that doctrine has no more hearing upon this case than the doctrine of contingent remainders." — Per Lord Campbell, 6 Bell's App. at p. 355. In the subsequent case Melrose v. Hastie (1851), 13 D. 880, it was retorted in the Court of Session, that, if the Court had been misled, it was by means of English cases. Lord Fullarton said : " It appears from the judgment in the House of Lords that the term of stoppage in transitu was held to be inaccurate and inappropriate. All I can say is that, if it be so, it was no innovation of ours. It was freely used in the discussion in M'Ewen's Case for the best of all reasons that the English authorities, by which we were mainly guided in this department of mercantile law, had all treated the question under that designation. " In support of this statement Lord Fullarton refers to the cases of Hurry v. Mangles (1808), 1 Camp. 452 ; Sarman v. Anderson (1809), 2 Camp. 242 ; Whitehouse v. Frost (1810), 12 East 613 ; Stoveld v. Hughes (1811), 14 East 308 ; Swanwick V. Sothem (1839), 9 A. & E. 895 ; and Hawes v. Waison (1824), 4 B. & C. 540. " All of these," continued Lord Fullarton, "and, I believe, many others analogous to that of M'Ewen, were argued by the counsel, and decided by the judges, and recorded by the reporters, as cases of stoppage in transitu and nothing else " — 13 D. at p. 896. RIGHTS OF UNPAID SELLER AGAIXST GOODS. 207 parted with the possession of the goods and put them into Sect. 44. the hands of some person who is to carry, or procure them to be carried and dehvered to the buyer, and the buyer must be in the position of not having received the goods. Unless the seller has parted with the possession, his remedy is not stoppage in trarisitu, but in Scotland, retention, and in England, an exercise of the seller's right of hen." ^ To adapt this statement to the existing law, it is only necessary to exclude the reference to the Scottish right of retention, which, by this Act, has now been superseded by the seller's lien. The right of stoppage may be exercised by the " unpaid Bight of seller " as defined in Sect. 38. It is not available to any ^y ^^^^"^x- one but a seller, or a person who stands " in the position of ercised. a seller, as for instance an agent of the seller to whom the bm of lading has been endorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price." ^ It is not every person who may have held a hen over goods, who is entitled to foUow them and regain possession after it has been lost. The liens of factors, bleachers, etc., have no such special privilege attached to them.^ It will be observed that, although in Sect. 45 there is frequent reference to the agent of the buyer as being entitled to put an end to stoppage in transitu, it is nowhere expressly stated that the seller's agent may Seller's agent. enforce the stoppage where he has not a direct title as indorsee, or is not personally interested as having paid or become responsible for the price. Such a right, however, on the part of an agent exercising either special or general authority, is clearly implied. It is provided by Sect. 61 (2) that the rules relating to the law of principal and agent continue to apply to contracts for the sale of goods, and, in practice, the power of an agent in this respect is fully recognised.* A different question arises if one ^ In Black V. Incorporation of Bakers (1867), 6 Maep. 136 at p. 140. 2 Sect. 38 (2). 3 Benjamin, p. 847. ' See, e.g., Ba/xter v. Fearscm (1807), Hume 688 ; Whitehead v. Anderson | (1842), 9 M. & W. 518 ; Blackburn on Sale, p. 325. " It is most salutary, ' and quite consistent with the principle of negotiorum gestio, that the person 208 SALE OF GOODS ACT 1893. Sect. 44. ' Unauthorised agent — Ratifi- cation. Cautioner for price. Effect of arrestments, oasii receipts, and cross accounts. Carrier's lien. assumes to act on behalf of the seller who has no authority whatever. The rule in England appears to be that, if the act of the party in stopping the goods is ratified before the transit is ended, by the party entitled to exercise the privilege, it will be effectual, but that ratification or adop- tion after the transit has ended, will be too late.^ A cautioner for the price is not entitled to stop in transitu? If, however, the cautioner has paid the price to the seller, he is entitled, according to the ordinary rule of the law of Scotland, to an assignment of the securities held by the creditor, including the right to stop the goods. The same rule was introduced into England by the English Mercantile Law Amendment Act of 1856.^ An arrestment in the hands of the carrier by a creditor of the buyer will not defeat the seller's right to stop the goods * ; nor will a mere cash receipt granted by the buyer to a sub-vendee, not being a document of title.^ When there are cross accounts between seller and buyer, the right is not excluded because the seller has goods of the buyer in his hands unaccounted for, and the balance is uncertain.^ A decision inconsistent with this rule has been much questioned.'^ The seller's right of stoppage in trcmsitu will prevail against any lien claimed by the carrier on account of a general balance,^ but not for the carrier's special charges on the goods themselves. who in general acts for a foreign merchant though he hold no special commis- sion, should be allowed, on the sudden bankruptcy of the buyer, to apply for and obtain the necessary warrant to stop " — Bell's Cb??!. i. 249. The agent can act just as effectually without a judicial warrant. Bell gives undue import- ance to the warrant. ^ Stoppage effectual in Hutchiiigs v. Nrnies (1863), 1 Moo. P.C.C. N.S. 243, but ineffectual in Bird v. Brown (1850), 4 Ex. 786. 2 Louson V. Craik (1842), 4 D. 1452 ; SiffHn v. Wray (1805), 6 East 371. 3 19 & 20 Vict. 0. 97, Sect. 5. See Benjamin, p. 846. * Neish V. Trompomky (1807), Hume 693 ; Dunlop v. Scott and Co. (22nd February 1814), f.C. Similarly, in regard to an attachment in England, Smith V. Goss (1808), 1 Camp. 282. = Kemp V. Falk (1882), 7 App. Gas. 573, per Lord Blackburn at p. 584. Benjamin, p. 891 note and p. 895. " Wood V. Jones (1825), 7 D. & R. 126. ' Vertue v. Jewell (1814), 4 Camp. 31. See Benjamin, p. 849. 8 Oppenheim v. Russell (1802), 3 B. & P. 42. RIGHTS' OF UNPAID SELLER AGAINST GOODS. 209 45. — (1.) Goods ^"^ are deemed to be in course of Sect. 45. transit '^^ from the time when they are delivered to a d^^a™" of •Z TRANSIT. carrier ^"^ by land or water, or other bailee or cus- todier^''^ for the purpose of transmission to the buyer/"^ until the buyer, or his agent in that behalf,^'^ takes delivery "^^ of them from such carrier or other bailee or custodier.^'*^ (2.) If the buyer or his agent in that behalf ^'^ obtains delivery '-^^ of the goods before their arrival at the appointed destination,*^^ the transit ^^ is at an end. (3.) If, after the arrival of the goods at the appointed destination,^^ the carrier or other bailee or custodier '-'^ acknowledges to the buyer, or his agent,^'^ that he holds the goods on his behalf and continues in possession '•^^ of them as bailee or custodier for the buyer, or his agent, the transit is at an end,^*^ and it is immaterial that a further destination ^^^ for the goods may have been indicated by the buyer. (4.) If the goods are rejected by the buyer,^^'^ and the carrier or other bailee or custodier continues in possession of them, the transit ^^'^ is not deemed to be at an end, even if the seller ^"^ has refused to receive them back.^*^^ (5.) When goods are delivered to a ship chartered by the buyer® it is a question depending on the circumstances of the particular case, whether they are in the possession ^''^ of the master as a carrier, or as agent to the buyer. (6.) Where the carrier or other bailee or custodier wrongfully ^""^ refuses to deliver the goods to the SALE OF GOODS ACT 1893. Sect. 45. buyer, or his agent in that behalf/'^ the transit is deemed to be at an end. (7.) Where part delivery of the goods has been made to the buyer, or his agent in that behalf,^'^ the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession ^''^ of the whole of the goods/"^ Notes. (a) "Goods," "seller," "buyer." Defined Sect. 62 (1). "'' Buyer " includes a person to whom the buyer directs the goods to be sent.^ (6) " Transit" See Com. infra, p. 212. (c) "Delivered to a carrier." Delivery defined, Sect. 62 (1). Delivery to a carrier is primA facie delivery to the buyer. Sect. 32 (1). The definition of the coiu'se of transit here given might be made more complete by the addition of words exclud- ing from its scope delivery to a carrier (1) where the property has not passed (see Sects. 17, 18, and 19), and (2) where the carrier is the buyer's agent to receive the goods on his behalf. See Com. infra, p. 212. {d) " Bailee or custodier." Bailee, in Scotland, by interpreta- tion, includes custodier [Sect. 62 (1)], and the word "custodier" is therefore superfluous here. If the bailee is not himself a carrier, he must at least hold the goods for some purpose con- nected with the contract of carriage, e.g. as warehouseman or wharfinger receiving the goods from one carrier, that the transit may afterwards be continued by another. A carrier who is also a warehouseman puts an end to the transit by holding the goods by instructions of the buyer for the purpose of custody and not of carriage. («) "Agent in that behalf." Buyer's agent includes a sub- buyer.^ It probably also includes a trustee in bankruptcy {Com. infra, p. 216). As to seller's agent see Com., Sect. 44 ante, p. 207. 1 Ex parte Oolding, Davis, and Co. (1880), 13 Ch. D. 628, per Cotton, L. J., at p. 636 ; Sx parte Miles (1885), 15 Q.B.D. 39, per Brett, M. R., at p. 44. 2 IHxon V. Yates (1833), 5 B. & Ad. 313. RIGHTS OF UNPAID SELLER AGAINST GOODS. 211 (/) " Takes delivery," " obtains delivery." Compare Sect. 43 Sect. 45. (1) (&) where the words are "lawfully obtains possession." The word " lawfully " was introduced into Sect. 43 in Committee, and its absence here suggests whether any kind of possession by the buyer (even forcible or fraudulent) will prevent stoppage in transitu. See Com. infra, p. 213. {g) "Appointed destination," "fmther destination." See Com. infra, p. 218. {h) "Possession" is defined in The Factors Act 1889,i Sect. 1 (2). No definition is attempted in this Act. As to the double meaning of constructive possession, see Sect. 39, note {i) ante, p. 184. As to carrier's possession, see note (i) infra, and Com. infra, p. 212. (i) Transit ended by carrier becoming custodier for buyer. Mere arrival at the appointed destination does not end the transit. For this purpose the buyer must either take actual delivery, or, what is equivalent, arrange with the carrier to act as his agent for custody. But the transit is ended by any arrangement for custody to which both buyer and carrier are consenting parties. In the Scottish case of Black v. Cassels^ (1828), goods remained at the request of the buyer in a warehouse belonging to the carrier for three months after arriving at their destination, notwithstanding which they were held liable to stoppage in transitu, but this is clearly bad law.^ (j) Rejection by buyer — continued custody by carrier. The rule of this sub-section is a corollary of Sub-sect. (3). The rejection may be in breach of contract, as where the buyer makes un- founded allegations of insufficiency, or it may arise from a desire to save the seller from unnecessary loss through the buyer's impending bankruptcy. As to rejection by the buyer on the ground of insolvency, see Com. infra, p. 219. {k) Seller's refusal to receive back. The supposition is that the seller at first insists upon the buyer implementing the contract by taking delivery, and that the carrier cannot get relieved of the goods at either end of the transit. While, however, the goods are in this position, the seller loses confidence in the buyer's solvency and avails himself of the remedy.* (l) "Ship chartered by the buyer." Where the ship is the buyer's property, the master is usually the buyer's agent to take complete or unconditional delivery. There is therefore no transit 1 52 & 53 Vict. e. 45. ^ 6 Sh. 894. ^ See Strachan v. Knox aiid Co.'s Trustee (21st January 1817), F.C. * Bolton V. Lane and Tories My. Go. (1866), L.R. 1 C.P. 431 ; James \. Griffin (1837), 2 M. & "W. 623. SALE OF GOODS ACT 1893. Sect. 45. in the sense of the Act. As to a chartered ship see Com. infra, p. 213. (m) "Wrongfully." See note (/) supra and Com. imfra, p. 213. In Dunlop v. Scott and Co} (1814) a question was raised as to the effect of a refusal by the carrier to deliver to the buyer in consequence of an arrestment by a creditor of the buyer. The answer seems supplied by this sub-section. The refusal being wrongful,^ the transit is deemed to be at an end. This result was reached in somewhat similar circumstances in England, in Bird v. Brown^{\^5Q). (n) Part delivery — Stoppage of remainder. See Com. infra, p. 222. Definition of transitus. Relation of carrier to parties. Commentary. The transitus, in the words of Lord Blackburn, is "whilst the goods are on their passage from the vendor to the buyer, or when they are in the hands of one who neither holds the possession by a contract of bailment made with the vendor, nor yet as an agent to hold them under the order of the buyer, but only as an agent to forward them from the vendor to the buyer." * The carrier may stand relatively to the parties in one or other of three different positions : (1) he may hold for the seller, as where, in virtue of a suspensive condition or a reservation of the jus disponendi, the property in the goods has not passed to the buyer ^ ; (2) he may hold for the buyer, as where the buyer has obtained both pro- perty and possession before the commencement of the transit or where the carrier is the buyer's agent for the receipt of the goods ; (3) he may hold for the sole purpose of transmission to the buyer, the property having passed and the carrier not being the seller's agent. It is only to the last of these that stoppage in transitu applies. The circumstances connected with the actual conveyance may 1 22nd February 1814, F.O. 2 See Com., Sect. 44 ante, p. 208 ; Bell's Oom. i. 231, note. 3 4 Ex. 786. * Blackburn on Sale, p. 351. 5 Bell's Com. i. 230 ; Watt v. Mndlay (1846), 8 D. 529 ; Hall and Sons V. Scott (1860), 22 D. 413 ; Unn v. Shields (1863), 2 Macp. 88. The sale itself may be incomplete, as in Wallace, Qardyn, and Co. v. Miller (1766), Mor. 8475, Hailes 27. of transit. or fraud. RIGHTS OF UNPAID SELLER AGAINST GOODS. 213 be the same in each case, but the nature of the carrier's Sect 45. possession is different.^ The primary difficulty in connection with the duration Termination of the transit is to fix its termination ; in other words, to ascertain the precise conditions under which the buyer or his agent will acquire such possession as will defeat the seller's right. Among the considerations which must weigh in such an enquiry, is the effect to be given to possession acquired by force or fraud. The Act provides Eflfeot of force that " the effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, shall continue to apply to contracts for the sale of goods''^ [Sect. 61 (2)], but this provision is apparently limited to the constitution of the contract, and, even were it otherwise, the common-law effect of force and fraud upon stoppage in transitu is neither well defined nor altogether consistent. Thus, divergent opinions have been expressed as to the legal effect where the buyer forcibly or fraudulently obtains dehvery before the arrival of the goods at their appointed destination [Sub- sect. (2)]. In other words, granting that the buyer may anticipate the end of the transit, can he do so without the carrier's consent ? On the one hand we have the following judgment of the Court in Whitehead v. Anderson^ (1842). " If the vendee take the goods out of the possession of the carrier into his own before their arrival, with or withoxut the consent of the carrier, there seems to be no doubt that the transit would be at an end ; though, in the case of the absence of the carrier's consent, it may be a wrong to him for which he would have a right of action." * On the other hand, Lord Blackburn says : " N"otwithstanding the expres- sion of the Exchequer in Whitehead v. Anderson, it is sub- mitted that it is doubtful whether, when the carrier has a 1 ' ' Stoppage ill traTisUu is called into existence for the vendor's benefit after the buyer has acquired title and right of possession and even construc- tive possession, but not yet actual possession" — Benjamin, p. 853. As to the various meanings of "possession" in this connection see Sect. 39, note (i) arafe, p. 184. ^ These words were added during the progress of the bill through Parlia- ment. 3 9 M. & W. 518. ■* Per Parke, B., 9 M. & "W. at p. 534. 214 SALE OF GOODS ACT 1893. Sect. 45. Effect of fraud upon delivery in Scotland. Eule intra triduum. Effect of stoppage in transitu upon Scots law as to- fraud. Does Scottish rule differ from that of England ? right to refuse to allow the vendee to take even construc- tive possession, the vendee can improve his position by a tortious taking of actual possession against the will of the carrier. The law in general discountenances violence, and it would seem not consistent with its general policy to give a man a benefit, in consequence of his forcible or fraudulent wrong against a third party." ^ The effect given to fraud in questions of delivery of possession in Scotland has been very marked. Before stoppage in transitu was recognised, there was a legal pre- sumption of fraud in all cases where the buyer's insolvency supervened shortly after he had obtained delivery without payment of the price. It was felt, however, that some limit must be placed upon this presumption, and accord- ingly, in Inglis v. Royal Bank {Cave's Case) ^ (1736), the rule intra triduum was established, under which insolvency had no effect upon the possession unless it supervened within three days of delivery. This rule was overturned by the House of Lords in Allan, Steuart, and Co. v. Stein's Creditors ^ (1790), by which judgment stoppage in transitu became part of the law of Scotland. Lord Thurlow in that case said : " I cannot perceive that the Court have ever pro- ceeded on that positive rule which the sellers have con- tended to be now fixed law. It is rather my opinion, from the examination of those cases, that the Court had con- sidered the failure within three days as one circumstance only from which fraud might be presumed, but not as that from which, singly, fraud was to be absolutely inferred, though other circumstances might show there was none. In the present case . . . the buyers failing within three days after the transaction, or after the receipt of the goods, was not per se sufiicient to avoid the contract." * It is to be noticed that it was the English remedy of stoppage in transitu which the House of Lords substituted for the rule 1 Blackburn on Sale, p. 375. See also Benjamin, pp. 878 et seq. ^ Mor. 4937. See also Shepherd v. Campbell and Eohertson (1775), Hailes 637, H. of L. (1776), 2 Pat. App. 399 ; and Bankton, i. 10. 117. 2 Mor. 4949, 3 Pat. App. 191 [sub nom. Jaffrey v. Allan, Stewart, and Co.). * 3 Pat. App. at p. 196. RIGHTS OF UNPAID SELLER AGAINST GOODS. 215 intra triduum, and that there was nothing in the principles Sect. 45. of the law of sale in Scotland to prevent stoppage, as known and practised in England, from being adopted in its entirety. No difference in regard to the passing of the property could affect it, for in Scotland, as well as in England, the property passed to the buyer, in the ordinary case, by delivery to the carrier at the beginning of the transit. But the Scottish Courts, while admitting stoppage in transitu, rejected the English limitation, which would not allow the buyer's creditors to be deprived of their debtor's goods because of alleged fraud on the part of the debtor in taking delivery. In stoppage in transitu the seller is allowed a special and anomalous privilege, which, on the English theory, must take the place of any presumed fraud of the debtor. The very foundation of stoppage implies that the buyer is taking possession of his ovm goods, not those of the seller, for if the property has not already passed to the buyer, there is no occasion for the remedy.^ If the carrier is not the buyer's agent to take delivery, but is agent for the seller to give delivery, then a fraudulent taking possession by the buyer from the carrier might well be subject to reduction, but, in such case, there is no room for stoppage in transitu. In this light, many of the Scottish cases of stoppage in transitu sub- Confusion of sequent to that of Allan, Steuart, and Co. wiU not bear close gcotti^^ca^s. examination. There is an admixture of the old principle of presumed fraud with the new remedy of stoppage, which is entirely unwarranted. Thus in Schuurmans and Sons v. Schuwrmans Goldie^ (1828), the seller was allowed to stop in transitu Qoiai^"' after the buyer's creditors had obtained possession of the goods, on the ground that the buyer in sending out circulars to his creditors announcing his intention to stop payment, had not sent one to the agent of the seller of the goods. Lord Alloway said : " If the law of England and Scotland could be reconciled, it would be very desirable. The law 1 "If the seller has despatched the goods to the buyer, and insolvency occurs, he has a right, in virtue of his original ownership, to stop them in transitu!,. Why ? Because the property is vested in the buyer." — Per Bayley, J., in Blomm v. Sanders (1825), 4 B. & C. 941 at p. 949. 2 6 Sh. 1110. 2i6 SALE OF GOODS ACT 1893. Sect. 45. merchant should, if possible, be the same over the world. But there is a very serious difference on the point under discussion between the law of England and that of Scotland. From a very early period the English Courts adopted the principle that wherever the subject sold has come into the possession of the bankrupt, though after an act of bank- ruptcy, it falls into the general fund. This Court has followed a different principle, on the ground of fraud, founded on the Eoman law, and recognised everywhere but in England. . . . Supposing the agent for the foreign seller had received the bankrupt's circular on the 4th of January, was it not his duty to apply immediately to stop in transitu 1 But the bankrupt took care he should not receive any such letter. Then, if this party (the seller's agent) had a right to stop the goods, could the bankrupt avail himself of his own fraud by which stoppage was prevented ? This Court has never countenanced such a fraud; and the knowledge of bankruptcy is clearly brought home to the bankrupt here." ^ Does bank- The judgment above quoted seems to suggest that, in Scotiand%»so Scotland, bankruptcy, ipso facto, operates a stoppage in facto, operate transitu. If this be so, a trustee for creditors in Scotland cannot take possession of goods so as to end the transit and prevent the seller from exercising his remedy. This view will be found in many of the Scottish cases, and Bell, writing in 1826, says "the opinion seems to be growing stronger." ^ Bell doubts " whether, laying aside the in- expediency of having opposite rules in England and Scotland, there be any clear principle for supporting a determination opposite to that which has been followed in England."^ Bankruptcy, he says, " does not annul a previous contract. If the seller choose, he may insist on the bankrupt or the creditors taking the goods and allowing him to claim under 1 6Sh. at p. 1113. ' Bell's Oom. (5th edition), i. 227 ; Bell's Frin., Sect. 1309. The case of Brown v. Watson (1816), Hume 707, founded on by Bell {Prin., Sect. 1309), was one of incomplete delivery, and the soundness of the judgment is (at least in part) doubted by Hume who reports it. ^ As to the law of England see Ellis v. Swnt (1781) 3 T.R. 464 ; Scott v. Pettit (1803), 3 B. & P. 469, and other cases cited in Bell's Com. (7th editioh), i. 247, notes. stoppage RIGHTS OF UNPAID SELLER AGAINST GOODS. 217 the contract. If the creditors choose, they may pay the Sect. 45. price and take the goods. . . . The bankruptcy cannot be a countermand otherwise than by presumption that, if the seller had known of this event, he would have recalled the goods, an inference which is far from unavoidable, for the vendor may have chosen to act differently. As to restitu- tion, supposing the delivery once made, there seems to be no ground for it in this, more than in a hundred other cases which occur in bankruptcy." ^ But the question, even as to Effect on this Scotland, seems settled by authority. In the very case ^Aiian^steuart, which introduced stoppage in transitu into Scotland, the «»'^ Go.'s Case. question was stated by Lord Thurlow to be "whether the vendors were entitled to stop certain quantities of grain which were consigned or forwarded by them to Stein, the bankrupt, before the actual delivery to him, the lanhruptcy having intervened." ^ The interlocutor of the House allowed the sellers to produce " evidence to show that they were entitled to stop and detain the grain consigned by them to the bankrupt in transitu, or before actual delivery." ^ If bankruptcy had been ipso facto a stoppage, it was unneces- sary to found upon a stoppage by the sellers.* On the general question as to what acts of the buyer Nature of will be sufficient to change the possession, Parke, B., states siorwhich^^^^' the law thus : " The unpaid vendor has a right to retake the will defeat goods before they have arrived at the destination originally ^ "PP^^e. contemplated by the purchaser, unless in the meantime they 1 Bell's Com. i. 248. 2 In Allan, Steuart, and Co. v. Stein's Creditors (1790), sub nam. Jaffrey V. Allan, Stewart, and Co., 3 Pat. App. 191 at p. 196. 3 Pat. App. at p. 197. * Brodie says : " As it is a settled point in England that bankruptcy does not prevent the consignee from taking actual possession to the same effect as if he were solvent, it is a necessary and settled consequence that actual possession may to the same purpose be competently taken by his assignees under a commission of bankruptcy. If, then, the English authorities are henceforth to be received by us on this point, it will follow that in the event either of a private trust or of a sequestration, the trustee in the latter case may, as substituted in the place of the bankrupt or insolvent, take actual possession prior to stoppage by the consignor and thus prevent it." — Brodie's Stair, p. 884. In the earlier Scottish cases the true principle seems to have been better understood. See, e.g., Sinclair and Williamson's Creditors v. Robertson and Aitken (1801), Mor. App. Sale 3. M. P. Brown, writing in 1821, treats it as settled law in England that bankruptcy does not operate a stoppage, but thinks the question doubtful in Scotland [Sale, p. 537). 2l8 SALE OF GOODS ACT 1893. Sect. 45. "Appointed destination " — " further destination." come to the actual or constructive possession of the vendee. . . . The case of the vendee taking the goods out of the possession of the carrier before their arrival is one of actual possession. A case of constructive possession is where the carrier enters, expressly or by implication, into a new agreement distinct from the original contract for carriage, to hold the goods for the consignee as his agent, not for the purpose of expediting them to the place of original destina- tion pursuant to that contract, but in a new character for the purpose of custody on his account, and subject to some new or further order to be given to him. It appears to us very doubtful whether an act of marking or taking samples or the like, without any removal from the possession of the carrier, though done with the intention to take possession, would amount to a constructive possession, unless accom- panied with such circumstances as to denote that the carrier was intended to keep, and assented to keep, the goods in the nature of an agent for custody. . . . Unless by contract with the captain, express or implied, the rela- tion in which he stood before, as a mere instrument of conveyance to an appointed place of destination, was altered, and he became the agent of the consignee for a new purpose, there was no constructive possession on the part of the vendee." ^ The words "appointed destination" in sub-sections (2) and (3) are significant. It is sometimes assumed that where the goods are not in transit towards the buyer but " away from him " to some other destination, there is no room for stoppage in transitu. If, however, the destination is appointed in the contract itself or by the original instruc- tions of the buyer, the goods may be stopped before they reach that destination, just as effectually as if the transit were towards the buyer himself.^ " The destination," says Cave, J., " may be iixed by the contract of sale or by direc- tions given by the purchaser to the vendor. But, however fixed, the transit is at an end when the goods have got into ^ In Whitehead v. Anderson (1842), 9 M. & "W. 518 at pp. 534, 535. '"' See M'Leod v. Harrison (1880), 8 Ret. 227. RIGHTS OF UNPAID SELLER AGAINST GOODS. 219 the hands of some one who holds them for the purchaser, Sect. 45. and for some other purpose than that of merely carrying them to the destination fixed by the contract or by the directions given by the purchaser to the vendor." ^ The distinction between " appointed destination " and "further destination" both of which phrases occur in Sub-sect. (3), is illustrated by the following remarks of Lord Esher, M. E. — " There has," he says, " been a difficulty in some cases where the question was whether the original transit was at an end and a fresh transit had begun. The way in which that question has been dealt with is this : where the transit is a transit which has been caused either by the terms of the contract or by the directions of (the purchaser to the vendor, the right of stoppage in transitu exists ; but if the goods are not in the hands of the carrier by reason either of the terms of the contract or of the directions of the purchaser to the vendor, but are in transitu afterwards in consequence of fresh directions given by the purchaser for a new transit, then such transit is no part of the original transit, and the right to stop is gone. So, also, if the purchaser gives orders that the goods shall be sent to a particular place, there to be kept till he gives fresh orders as to their destination to a new carrier, the original transit is at an end when they have reached that place,, and any further transit is a fresh and independent transit." ^ Sub-section (4) deals with rejection by the buyer. It Eejection by is well established in Scotland that a buyer, clearly insolv- g^otian ™ ™ ent, and resolved upon suspending payment, is entitled to reject goods offered for delivery,® and where the property has not already passed to him, he is hound to reject, other- wise the effect of delivery may be set aside on the ground of fraud.* The buyer may even take the goods into his i In Betliell v. Clark (1887), 19 Q.B.D. 553 at p. 561; Attd. by Ct. of App. (1888), 20 Q.B.D. 615. 2 In Bethell v. Clark (1888), 20 Q.B.D. 615 at p. 617. See also Dixon v. Baldwin (1804), 5 East 175 ; Coates v. Mailton (1827), 6 B. & 0. 422 ; Whitehead v. Anderson (1842), 9 M. & W. 518 ; Kendal v. Marshall, Stevens, and Co. (1883), 11 Q.B.D. 356; Ex parte Miles (1885), 19 Q.B.D. 39.— Blackburn, pp. 369, 370; Benjamin, pp. 867 et seq. 3 Bell's Com. i. 253. * See cases in App. II. Iir. (7). This is altogether apart from the question previously discussed, as to whether acceptance of delivery by an insolvent or 220 SALE OF GOODS ACT 1893. Sect. 45. warehouse custodim causa, without such temporary custody- having the effect of delivery, or preventing the seller from exercising his right of stoppage/ The result is practically In England. the same in England. Thus in James y. Griffin''' (1837), the buyer, being urged by the shipmaster to land the goods in order to set the vessel free, sent his son to attend to the unloading at the wharf where he usually received such goods. At the same time he told his son that, being in- solvent, he did not intend to take delivery. It was held that the conversation between father and son was competent evidence of the father's intention, and that the transit was not ended. ^ " The question," says Benjamin, " now always bankrupt buyer can be deemed fraudulent to the effect of continuing the seller's right of stoppage in transitu. Stoppage is a remedy per se, and is founded on the fact that, while the property has passed to the buyer, the only possession yet obtained by him has Been through an agent for transmission. 1 Drake v. M'Millan (1807), Hume 691 ; SteiM v. ffutchison (16th Nov- ember 1810), F.C. ; Brown v. Watson (1816), Hume 709 ; Inglis v. Ft. Egliwton Spinning Co. (1842), 4 D. 478 ; Booker and Co. v. Milne (1870), 9 Macp. 314 — Bell's Com. i. 230. Brodie, whose criticism is acute and valuable, though often marred by over-elaboration and a tendency to self-assertion, seems in this instance to carry the principle of stoppage in transitu to an unnecessarily rigid extreme. Writing in 1831, he says : "Though we have merely adopted from our neighbours, and that recently too, the doctrine of stopping in transitu, there has been a strange disposition here to carry it farther than has ever been done in England. It has not only been strongly insinuated that it would be a fraudulent and therefore reducible act in [an insolvent or bankrupt] consignee to terminate the transit by his interference, but it has been held that he is, without any agreement with the consigner to that purpose, or any measure calculated to rescind the contract orMivest him- self of the property, entitled to interpose directly for the consigner in the way of undertaking the custody for him, and thus to accomplish the object of stoppage in that person's favour. Surely, such a judgment is totally irreconcilable with the doctrine of stoppage in transitu. Such an act by the consignee himself could not have the effect of divesting him, and how the proprietor of goods could undertake' the custody of them for another, I cannot conceive " — Brodie's Stai/r, p. 884. Brodie attacks the cases of Drake v. M'Millan and Stein v. Sutchison and says : ' ' Lord President Blair seems never to have understood the doctrine of stoppage im, transitu." The critic, however, forgets that the doctrine itself is founded on the anomaly of a consignor withdrawing delivery after it has been given, and that there is nothing to prevent an equitable extension of this anomaly. Lord M'Laren seems to support Brodie's view, in so far as he doubts whether, in Drake v. M'Millan, "there was any sufBcient rejection." — Bell's Com. i. 256, note. The question, it is submitted, rather turns upon whether the buyer ever accepted the goods. If he never accepted them on his own behalf, and, on the contrary, expressly repudiated such acceptance, he must necessarily be held in law to have rejected them. i! 2 M. & W. 623. ^ Compare this case with Drake v. M'Millan (1807), Hume 691, where the insolvent buyer, who resided at a distance from the port of delivery, instructed a law agent on the spot to arrange for delivery and custody " for RIGHTS OF UNPAID SELLER AGAINST GOODS. 221 turns upon the point whether (1) the buyer has left any- Sect. 45. thing undone for the perfect transfer of the property to himself, in which case, the sale being incomplete, he may honestly decline to complete it to the prejudice of the vendor, or (2) whether, although the transfer of the property be complete, the transit into his possession, remains incom- plete, in which event he may honestly refuse the possession so as to leave to his vendor the right of stoppage in transitu, which will be equally available to the latter if he can accomplish it before the assignees get possession of the goods." ^ To this it may be added that mere custody by the buyer or his agent does not seem to involve possession in the character of owner, if there is clear evidence that such custody was intended for a different purpose, such as the preservation of the goods, or the setting free of the vessel.^ After sequestration, the buyer has no power to reject,^ Sequestrated and if the goods are delivered into the bankrupt's stock no°powerto^ before stoppage, the right is defeated.* It is immaterial reject, whether the bankrupt accepts or merely stands aside ; if he accepts, he does so as the agent of his general creditors. It follows that, after the bankrupt is divested of his estate and loses the power of rejection, he has no power to refuse delivery or to prolong the transit for the benefit of the seller by taking the goods custodice causa.^ Mere notice of an intention to stop the goods, given by the benefit of all concerned. " The agent's instructions were held evidence of the buyer's intention, and the seller was consequently preferred to the buyer's creditors. ^ Benjamin, p. 486. ^ " If the possessor of the goods has the intention to hold them for the buyer, and not as an agent to forward, and the buyer intends the possessor so to hold them for him, the transUus is at an end, but I apprehend that both these intents must concur " — Blackburn, p. 364. See Strachan v. Kn/xo and Co. 's Trustee (21st January 1817), F.C. ' BeU says "this has been held with expressions of regret." — Bell's Com. i. 255. '' HamilUm v. Barrow and JReyTwlds (1767), Bell's Com. i. 255, note. * In Sinclair and Williamson's Creditors v. Mohertson and Aitken (1801), Mor. App. Sale 3, one of the judges said : "The intimation to the bankrupts is nothing ; they could not interfere. They could have no right to refuse the goods had they been brought to them for delivery." This dictum is reported by Bell {Com. i. 250, note), who was one of the counsel in the case. It does not appear in the Faculty Report or in Morrison. 322 SALE OF GOODS ACT 1893. Sect. 45. Effect of notice of intention to stop. Ship chartered by huyer. Paxt delivery — stoppage of remainder. the seller to the creditors or the trustee of an insolvent or bankrupt buyer, will not prolong the transit, or prevent acceptance on the termination of the transit.-' In order to protect himself the seller must take the steps set forth in Sect. 46.2 Where a ship for conveying the goods is chartered by the buyer [Sub-sect. (5)], much depends upon the nature of the charter-party. If the ship has been " demised " so that the master is the servant of the charterer, it is practically the buyer's ship, but if the subject of hire is merely the exclusive use of the vessel, and the master remains the servant of the shipowner, he is an independent person, and the goods may be stopped. It is, however, a question of intention in every case.* The rule of Sub-sect. (7) corresponds with that of Sect. 42. Part delivery does not affect the seller's rights of lien or stoppage in transitu over the remainder of the goods unless it is so intended.* It was even held in Grawshay v. Eades^ (1823), that although part of the goods had been landed on the purchaser's wharf, the transitus was not ended as to these goods, because it was not the carrier's intention to give possession to the buyer.^ The English cases as to part delivery are collected in a note to Benjamin [p. 800, 1 Bell's 0(m. i. 249. ^ " The seller must take some active step for resuming the possession'' — Bell's Gom. i. 250. ' ' Here the seller was not vigilant : he did not get the goods into his possession ; he suffered creditors to arrest, and the goods to come into public custody for the benefit of the arresting creditors." — Per Lord Meadowhank in Fotkeringham v. Somerville avd Co. (26th May 1809), F.C. 2 Robertson v. More (1801), Mor. App. Sale, No. 3 ; Baxter v. Pearson (1807), Hume 688 ; Drake v. M'Millan (1807), Hume 691 ; Neish v. Trompomhy and Co. (1807), Hume 693 ; Turner v. Trustees of Liverpool Docks (1851), 6 Ex. 643 ; Schotsman v. X. and Y. By. Co. (1867), 2 Ch. App. 332 ; Bemdtson v. Strang (1867), L.R. 4 Eq. 481 (1868), 3 Ch. App. 588 ; Ex parte Eosevear China Clay Co. (1879), 11 Ch. Div. 560 ; In re Bruno, Silva, and Son (1887), 56 L.T. N.S. 577— Bell's Pri7i., Sect. 1308 ; Ben- jamin, pp. 856 et seq. Baxter v. Pearson is considered by M'Laren to be an unsound decision — Bell's Com. i. 233, note. See as to goods shipped in a general ship in the buyer's name — M'Leod and Co. v. Harrison (1880), 8 Ret. 227. The statement in Bell's Prik. (Sect. 1308) is subject to qualification. * Melrose v. Rastie (1851), 13 D. 880, 14 D. 268. 6 1 B. & C. 181. ^ Compare this case with Collins v. Marquis' Creditors:{180i), Mor. 14223, and Robertson and Aitken v. More (1801), Mor. App. Sale, No. 3. RIGHTS OF UNPAID SELLER AGAINST GOODS. 223 note (m)], from which cases the editors of the fourth edition ^ Sect. 45. deduce the following rule : — " It rests with the party who relies on the part delivery as a constructive delivery of the whole, to prove the intention to make it operate as a delivery of the whole. This proof may be established (1) from the circumstances under which the delivery took place, e.g. the purchaser may at the time express his intentiori to take the whole of the goods, although he actually takes only a part ; or (2) perhaps, in some cases, from the intrinsic nature of the goods delivered, as e.g. where the cargo consists of an entire machine, and an essential portion of it is delivered to the purchaser.^ Further, where the shipowner or carrier has not been paid in full his freight or charges, there is a strong presumption that he intends to retain his lien, and part delivery will not operate as a con- structive delivery of the whole, unless it can be shown that the shipowner or carrier assented to the buyer's taking possession of the goods without payment of freight or charges." ^ As, in lien, the seller's privilege is merely that of deten- Effect of tion of the goods in security of the price, so, in stoppage in seihir'^rights transitu, the right cannot be exercised in respect of freight. Claims for insurance, or other expenses or damages.* Bell indeed goes s^^e'and further, and, founding on a dictum of Lord Thurlow, he damages, suggests that, " as the title to stop in transitu arises from a voidance of the contract,^ and the act of stopping puts ^ Messrs A. B. Pearson-Gee and H. F. Boyd. 2 Ex parte Cooper (1879), 11 Ch. Div. 68. In Girdwood and Co. v. Pollock and Co. (1827), 5 Sh. 507, the question was raised but not decided, whether delivery of part of a machine which a manufacturer was employed to make, and for which a bill had been granted, transferred the property of the part. ^ Brodie questions the Scottish case of Collins v. Marquis' Creditors (1804), Mor. 14223, on the ground that it is inconsistent with the rule in England whence stoppage in transitu is derived, but his notion of the English law on this subject is not founded on decision, but on an d. priori view of what it is, or ought to be. See Brodie's Stair, p. 883 and note. * On the other hand, the seller is not liable for a premium of insurance from which he derives no benefit — Smith and Jamieson v. Drake (9th March 1809), E.G. ^ The contract may be rescinded without necessarily excluding a claim for damages at the instance of one of the parties as, e.g., under Sect. 48 (4), but in the ordinary case the contract is not rescinded [Sect. 48 (1)]. The tendency of Scottish decisions was to hold the contract void. See Kincaid v. Murray and Henderson (1798) as reported in Bell's Com. i. 253, note, and cited 224 SALE OF GOODS ACT 1893. Sect. 45. things into the same situation between the vendor and vendee as if there never had been any transaction between them relative to the goods so stopped, the stopper can raise no charge against the bankrupt's estate respecting such goods, though the contract had in part been fulfilled by carrying them so far, or insuring them."-' This, however, was not law in Scotland even before this Act,^ and it is clearly inconsistent with Sect. 48. Sect. 46. 46. — (1.) The unpaid seller ^"^ may exercise his How STOPPAGE right ^'^ of stoppage in transitu either by taking actual IN TRANSITU O 1 J. O JO IS EPPBOTED. possession ^"^ of the goods, or by giving notice ^'^^ of his claim to the carrier or other bailee or custodier ^'^ in vvrhose possession the goods are.^-''^ Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his servant or agent in time to prevent a delivery to the buyer. ^^^ (2.) When notice of stoppage in transitu is given by the seller to the carrier, or other bailee or custodier ^'^ in possession of the goods, he must re- sub nom. Murray and Henderson v. Kineaid (1796) in Sinclair and William- son's GredUors v. Bolertson and Aitken (1801), Mor. App. Sale 3. ^ Bell's Com. i. 253. See also Bell's Com. i. 250 et seq. The opinion attributed by Bell to Lord Thurlow is said by him to have been expressed in Allan, Steuart, and Co.'s Case, but no remark of that description is to be found in the ordinary report. Elsewhere, Bell informed his readers that he had much communication with Lord Thurlow after the decision {Com. i. 223), in reference to which statement, Brodie brusquely remarked that it seemed "pretty evident from the learned commentator's misconception of the English law of sale, that he could not derive the just benefit from those com- munications." — Brodie's /Steir, p. 865, note. " See Stoppel and Co. v. Stoddart (1850), 13 D. 61. RIGHTS OF UNPAID SELLER AGAINST GOODS. 225 deliver the goods to, or according to the directions of, Sect. 46. the seller/''^ The expenses of such re-delivery must be borne by the seller.® Notes. (a) " Unpaid seller." Defined Sect. 38. {b) " 3Iay exercise Ms right." This phrase is permissive, and suggests that there are other modes of stoppage in transitu not here specified. Thus, service upon the carrier of an action of interdict [note (d) infra\, and, possibly, also, an arrestment in the hands of the carrier following upon an action by the seller against the buyer, would sufficiently certiorate the carrier of the seller's intention to exercise his right of stoppage. By contrast, where notice is given to a principal as provided in the latter part of the sub-section, the word "must" is used. So also in Sub-sect. (2) the carrier must re-deliver, and the expenses must be borne by the seller. (c) " Actual possession." "The vendor has a right if unpaid, and if the vendee be insolvent, to retake the goods . . . and thereby to replace himself in the same situation as if he had not farted with the actual possession." '^ (d) "Notice." No specific form or solemnity is necessary.^ Bell says "the most unquestionable stoppage is by the warrant of a judge," * but such warrant, though formerly often applied for in Scotland, is quite unnecessary. In Robertson v. More* (1801) the notice was given verbally to the shipmaster by a partner of the seller's firm, and the report bears that "nearly the whole Court were of opinion that, the shipmaster being the custodier for behoof of both parties, private intimation to him was effectual." If, however, judicial proceedings at the instance of the seller are served upon the shipmaster or the principal custodier, the intention to stop will be sufficiently intimated.^ 1 Per Parke, B., in James v. Griffin (1836), 2 M. & W. 623 at p. 632. 2 Bell's Oom. 1. 248 ; Benjamin, p. 882. 2 Bell's Com. i. 249. ^ Mor. App. Sale 3. ^ In Stoppel and Co. v. Stoddart (1850), 13 D. 61, the seller raised a sus- pension and interdict to prevent "the captain of the vessel delivering the cargo either to the buyer or to any person on his account or behoof." Appearance was entered by an indorsee of the bill of lading, but the indorsa- tion being afterwards reduced as a fraudulent preference under the Act 1696 c. 5, the interdict was held an effectual stoppage, and the seller was preferred to the buyer's trustee in bankruptcy. 226 SALE OF GOODS ACT 1893. Sect. 46. In England, the seller has a remedy by injunction/ and, on the same principle, an interdict is competent in Scotland.^ («) '■^'Bailee' in Scotland includes custodier" [Sect. 62 (1)]. See Sect. 45, note (d), ante, p. 210. (/ ) Carrier in possession. Possession by a carrier is sometimes called " constructive delivery " to the buyer. ^ Delivery to the carrier is primA facie delivery to the buyer [Sect. 32 (1)]. (g) Notice to principal not having actual custody. "To make a notice effective as a stoppage in transitu, it must be given to the person who has the immediate custody of the goods, or, if given to the principal vrhose servant has the custody, it must be given at such a time and under such circumstances, that the principal, by the exercise of reasonable diligence, may communicate it to his servant in time to prevent the delivery to the consignee. . . . The only duty that can be imposed on the absent principal is to use reasonable diligence to prevent the delivery." * (h) Re-delivery to the seller. In the case of The Tigress^ (1863) it was determined by Dr. Lushington that the seller has a right to demand re-delivery to himself, and that the carrier has no right to say that he will retain the goods for delivery to the true owner after the conflicting claims have been settled. It is not a matter ordinarily within the seller's cognisance whether or not the buyer has indorsed the bill of lading. The seller " exercises his right of stoppage at his own peril, and it is incumbent on the master to give effect to a claim as soon as he is satisfied it is made by the vendor, unless he is aware of a legal defeasance of the vendor's claim." ^ If the carrier is in real doubt he will in 1 Schotsman v. L. and Y. My. Go. (1867), 2 Ch. 332 at p. 340. 2 Stoppel and Co. v. Stoddart amd Co. (1850), 13 D 61. In Mortmi and Co. V. Ahercromhy (1858), 20 D. 362, the sellers applied for interdict to pre- vent the ship sailing with their goods on board. The service on the ship- owner would, no donbt, have been a good stoppage had the right existed. In Booker and Co. v. Miln£ (1870), 9 Macp. 314, goods rejected by an insolvent buyer, and lying on the quay where they had been landed, were stopped by the seller by means of an application for interdict and warrant to take possession. 3 "The delivery by the vendor of goods sold to a carrier of any description, either expressly or by implication named by the vendee, and who is to caiTy on his account, is a amstrucUve delivery to the vendee " Per Parke B in James v. Gnffin (1836), 2 M. & W. 623 at p. 632. ' '' * Per Parke, B., in Whitehead v. Anderson (1842), 9 M. & W 518 at pp. 533, 534. In Ex parte Falk (1880), 14 Ch. Div. 446, doubt was expressed by Bramwell, L. J., as to the obligation of a principal to send notice of stoppage to his agent [14 Ch. Div. at p. 455], and, in the same case, James, L. J., said regarding Whitehead v. Anderson, that it was not a judicial decision that any such duty is imposed on the shipowner [14 Ch. Div. at p. 450]. But, on the case going to the House of Lords, Lord Blackbiirn expressed a strong opinion in favour of the law as now laid down in this section— ^emp v. Falk (1882), 7 App. Cas. 573 at p. 585. ' 32 L.J. Adm. 97. « 32 L.J. Adm. at p. 101 Effect of sub-sale or pledge bt BUYER. RIGHTS OF UNPAID SELLER AGAINST GOODS. 227 England, resort to an interpleader,^ and in Scotland, to the Sect. 46. analogous remedy of a multiplepoinding.^ (i) Expenses of re-delivery. This provision was added in Com- mittee. The carrier will probably have a lien for these expenses, as well as for his charges under the original contract of carriage. The question, however, is not free from difficulty. Re-sale by Buyer or Seller. 47. Subject to the provisions of this Act,^"^ the Sect. 47. unpaid seller's ^*^ right of lien or retention ^"^ or stop- page in transitu is not affected by any sale, or other disposition^*^ of the goods which the buyer may have made, unless the seller has assented thereto.^^^ Provided that where a document of title ^'> to goods has been lawfully transferred^*^ to any person as buyer or owner ^^^ of the goods, and that person trans- fers the document to a person who takes the document in good faith ^*^ and for valuable consideration,^-''^ then, if such last-mentioned transfer was by way of sale the unpaid seller's right of lien or retention or stoppage in transitu is defeated, and if such last-mentioned transfer was by way of pledge or other disposition for value,^*^ the unpaid seller's right of lien or reten- tion or stoppage in transitu can only be exercised subject to the rights of the transferee.® Notes. (a) "Provisions of this Act." E.g. Sect. 25 (2). (J) " Unpaid seller." Defined Sect. 38. (c) "lAen or retention." "'Lien' in Scotland includes right ' "The master may sometimes suffer for an innocent mistake, but he can always protect himself from liability by filing a bill of interpleader in Chancery." — Per Dr. Lushington in The Tigress, 32 L.J. Adm. at p. 102. ^ In Scotland "plaintiff" includes "claimant in a multiplepoinding, " and "action" includes "condescendence and claim" [Sect. 62 (1)]. 228 SALE OF GOODS ACT 1893. Sect. 47. of retention" [Sect. 62 (1)]. If retention has not the same meaning -as lien, an important change in the law of Scotland is involved. See Com., Sect. 39 ante, p. 186. {d) "Sale or other disposition" by buyer. The buyer cannot enter into a sub-sale so as to give the sub-buyer a title free from the unpaid seller's remedies, unless by means of a document of title in terms of the proviso attached to the section.^ As to pledge or other disposition for value, see notes (A) and (l) infra. (e) " Unless the seller has assented tJiereto." The consent of the seller amounts to a waiver of his remedies. See Fleming v. Smith and Co.^ (1881), and Com., Sect. 41 ante, p. 195. ^ (/) " 'Document of title' has the same meaning as it has in the Factors Acts"* [Sect. 62 (1)]. See Com., Sect. 25 ante, p. 1 25. A collection of Scottish cases is contained in Appendix II. IV. post, p. 331. (g) " Lawfully transferred." A " document of title " as defined by reference [see note (/) supra] differs from a bill or note in respect that the title of the holder depends on the title of the assignor, and is not inherent in the instrument itself. The holder of a stolen "document of title" cannot give a good title to an assignee, even if the latter acts bond fide and has given valuable consideration. Perhaps the word " lawfully " has refer- ence to this fact. See Com., Sect. 25 ante, p. 126. {h) " Buyer or owner." The right thus liable to be defeated is one in favour of an "unpaid seller" (Sect. 38) and operates against a buyer. The word " oioner " may refer to one in the position of a buyer, such as an agent buying on his own credit. See Sect. 38 (2). (i) "In good faith." Defined Sect. 62 (2). If the buyer knows the transferror to be insolvent, the transfer will be ineffectual, but mere knowledge that the price is unpaid is not inconsistent with " good faith," because credit is a usual incident in mercantile dealings. (j) " Valuable consideration." In Scotland, the transfer may be reduced as a fraudulent preference, if granted to a creditor in satisfaction of a prior debt.^ Such a transfer would apparently be effectual in England.** 1 M'Ewen amd Co. v. Smiths (1847), 9 D. 434 ; Affd. H. of L. (1849), 6 Bell's App. 340. 2 8 Ret. 548. * See also the English cases Stoveld v. Hughes (1811), 14 East 308 (express assent of seller); and Pearson v. Dawson (1858), E. B. & E. 448 (implied assent). « 52 & 53 Vict. c. 45, and 53 & 54 Vict. c. 40. * Stoppel V. Stoddart (1850), 13 D. 61 yAdamson, Hovrie, and Co. v. Ouild (1868), 6 Maop. 347. ^ Leash \. Scott (1877), 2 Q.B.D. 376, An opposite decision was given in Rodger v. Comptoir d'Escompte (1868), L.R. 2 P.O. 393, before the RIGHTS OF UNPAID SELLER AGAINST GOODS. 229 (k) " Pledge or other disposition for value." The general pro- Sect. 47. visions of the Act do not apply to " a transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security " [Sect. 61 (4).] (I) " Rights of the transferee." " The vendor's right of stop- page will remain, so far as to entitle him to any surplus proceeds after satisfying the creditors to whom the bill of lading was transferred as security, and the vendor will have the further equit- able right of insisting on marshalling the assets ; that is to say, of forcing the creditor to exhaust any other securities held by him, towards satisfying his claim, before proceeding on the goods of the unpaid vendor." ^ In Scotland, the transferee of a bill of lading who has other securities, is a catholic creditor, and cannot capriciously injure the secondary creditor (the seller) by claiming his whole debt out of the goods, leaving the other securities free, or only liable for the balance.^ In Kemp v. Falh^ (1882) the House of Lords had under consideration whether, in the case of a sub -sale, stoppage in transitu could be made available against the purchase money payable to the intermediate seller. ' \ ■ The case Ex parte Golding, Davis, and Co.^ (1880) seemed to favour this view, but it was unnecessary in Kemp v. Falh to decide the point. Lords Blackburn and Watson refrained from offering any opinion, but Lord Selborne said : " I assent entirely to the proposition that where the sub-pur chaserrs get a good title as against the right of stoppage in transitu, there can be no stoppage as against the purchase money payable by them." In Ex parte Golding and Co.'s Case the bill of lading had not been effectually transferred, and therefore the decision, apart from the dicta, does not conflict with Lord Selborne's opinion.^ The provision of this section that the seller's right is "- defeated " seems to follow on the lines of Lord Selborne's judgment. 48, — (1.) Subject to the provisions of this section, Sect. 48. a contract of sale is not rescinded ^"^ by the mere sale not •' GENERALLY exercise by an unpaid seller ^^ of his right of lien or kescindbd J r ° BT LIEN OR retention or stoppage in transitu.^"' stoppage in Judicial Committee of the Privy Council, but decisions before that Committee, though entitled to great weight, are not binding on the English Courts. 1 Benjamin, p. 892. Me Westzinthm (1833), 5 B. & Ad. 817 ; Spalding v. Sliding (1843), 6 Beav. 376. The principle was approved and adopted in Xemp V. FalJc (1882), 7 App. Cas. 573. 2 See Bell's Com. ii. 418. ^ 7 ^pp. Cas. 573. ^ 13 Ch. D. 628. ^ See Benjamin, p. 893 et seq. 230 SALE OF GOODS ACT 1893. Sect. 48. (2.) Where an unpaid seller ^''^ who has exercised his right of lien or retention or stoppage in transitu re-sells the goods, the buyer acquires a good title thereto as against the original buyer/'^^ (3.) Where the goods are of a perishable nature/'^ or where the unpaid seller ^"^ gives notice ^•''^ to the buyer of his intention to re-sell, and the buyer does not within a reasonable time '■^^ pay or tender '•^'^ the price, the unpaid seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract/*^ (4.) Where the seller expressly reserves a right of re-sale in case the buyer should make default, and on the buyer making default, re -sells the goods, the original contract of sale is thereby rescinded, but without prejudice to any claim the seller may have for damages/*^ Notes. (a) Sale not rescinded. See Com., infra, p. 231. \h) " Unpaid seller." Defined Sect. 38. (c) " lAen or retention or stoppage in transitu." See Sects. 39 and 41 to 46. As to "retention" see Com., Sect. 39 ante, p. 186. (d) The second buyer from an unpaid seller acquires a good title. The same result may be reached under Sect. 25 (1), but, under that section, the second buyer must act in good faith and without notice, and must have received delivery of the goods. No such conditions are here prescribed, but on the other hand, the opera- tion of the present section seems confined to cases where the original buyer is in default, while Sect. 25 is general in its application. A seller who re-sells after unwarrantably stopping the goods in transitu or otherwise acting in breach of the con- tract, cannot confer a good title upon a second buyer under the present section,'- but he may do so under Sect. 25, subject to 1 See, e.g., Cohen v. Foster (1892), 61 L.J. Q.B. 643. RIGHTS OF UNPAID SELLER AGAINST GOODS. 231 the conditions of that section. In the one case, it is a privilege Sect. 48. accorded to a bond-fide second buyer irrespective of the position or default of the original seller [Sect. 25 (1)] ; in the other, it is right vested, under certain conditions, in the original seller, of which any second buyer from him obtains the benefit [Sect. 39 (1) (c) as qualified by Sub-sect. (3) of the present section]. («) Goods of a perishable nature. " It is admitted that perish- able articles may be resold. It is difficult to say what may be considered as perishable articles, and what not." ^ In Maclean v. JDunn^ (1828) the rule as to re-sale was extended to articles whether perishable or not, on the ground that " in that respect there is no difference between one commodity and another." In the words of Best, C. J., "it is a practice founded on good sense to make a re-sale of a disputed article, and to hold the original contractor responsible for the difference." ^ No defini- tion of " perishable " is given in the Act. (/) Notice. No special form is provided or required. Any reasonable notice will be sufficient.* {g) " Reasonable time " is a question of fact (Sect. 56). (h) "Pay or tender." See Sect. 41, note (e) ante, p. 191. (i) Recovery of damages. As to the measure of damages see Sect. 50. (k) Reservation of right of re-sale. See Com. infra, p. 232. Commentary. Under the former law of Scotland questions as to re- Be-seiiing selling the goods and rescinding the contract could only f°s°c'incUng cou- arise in connection with stoppage in transitu. Previous to tract under the commencement of the transitus by delivery to the g°oTian(L^° carrier, the seller, being undivested owner, could do what he pleased with his own. In the event of his breach of con- tract, the buyer became liable in damages without any right to control the disposal of goods over which he never had any right of property. In a purely personal contract, a breach by one party could not operate rescission in the 1 Per Best, C. J., in Maclean v. Dumi (1828), 4 Bing. 722 at p. 728. 2 i Bing. 722. ' 4 Bing. at p. 728. * Maclecm v. Dunn {supra). See also Jacques, Serruys, and Co. 7. Watt (12th February 1817), F.C. "If the re-sale was conducted by the vendor in a fair and reasonable manner, the original purchaser who was in default would have no right to complain." — Blackburn on Sale, p. 446. 232 SALE OF GOODS ACT 1893. Sect. 48. Uncertainty in law of Scot- land after introduction of stoppage m Under former law, contract not rescinded. Effect of ex- press power to re-sell. sense of freeing both parties from obligation, but freed the party not in fault, and left his remedy against the other unimpaired. But, after the doctrine of stoppage in transitu had been imported from England into Scotland, great uncertainty prevailed as to the footing on which the seller held the goods when they had been returned into his possession after the stoppage. In England, he could only hold them by a right analogous to his former lien for the price, but in Scotland, the seller's former right being one of ownership, it was doubted whether on regaining possession he became re- invested in that right, or whether he held the goods on the same footing as the seller in England. The conclusion generally arrived at was that the seller was replaced in the position he would have occupied had he never parted with the goods, and thus stoppage in transitu came to have a much more powerful effect in Scotland than in England whence the right was derived.-' ^ » Neither in Scotland nor in England was the contract rescinded by the buyer's default,^ unless rescission was expressly stipulated, and therefore the dictum, referred to in connection with Sect. 45* as attributed by Bell to Lord Thurlow in Allan, Steuart, and Co.'s Case * was not law before this Act, and is clearly inconsistent with this section. Where the contract expressly stipulates a power to re-sell, the sale is rescinded, but not to the effect of totally setting it aside so as to prevent any claim against the buyer in respect of his breach. The effect upon the buyer's right of this species of rescission may, however, be very important. " He runs all the risk of re-sale without any 1 See M. P. Brown on Sale, p. 441 ; Benjamin on Sale, pp. 898 et seg. " As to Scotland, see Stoppel and Co. v. Stoddart (1850), 13 D. 61 ; Adam- son, Hovm, and Co. v. Chdld (1868), 6 Maep. 347, per Lord Barcaple at p. 354. But see Booker and Co. v. Milne (1870), 9 Macp. 314, where the sale was said to have been rescinded hy the seller.' The question at issue did not involve any ranking for damages upon the bankrupt buyer's estate, and probably it was not intended by the so-called rescission to exclude such a claim. As to England see Blackburn, p. 484 ; Benjamin, p. 898. ' Ante, p. 223. " In House of Lords sub nom. Jaffrey v. Allan, Stewart, and Co. (1790), 3 Pat. App. 191. See Bell's Com. i. 250, 251. RIGHTS OF UNPAID SELLER AGAINST GOODS. 233 chance of profit, for he has clearly no right to the surplus Sect. 48. if the goods are sold for a higher price." ^ It is not necessary to obtain a judicial warrant for the Judicial re-sale,^ though Bell suggests that such is the " correct course." ^ warrant. ^ Benjamin, p. 796. The converse is thus shown: — "If goods are sold for £500, and after being stopped m transits, beoome worth £1000 by a rise in the market, the vendor must deliver them to the vendee or his creditors upon receiving the £500 " (M. P. Brown, p. 441). If the sale is rescinded this profit goes to the seller. ^ See Hain v. Laing and Sons (1853), 15 D. 667. In many cases where a judicial warrant had been obtained, the Court treated the fact as unimportant, e.g. Warin and Craven v. Forrester (1876), 4 Eet. 190 ; Affd. (1877) 4 Ret. H.L. 75. ^ Bell on Sale, p. 109. Bell had not the benefit of the later decisions. PRICE. PART V. ACTIONS rOE BEEACH OF THE CONTEACT. Remedies of the Seller. Sect. 49. 49. — (1.) Where, under a contract of sale/"^ the Action fok property in the goods has passed to the buyer,^^ and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract/"^ the seller may maintain an action ^"^^ against him for the price of the goods/'^ (2.) Where, under a contract of sale,^"^ the price is payable on a day certain irrespective of delivery,^-'^^ and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed,^''^ and the goods have not been appropriated to the contract/^^ (3.) Nothing in this section shall prejudice the right of the seller in Scotland to recover interest on the price from the date of tender of the goods, or from the date on which the price was payable, as the case may be.^''^ Notes. (a) "Contract of sale." Defined Sects. 1 and 62 (1). (h) Property passed to buyer. See Sects. 1 7 and 1 8. ACTIONS FOR BREACH OF THE CONTRACT. 235 (c) Buyer's failure to pay price. See Sects. 27 and 28. The Sect. 49. refusal to pay must be " virmgful." The mere fact of the pro- perty having passed will not give the seller a right of immediate action for the price, unless, under the express or implied terms of the contract, the price is immediately payable. {d) '^'Action' includes counterclaim and set off, and in Scotland condescendence and claim and compensation." Sect. 62 (1). («) Right of action. See also Sect. 57. (/) "Day certain irrespective of delivery.'" See CoM., infra, p. 236. {g) "Appropriated to the contract." See Sect. 18, Eule 5, and Com., ante, p. 95. (A) "Interest on the price." Sects. 54 and 61 (2) seem to reserve the seller's right to interest in Scotland, thus rendering this provision superfluous. See Com., infra, p. 236. COMMENTAEY. Under this and the following section the seller's remedies Seller's in Scotland are somewhat altered. Formerly, in the event seaUand "^ of a breach by the buyer, the seller had in every case alter- altered, native remedies ; (1) he might sue for the price provided he continued in a position to offer the goods,^ or (2) he might retain the goods and claim damages, subject to an obligation to lessen the damage by a re-sale where a market was available.^ But under the Act where the property has not ^ Bell's Oom. i. 472. Substituted goods, though of the same quality, will not do — Thomson Brors. v. Thomson (1885), 13 Ret. 88. ^ The obligation to re-sell has been strangely misunderstood. Thus in Thomson Brothers v. Thomson (1885), 13 Ret. 88, the Sheriff-Substitute found that the seller had not the alternative remedy of an action for the price, and that re-sale and damages was his only remedy. This view was founded on Warin and Craven v. ForresUr (1876), 4 Ret. 190, Affd. (1877), 4 Ret. H.L. 75, where Lord President Inglis said : " Re-sale is the only proper remedy for parties in the position of the pursuer to adopt." But in Warin' s Case there was no question of an action for the price, and the Lord President's remark applied only to the seller's obligation as stated in the text. The Sheriff- Substitute's judgment in the case of Thomson Brothers was not supported by the Court. Another instance of misapprehension of the principle of the seller's remedy in Scotland prior to this Act, is furnished by the Sheriff Court case Cuthill v. M'Laehlan (1874), Guthrie's Sel. Cas. 1st ser. 520, where the seller's rights as undivested owner were entirely lost sight of, and his position was treated as analogous to that of a buyer having the custody of rejected goods. No such analogy existed, for, in the case of the buyer, the goods were clearly not his property, and he merely held them as involun- tary custodier or bailee for the seller. See as to the alteration in the seller's duty of custody in Scotland Com., Sect. 37 ante, p. 177. 236 SALE OF GOODS ACT 1893. Sect. 49. Comparison between Scottish and English law. Price payable on a fixed day. Interest on the price in Scotland. English law i to interest. passed, and where the price is not payable upon a day certain irrespective of delivery, the seller is restricted to a claim of damages. The difference between the English law as embodied in the Act and the former law of Scotland, is to a certain extent lessened by the fact that in Scotland, it was neces- sary to an action for the price of goods to be manufactured or acquired that the goods themselves should be ready for delivery,^ while in England, the goods in such circumstances were, and are, often appropriated to the buyer so as to pass the property and permit of an action for the price (Sect. 1 8, Eule 5). In England, however, the buyer's consent, express or implied, is necessary to the appropriation, while in Scot- land the seller could sue for the price without such consent. Under sub-section (2) the seller can sue for the price even although the property has not passed, if it is part of the contract that the price be paid on a fixed day. " A vendor may well say to a buyer, ' I want the money on such a day, and I will not sell unless you agree to give me the money on that day, whether you are ready or not to accept the goods ' ; and if these terms be accepted, the vendor may recover the whole price of goods the property of which remains vested in himself In such a case the buyer would be driven to his cross action, if the vendor after receiving the price should refuse dehvery of the goods." ^ Sub-section (3) reserves the seller's right in Scotland to recover interest on the price, but Sect. 54, taken in connec- tion with the reservation of the rules of the common law contained in Sect. 61 (2), practically does the same thing. The sub-section therefore seems unnecessary. In England, interest is not recoverable on the price of goods sold,^ but if the contract is in writing, and if the price is a " debt or sum certain payable at a certain ^ Where the buyer refused to take delivery, the fact that the seller after- wards pledged the goods to a third party in security of a temporary advance, was held no bar to an action at his instance for the price, he being in a position to redeem them and to give delivery at any time — Athya arid Co. v. Howell and Co. (1856), 18 D. 1299, per Lord Justice-Clerk Hope at p. 1300. " Benjamin, p. 761. See Dtmlop v. Grote (184.')), 2 C. & K. 153. ^ Mayne on Damages, 5th ed. p. 162. ACTIONS FOR BREACH OF THE CONTRACT. 237 time," interest may be allowed under 3 & 4 William Sect. 49. IV. c. 42, Sect. 28. In Duncomle v. Brighton Club^ (1875) the price was payable " one third in cash, and bills at six and twelve months for balance." It was held by a majority of the Court that '' one third in cash " was a sufficient specification under the Act to allow of interest from the date of the goods being delivered. Lord Blackburn dissented from this judgment, but, on the general question, he said : " I confess that it seems to me in reason and common sense, that if the money for goods sold and delivered is not paid at the proper time, it should be paid with interest, but the rule at common law did not give interest in such a case." ^ In Scotland, the seller can always sue for the price and Rules as to interest from the date when the money should have been g^^o^t^and" paid. This proceeds on implied agreement on the part of the person in default to pay for the use of the money held by him in breach of his contract.^ Among the Scottish rules as to the commencement of interest, the following are stated by Bell : — " (1) Where there is an express agreement concerning the commencement of interest, it rules the case. (2) Otherwise, in the general case, interest runs from the stipulated day of payment. (3) Where the day of payment is optional, interest runs only from the day ascertained by the act declaring the option. . . . (8) Interest on merchants' accounts of furnishings begins on the expiration of the ac- customed credit ; or if there be no special custom to regulate it, from the date of citation when the money should have been paid." * Damages foe non-aooept- ANOB. 50. — (1.) Where the buyer wrongfully neglects or Sect. 50, refuses to accept and pay ^"^ for the goods, the seller may maintain an action ^''^ against him for damages for non-acceptance. ' L.R. 10 Q.B. 371. 2 L.E. 10 Q.B. at p. 374. ' M. P. Brown on Sale, p. 348 ; Bell's Frin., Sect. 32 ; Bell's Com. i. 692 ; 2nd Report of Mer. Law Com. 1855, p. 47. " Bell's Com. i. 694. 238 SALE OF GOODS ACT 1893. Sect. 50. (2.) The measure of damages ^°^ is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer's breach of con- tract. (3.) Where there is an available market ^''^ for the goods in question the measure of damages is prim^ facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted,^'' or, if no time was fixed for acceptance, then at the time of the refusal to accept/-'^ Notes. (a) ''Accept and pay." See Sect. 27 note (6), ante, p. 129. The general duties of the buyer in performance of the contract are contained in Part III. of the Act, Sects. 27 to 37 inclusive. (6) " Action " includes in Scotland condescendence and claim and compensation [Sect. 62 (1)]. See also Sect. 57. (c) "Measure of damages." See Com., infra, p. 239. (d) "Available market." See remarks of James, L. J., in DunMrk Hill Colliery Co. v. Lever ^ (1878). (e) Time or times fixed for acceptance. As to instalment deliveries see Sect. 31 ante, p. 147. The measure of damages vrill be fixed as at the date when the goods or instalments thereof are deliverable, not as at the date of a refusal by the buyer to accept, if these respective dates do not correspond. But see Com., Sect. 51 post, p. 248. (/) Difference between contract price and market price. See Com., infra, p. 239. COMMENTAKY. Seller's rights Where the property has passed, the seller has the option action. ^£ ^^ action for the price under Sect. 49, or an action for damages under this section. Where the property has not 1 9 Ch. Div. 20 at p. 25. ACTIONS FOR BREACH OF THE CONTRACT. I'y) passed, the seller is confined to an action of damages, except Sect. 50. in the special case provided for in Sect. 49 (2). Sub-section (2) is practically the first part of the well- 'R,\\\&oiEadUy known rule laid down in HadUy v. Bax&ndaU^ (1854), [flrftTartf where Alderson, B., said : " Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered as arising naturally, i.e. according to the usual course of things, from such breach of contract itself." ^ The sub-section is the rule as to general damages, but it General and has often been departed from in circumstances giving rise to ^am^es. what are known in England as special damages. Action for such special damages is reserved by Sect. 54.^ In Scotland, general damages have not hitherto been dis- Scottish rule tinguished from special damages. The latter phrase covers, ^ *° 'i^™^^^- at least in part, the Scottish rule, which is said to have been that all the circumstances of the case must be con- sidered.* The alleged rule in the law of Scotland went further, and on the authority of Bunl Notes. (a) "Breach of warranty.'' "As regards Scotland a breach of warranty shall be deemed to be a failure to perform a material part of the contract" [Sect. 62 (1)]. See also Sect. 11 (2). (6) "Seller," "buyer." Defined Sect. 62 (1). The claim for damages is only against the seller, not against a sub-contractor under the seller — Blurmr and Co. v. Scott and Sons (1874). ^ (c) "Elects or is compelled." See Com. infra, p. 253. (d) Conditions and warranties. See Sects. 10 to 15. («) " By reason only." The buyer may be entitled to reject the goods on some other ground, such as fraud. (/) Buyer not entitled to reject the goods. The same result follows from the definition of "warranty" in Sect. 62 (1) (England and Ireland). See also Sect. 11 (1). {g) Diminution or extinction of price. See Com., Sect. 1 1 ante, p. 54. If the price has been already paid the buyer may recover it. In Scotland, the action is for repetition {condictio indehiti), while in England, the right to recover is based upon the " consideration " having wholly failed.^ (A) Damages for breach of warranty. Recovery of the price if paid, will not affect the buyer's claim for damages in respect of the seller's failure to implement the contract. Repayment of 1 1 Ret. 379. ^ See Notes ou the English doctrine of " Consideration," Appendix III. post, p. 341. ACTIONS FOR BREACH OF THE CONTRACT. 253 the price and damages may competently be sued for in the same Sect. 53. action. See Com., Sect. 51 ante, p. 242. (i) " Measure of damages." The ordinary measure of damages is here applied to breach of warranty. In Sects 50 (2) and 51 (2), it is applied to breach of contract by buyer and seller respectively. (i) " ' Qiuility of goods ' includes their state or condition " [Sect. 62 (1)]. {k) Breach of warranty of quality. Compare this provision vrith. Sects. 50 (3) and 51 (3). (I) Action for further damage. See Com. infra, p. 254. (m) Right of rejection in Scotland. See Sect. 11 (2). COMMENTAEY. In England or Ireland, a buyer may elect to treat a con- Damages in dition which would give him the right to repudiate the eondiw and contract as a mere breach of warranty entitling him only warranties. to damages [Sect. 11 (1) (a)], or, where he has accepted goods and ScotiLT or the property has otherwise passed to him, he may be com- compared. pelled to treat a condition as a warranty [Sect. 11 (1) {cj]} In Scotland, the buyer has necessarily a power of election between the alternative remedies of repudiation and damages provided by Sect. 11 (2), and the mere passing of the property will not, as in England, compel a buyer to accept damages where he would otherwise be entitled to reject and repudiate. On the other hand, if a buyer in Scotland does not timeously reject goods which are not in terms of the contract, his remedy of repudiation is gone. Under the former law of Scotland the buyer had no remedy Efifect of Act except rejection and repudiation, but now he may elect g^oSandT ° between that right and the English remedy of damages. If by neglect to reject the goods, or in any other way, the buyer has lost the right to repudiate, he may still fall back upon his new remedy. There is no provision for notice to Notice of the seller of the buyer's intention to claim damages, but stXtray _ requisite. 1 In Heyworth v. Hutchitison (1867) L.R. 2 Q.B. 447, there are dicta to the effect that if the goods are specific, even although the property has not passed, the buyer is restricted to an action on the warranty and is not entitled to reject. But see criticism by Benjamin {Sale, p. 936 et seq.). 254 SALE OF GOODS ACT 1893. Sect. 53. Eejeotion where justified infers non- delivery. This section does not apply to rejection. Diminution or extinction of price — farther Mondd V. Steel. Rule as stated by Parke, B. unreasonable delay in intimating a claim will form a strong presumption against its validity.^ "Where in Scotland, the buyer's right to reject under Sect. 11 (2) is properly exercised, the seller is in no better position than if he had failed by non-delivery, and the buyer's remedy in damages proceeds under Sect. 51. Under the present section there is no repudiation of the contract. The buyer keeps the goods, but as in Sects. 51 and 53, the true value is to be ascertained as at the time of delivery and put against the contract value.^ Under sub-section (4) a deduction from the price, or even its total extinction, will not prevent a claim by the buyer for further loss if such has been sustained. Thus, for example, the failure of a seed crop may extinguish the obligation to pay the price, yet it does not necessarily form the limit of the buyer's damage, for his field njay have been rendered useless for other crops, and he may have been at expense in tilling and sowing. Or, again, the subject of sale, when applied to the buyer's goods, may through its bad quality, have caused permanent injury to the goods themselves as in Birnie aTid Co. v. Weir^ (1800), and Pontifex and Wood v. Robertson^ (1876). The sub- section is chiefly founded on Mendel v. Steel ^ (1841), where under a contract for a ship to be built, the buyer obtained an abatement in an action at the seller's instance for the price, and after a voyage, which disclosed further defects, he suc- cessfully maintained an action against the seller for special damage. ■ But the case largely depended on English rules of pleading as these existed before the Judicature Acts of 1873 « and 1875.7 " The rule is," said Parke, B., " that it is competent for the defendant not to set off by a procedure in the nature of a cross action the amount of damages ^ See Com:, Sect. 11 ante, p. 54. ^ The price may form the measure of the damages as in Wright v. Slack- wood (1833), 11 Sh. 722. See also Adamson v. Smith (1799), Mor. 14244, where the buyer in pursuing an action of damages restricted the amount to the price and interest, and In respect of the restriction, the damages were so fixed. s H.L. 4 Pat. App. 144. * Shf. Ct. Glasgow, Guthrie's Sel. Cases, 2nd aer. 508. M M. & W. 858. " 36 & 37 Vict. 0. 66. ' 38 & 39 Vict. c. 77. ACTIONS FOR BREACH OF THE CONTRACT. 255 which he has sustained by breach of the contract, but simply to defend himself by showing how much less the subject-matter of the action was worth by reason of the breach of contract ; and to the extent that he obtains, or is capable of obtaining, an abatement of price on that account, he must be considered as having received satisfaction for the breach of contract, and is precluded from recovering in another action to that extent hut no more." -^ The more extensive powers of set-off now granted to a defendant under the Judicature Acts and relative Orders,^ do not seem to have affected the buyer's right to split up his claim into two portions, but how far this will apply to Scotland where a different rule of pleading prevails, may be open to question.^ In Webster and Co. v. Cramond Iron Co.^ (1875), iron pipes were not delivered timeously, but they were ultimately accepted, and the buyers failed to prove that they could have profitably used them before the date of their actual delivery, or that they had suffered any specific pecuniary damage. It was, nevertheless, held that they were entitled to moderate damages in respect of the trouble and incon- venience sustained. Sect. 53. Rules of pleading in England and Scotland. In Scotland, damages may be allowed for trouble and iucouvenience. Interest and SPECIAL DAMAQES. 54. Nothing in this Act shall affect the right of Sect. 54. the buyer or the seller to recover interest ^"^ or special damages ^''^ in any case where by law interest or special damages may be recoverable, or to recover money paid where the consideration for the payment of it has failed. ^"^ 1 8 M. & W. at p. 872. See also Rigge v. Burlridge (1846), 15 M. & W. 598. ^ Under these Acts and Orders a defendant may now set up by way of counterclaim any claim, whether sounding in damages or not, which he has against the claim of the plaintiff (Order XIX., Rule 3), and he is enabled to recover consequential damages which may far exceed the amount of the price sued for by the plaintiff (Order XXI., Rule 17). ' See as to " Competent and omitted," Stair, iv. 1. 44-50 ; Ersk. iv. 3. 3 ; Bank, iv. 36. 16 ; Bell's Com. ii. 259 ; Mackay's Prae. (ed. 1893), p. 312. * 2 Ret. 752. 256 SALE OF GOODS ACT 1893. Sect. 54. Notes. {a) As to interest on the price in Scotland see CoM., Sect. 49 ante, p. 236. (J) "Special da/mages." This phrase covers a distinction in English law which has not been expressly recognised in Scotland, though the result would probably be the same in both countries. It embodies the second part of the rule in Hadley v. Baxendale ^ (1854), where it was said that the damage may be "such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it." ^ (c) Failure of consideration. The doctrine of " Consideration " does not apply to Scotland. See Notes, Appendix III. post, p. 341. ^ 9 Ex. 341 at p. 354. The first part of the rule refers to general damages, and is quoted, Com., Sect. 60, ante, p. 239. ^ See the following English cases as to special damages— i^VefcAer v. Tayleur (1855), 17 C.B. 21 ; Portman v. MiddUton (1858), 4 O.B. N.S. 322 ; Sneed v. Ford (1859), 1 E. & E. 602 ; Cory v. Thames IronworJcs Go. (1868), L.R. 3 Q.B. 181 ; Scmdon v. Andrews (1874), 30 L.T. N.S. 23 ; Hydraulic Engineering Co. v. M'Haffie (1878), 4 Q.B.D. 670 ; Grebert Borgnis V. Nugent (1885), 15 Q.B.D. 85 ; De Mattos v. Great-Eastern Steamship Co. (1885), 1 C. & E. 489 ; Hammond v. Bussey (1887), 20 Q.B.D. 79. PART VI. SUPPLEMENT AEY. 55. Where any right, duty, or liability would arise Seet. 55. under a contract of sale by implication of law/"^ it exclusion of *' -■- IMPLIED TERMS may be negatived or varied by express agreement '^'^ or ^■^ "ondi- by the course of dealing between the parties,^"^ or by usage,^**^ if the usage be such as to bind both parties to the contract. Notes. (a) " BnpUcation of law." E.g. implied conditions and warranties (Sects. 12-15) ; the effect of the rules for ascertaining intention as to passing the property (Sect. 18); the rights of the unpaid seller (Sect. 39). "An implied warranty, as dis- tinguished from an express contract or express warranty, really is in all cases founded upon the presumed intention of the parties, and upon reason." ^ (b) " Express agreement." "Express or special conditions are employed to introduce some point of agreement not naturally implied in the contract, or to alter what is so implied. They may either regulate the payment of the price, or arrange the delivery, or suspend or dissolve the sale in particular events, or give special warranties." ^ ' Per Bowen, L. J., in The Moorcock (1889), 14 P.D. 64 at p. 68, quoted and approved by Lord Esher in ffamlyn and Co. v. Wood and Co. (1891), 60 L.J. Q.B. 734atp. 736. ^ Bell's Prin., Sect. 102. "Le droit oommun des contrats de vente, qui oblige le vendeur envers I'acheteur h. la garantie de la chose vendue, ne eon- S 258 SALE OF GOODS ACT 1893. Sect. 56. (c) " Cmurse of dealing between the parties." See Com. infra, (d) " Usage." See Com. infra, p. 259. Express agree- ment super- sedes implied intention. Requisites of express warranty. Course of dealing. Mackenzie v. Dunlop. OOMMENTAEY. The rule of the section follows the maxim Expressum facit eessare taciturn. In a consensual contract such as sale, all implications of law must give way to the agreement of parties, where such agreement is not illegal. " If there is one thiag more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by Courts of Justice." ^ To render a seller liable in eatress warranty, it is not necessary to use the words " I warrant." " It is quite enough," for example, " that the purchaser says he wishes a horse for a particular purpose, and that the seller says the horse will suit for that purpose. That is quite as good as express words of warrandice." ^ A course of dealing between the parties forms a case of particular as opposed to general usage, but it must be between the parties themselves.* A mere practice on the part of one of the parties to deal generally in the market in a certain manner, will not negative or vary an implication of law. Thus in Mackenzie v. Dunlop oernant qu'un int^ret partioulier des acheteurs, 11 est permis aux parties de d^roger a ce droit par des conventions particulieres " — Pothier, Cont. de Vente, No. 181. ^ Per Jessel, M.R., in TJie Printing and Numerical Co. v. Sampson (1875), 19 Eq. 462 at p. 465, adopted by Fry, J., in Rouaillon v. Eousillon (1880), 14 Ch. Div. 351 at p. 365. 2 Per Lord Cowan in Scott v. Steel (1857), 20 D. 253 at p. 257. But see opinion of Lord Justice-Clerk MonoreiflF in Bose v. Johnston (1878), 5 Ret. 600 at p. 603. Scott V. Steel was followed in Strange v. Jardine (1894), Sh. Ct. Glasgow, 11 Sh. Ct. Repts. 49. A written representation without the use of the word "warrant," was held to be an express warranty in Stewart v. Jamiesnn (1863), 1 Macp. 525. See further, in general illustration, Fasley v. Freemun (1789), 3 T.R. 51 ; Gardiner v. M'Leavy (1880), 7 Ret. 612, and Com., Sect. 14 ante, p. 71. * See Ford v. Yates (1841), 2 M. & G. 549 ; Bourne v. Gatliff (1844), 11 Cl. & Fin. 45 ; Gumming v. Shand (1860), 5 H. & N. 95. SUPPLEMENTARY. 259 and Co} (1856), which was an action between the Sect. 55. granters of iron scrip and an assignee of the original grantee, evidence was allowed before a jury that the granters had been in the habit of admitting an interpreta- tion of the documents which did not appear ex facie. On a bill of exceptions, the Court of Session disallowed the evidence as incompetent,^ but, while affirming the judgment on the issue as put to the jury, the House of Lords suggested that the evidence would have been competent so far as it went to prove general usage, although it was of no General usage. value in so far as it only showed the practice of a particular firm in miscellaneous transactions not constituting a course of dealing between the granters and the holders of the scrip. Lord Chancellor Cranworth said the evidence was "properly admitted, because, though very weak evidence, it was some evidence to show the general usage. General usage can only be proved by the multiplication of particular usages." ^ " If according to the true construction of the notes the iron can, according to the usage of the trade, be said ex facie to mean Clyde and Dundyvan iron, well ; if not, no parol evidence can be admitted to put a construction upon the notes by proving that the persons who had purchased the notes had agreed to receive from the person who sold the notes a particular species of iron." * " If the evidence had been coupled with that of other persons saying that that was what everybody else understood as the usage of the trade, that would have been very sufficient evidence." ^ In mercantile matters, where the proof in Scotland is Effect in insufficient, it may be supplemented by proof of well- |n°gi^h'\isage. established English practice. " In • a question of the merchant law, when any point of practice or any rule of 1 16 D. 129, Affd. H. of L. 3 Maoq. 22. ^ Lord Justice-Clerk Hope said: "We have never in Scotland gone so far as they have done in England in admitting evidence of understanding or usage in order to construe thereby a written document " — 16 D. at p. 139. ^3Macq. at p. 27. * 3 Macq. at p. 36. ^ 3 Macq. at p. 40. See also Calder v. Aitchison and Co. (1831), 9 Sh. 777, Affd. H.L. 5 "W. & S. 410 ; Gibson v. Maguire (1876), Sh. Ct. Glasgow, Guth. Sel. Ca. 2nd ser. 517. 26o SALE OF GOODS ACT 1893. Sect. 55. Requisites of proof of usage. Na1:ure of iisage re- quired. Usage in rela- tion to ready- money sales. When may usage be judicially recognised ? trade is established as the law of England, especially in modern times, and when the reason of the rule is the same in both parts of the island, there is the very strongest presumption that the practice or rule will prevail in Scotland also, unless the contrary be clearly established." ^ A proof of what generally happens is not, however, by itself, a proof of usage.^ Where evidence of usage is com- petent, it must be usage such as is generally understood and acted on. " The proof must be satisfactory, and the usage proved must be sufficient, for proof of a divided usage will not sustain a judgment." ^ The usage must be " such as to bind both parties to the contract," that is, it must either be actually within the knowledge of both parties, or such that the law will presume knowledge on the part of both.* Proof of usage may be of importance in questions regarding ready -money sales. Thus, where a buyer was sued for the price of sheep and cattle bought at a public market and taken away by him, he was allowed proof of usage in order to establish a presumption in support of his averment of payment on delivery.* A distinction is to be taken between usage which requires to be proved as a matter of fact, and usage which has been judicially recognised and may be acted upon by the Courts without proof " "Where a trade," says Lord ' Per Lord GifFord in Strong v. TUlifs a-nd Co. (1878), 5 Ret. 770. See also Sheriff v. Stein's Assignees (1828), 4 Mur. 454 ; Stein's Assignees v. SJierif (1828), 7 Sh. 47. 2 Per Lord Gifford in Broiim v. M'Connell (1876), 3 Ret. 788. ' Per Lord ArdmlUan in Armstrong and Co. v. M'Gregor and Co. (1875), 2 Ret. 339 at p. 343. •" See elaborate judgment in Jtobinsonv. Mollet (1875), L.R. 7 H.L. 802. Also Kirchner t. Kcnus (1859), 12 Moo. P.O. 361. "The result of the authorities, both Scotch and English, is that where a custom is purely local, it cannot be taken to control or explain the words of a written instrument, unless it was known to both parties." — Per Lord President Inglis in Holman V. Peruvian Nitrate Co. (1878), 5 Ret. 657 at p. 671. As to the general effect of usage see further, Lomhe v. Scott (1779), Mor. 5627 ; M'Eaahern v. Emng and Go. (1824), 2 Sh. 724 ; Wear and CoUey v. Davidsons (1873), Sh. Ct. Aberdeen, Guthrie's SeL Cas. 1st ser. 513 ; Marston v. Kerr's Trustee (1879), 6 Ret. 898. = Stewart v. Gordon (1831), 9 Sh. 466. See also Arnot v. Watt (1825), 4 Sh. 4. But the plea was not allowed where the buyer first denied delivery, and (after delivery was proved) pleaded the iisage of public market — Kidd v. Brown (1828), 6 Sh. 825. SUPPLEMENTARY. 261 Blackburn, " has been long established, its customs become Sect. 55. known to the law, and are judicially taken notice of as a matter of law." ^ 56. Where, by this Act, any reference is made to Sect. 56. a reasonable time ^"^ the question what is a reasonable Reasonable ■■■ TIME A time is a question of fact. question of Note. (a) " JReasonahle time." The words are used in Sects. 11 (2), 18, Eule 4 (&), 29 (2), 35, 37, and 48 (3). Commentary. In England, the ascertainment of questions of fact by Ascertainment means of a jury is much more general than in Scotland,^ ?^ ^*°* ^y and the provision of this section is intended to set at rest, so far as regards this Act, certain questions whith have arisen in English law. Taylor, in his work on JEvidence, says : " The line between law and fact has been very indistinctly drawn in a Relation of certain class of cases, and in these cases, therefore, the respec- j^^ngiand tive duties of the judge and jury are not yet clearly defined. Eor instance, if the question be whether a certain party had ^ Blackburn on Sale, p. 80. See Brandao v. Barnett (1846), 12 CI. & Fin. 787. As to proof generally, see Athya and Co. v. Eowell and Co. (1856), 18 D. 1299 (period of credit), Towill and Co. v. The British Agricultural Asso- ciation (1875), 3 Ret. 117 ("cash in 14 days as usual"), also Dickson on Evidence (2nd ed.) Sects. 196, 197, (Grierson's ed.) Sects. 1060, 1061. ^ In Scotland, prior to the institution of the Court of Session in 1532, facts in civil as well as in criminal cases were often proved before an assize or jury, but between 1532 and 1815, jury trial was almost entirely confined to crimes. In the latter year a special Jury Court for the ascertainment of facts in civil oases was created by statute (55 George III. c. 42) and continued till 1830, when it was merged in the Court of Session (1 William IV. 0. 69). The cases to be tried by jury were at first left entirely to the discretion of the Court (55 George III. c. 42, Sects. 1, 2), and although by subsequent statutes {e.g. 59 George III. c. 35), certain causes were enumerated, as appropriate to jury trial, the system of trial by jury in civil cases never took firm hold. In 1866, the growing disinclination to jury trial led to power being given to the Lord Ordinary to take proof of facts before himself "if both parties consent thereto, or if special cause be shown" (29 & 30 Vict. c. 112). " Since 1868, however, a more economical and expeditious mode of conducting jury trials has led to a certain reaction in their favour." See Mackay's Manual of Practice, p. 326, and remarks of Lord Justice-Clerk Hope in M'Celland v. Rodger and Co. (1842), 4 D. 646 at p. 651. 262 SALE OF GOODS ACT 1893. Sect. 56. Eflfeot of section. probable cause for doing an act, or whether he has done an act within a reasonable time, or with due diligence, it is difficult to say whether the definition of what constitutes probable cause, reasonable time, or due diligence, be for the judge or the jury, and specious arguments will not be wanting in favour of the claims of either party. On the one hand, it may be said that these terms are as capable of judicial interpretation as the words conversion, or asporta- tion, which must, clearly, be explained by the judge ; while, on the other hand, it may be urged that they seem rather addressed to the practical experience of practical men, than to the legal knowledge of the mere lawyer; that, being terms of degree, their meaning is subject to indefinite fluctuation according to the varying circumstances of each particular case, and that, consequently, they defy all attempts to compress them within exact a priori definitions. In truth, they are neither matters of fact nor matters of law exclusively, but are rather matters of quality or opinion, which, for want' of a more appropriate name, have been generally termed ' mixed cases.' " ^ The effect of the section is that questions arising under the Act as to what is a reasonable time should be submitted to a jury, where the general facts of the case are proved in this way. Sect. 57. Rights etc. enforoeable by action. 57. Where any right, duty, or liability is declared by this Act, it may, unless otherwise by this Act pro- vided, be enforced by action.^"^ Note. (a) " ' Action | includes in Scotland, condescendence and claim and compensation" [Sect. 62 (1)]. Commentary. In Scotland, it is scarcely necessary to declare that rights connected with sale are enforceable by action. In ^ Taylor on Evidence, 6th ed., vol. i. pp. 38, 39. S UPPLEMENTAR Y. 263 this respect the law differs to some extent from that of Sect. 57. England, where by a rule of the common law, when a In England statute provides no express penalty for contravention, such aSion°not contravention is punishable as a misdemeanour.^ In Scot- always recog- land, no such nile obtains. On the contrary, where in the ^gg j^° course of criminal proceedings it appears that the case Scotland. raises a mere question of civil right, it should either be dismissed, or sisted to allow of the fact being clearly ascertained.^ A civil remedy should be available for the redress of every civil wrong,^ and accordingly, in Scotland, " there is hardly any combination of circumstances, and no involution of conflicting claims either of right or of status, which may not be explicated in the Court of Session by means of an action founded on the special circumstances of the particular case, and concluding for the proper legal remedy or redress." * 58. In the case of a sale by auction — Sect. 58. (1.) Where goods are put up for sale by auction in auction lots, each lot is prima facie deemed to be the subject of a separate contract of sale : ^"^ (2.) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer,^^ or in other customary manner. Until such announcement is made any bidder may retract his bid: (3.) Where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to ^ Stephen's Digest of CrvmituiX Law, 3rd ed., p. 87. ^.Macdonald on Criminal Law, 3rd ed., p. 526. ' " It would import us little that rights belonged to xis, or that persons stood obliged to us, if there were no method by which we might make those rights effectual and attain the enjoyment of our property, or compel those who stand bound to us to perform their obligations." — Ersk. iv. 1. 1. ^ 'QeW's Law Did., voce "Action." 264 SALE OF GOODS ACT 1893. Sect. 58. employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person : Any sale contravening this rule may be treated as fraudulent by the buyer : ^"^ (4.) A sale by auction may be notified to be subject to a reserved or upset price/'*' and a right to bid ^'' may also be reserved expressly by or on .behalf of the seller.^"' "Where a right to bid ^"^ is expressly reserved, but not otherwise, the seller, or any one person ^^ on his behalf, may bid at the auction. Notes. (ffi) " Contract of sale." Defined Sects. 1 and 62 (1). As to each lot being the subject of a separate contract, see Couston, Thomson, and Co. v. Chapman ''^ (1872); Emmerson v. Heelis'^ (1809). (h) " Fall of the hammer." See Com. infra. (c) Not lawful for seller to hid. See Com. infra, p. 265. {6) " Upset price." The words " or upset " were inserted in the bill on a suggestion from Scotland. (e) "Plight to bid." This has nothing to do with "reserved price." If the right to bid is reserved, the seller or his repre- sentative may bid as often as he pleases. (/) " Ani/ one person." See Com. infra, p. 265. Law of Scot- land modified. Eetracting bid. Commentary. The law, or at least the practice, of Scotland is altered by this section in two particulars — 1. It is provided [Sub-sect. (2)] that until the fall of the hammer, any bidder may retract his bid. This is con- sistent with the English principle that an offer may be withdrawn at any time before acceptance, even where the offerer specially agrees to keep it open for a specified time, it being held that there is no '' consideration " for the 1 10 Macp. H.L. 74. ^ 2 Taunt 38. 5 UPPLEMENTAR Y. 265 engagement to continue the offer till the expiry of the time Sect. 58. mentioned.^ In Scotland, effect is not given to the doctrine of " Consideration," ^ and therefore the offer is held to subsist in terms of the arrangement, provided the offerer " continues alive and capable of consent at the time of acceptance."^ In regard to auction sales, the rule in Scotland has been in conformity with an interpretation of the Eoman law which is thus expressed by Moyle : " If the intention is that the highest bidder is to have the goods without reference to the relation between the amount of his bid and their real value, then the vendor is the proposer, and the contract is con- cluded by the making of the last bid, each bid being an acceptance conditional on no higher bid being made. . . . The best authorities on the Civil Law . . . seem to be in favour of the view that, in the absence of evidence of a contrary intention, each bid or offer is to be deemed to be withdrawn or to lapse as soon as a higher bid is made, so that the vendor can accept no bid except the highest. ... It also seems to be very generally held that, even where a bid is a mere offer and not a conditional acceptance, it cannot be retracted, and this is explained by assuming a tacit 'pactum de emendo,' or an impUed undertaking that it shall not be withdrawn." * 2. The right of a seller to bid by himself or by any one Right of seller person on his behalf, provided such right is expressly *°^''^' reserved, is a novelty in the law of Scotland.^ The distinction, however, need not be put on higher ground than that of practice, for if sufficient intimation be made of the intention of the seller to bid by himself or by another, 1 Cooke V. Oxley {1790), 3 T.R. 653; DicMmon v. Dodds (1876), 2 Ch. D. 463. ^ Law V. Hwtnphrey (1874), 3 Ret. 1192. 3 Bell's Com. i. 344 ; Bell on Sale, pp. 33, 38. See as to the English doctrine of "Consideration," Appendix 111. post, p. 841. * Moyle's Sale in the Civil Law, pp. 167-169. The English rule was affirmed in Payiwv. Came (1789), 3 T.R. 148 and Warlow v. Harrison (1858), 1 E. & E. 295. ^ It was held in a Sheriff Oourt case, that the seller may bid if he merely holds the goods in security and has not the radical right — Hendry v. Newton, Bennie, and Go. (1874), Sh. Ct. Airdrie, Guthrie's Set Oas. 1st ser. 529. It is submitted, however, that there is no good reason for this distinction. The rule undoubtedly applies to trustees and other fiduciaries, and, a fortiori, it should apply to a seller having a direct personal interest. 266 SALE OF GOODS ACT 1893. Sect. 58. there is no reason why the Court should reduce the sale as Opposed to fraudulent. But such intimation is so opposed to Scottish Scottish usage. ^^^^^ ^.j^^^. f^^ bidders would be likely to offer, and in the form here suggested, it is quite unknown in Scotland. The object aimed at is usually attained by fixing an upset price. It is not likely that even the express statutory sanction given by this section to a bid by the seller or by one person on his behalf, will render such procedure general in Scot- land. There is no provision in the Act for the identifica- tion of the seller or of the person empowered to bid on his behalf, and strangers are not likely to offer without knowing distinctly by whom the reserved power is to be exercised. If the competition lies between a honA-fide offerer, and a person who is known to be empowered to exercise the reserved bid, the purpose would seem to be at least as well served by the Scottish practice of an upset price. In any event, the Court will, no doubt, take care that the reserved bid is not sanctioned without ample proof that the intention to exercise it is clearly made known to all intending offerers. The rules of the law of Scotland as to the illegality of any unfair means to enhance the price are well established, and are at least quite as strict as the English rules, even in their recent sterner developments.^ Sect. 59. 59. In Scotland vfhere a buyer ^"^ has elected to accept ^'^ goods which he might have rejected,^"^ and to ^ In England, a, different rule seems to have prevailed in equity and at common law. Formerly, in equity, the seller might employ one person to bid without expressly intimating his intention to do so. So far as sales of land were concerned, this was altered by the Sale of Land by Auction Act 1867 (30 & 31 Viet. c. 48), which made puffers illegal, alike in Courts of law and of equity, except under conditions akin to those of the present section. It is practically the rule of the Act referred to, which is now extended to the sale of goods. As to the law of Scotland, see M. P. Brown on Sale, p. 578 et seq. ; More's Stair, p. 91, notes ; Ivory's Erskine, j). 639, note ; Bell's Prin., Sects. 130-132, and the following cases— ffrcj/ v. Stewart (1753), Mor. 9560 ; Murray v. Macwhan (1783), Mor. 956 ; Cree v. Durie (1st December 1810), E.G. ; Anderson v. Stewart (16th December 1814), E.G. ; Faulds v. Corbet (1859), 21 D. 587 ; Shiell v. Guthrie's Trustees (1874), 1 Ret. 1083 ; Strachan V. Auld (1884), 11 Ret. 756. As to intimation of the conditions of sale and its effect upon the bidders, see Hain v. Laing (1853), 15 D. 667 ; Christie v. Hunter (1880), 7 Ret. 729 ; Macdonald and Fraser v. Henderson (1882), 10 Ret. 95 ; Whiie and Co. Ltd. v. Dougherty (1891), 18 Ret. 972. SUPPLEMENTARY. 267 treat a breach of contract as only giving rise to a ^^°*' ^°- •■(•11 Payment into claim for damages/' he may, m an action ^*^ by the court in seller^"^ for the price/''^^ be required, in the discretion when bebaoh ,,,„ 1-11 • 1 1j,0^ WAEBANTT of the court^'^ before which the action depends, to is alleged. consign or pay into court the price of the goods, or part thereof, or to give other reasonable security for the due payment thereof ^''^ Notes. (a) "Buyer"— "seller." Defined Sect. 62 (1). (6) " Elected to accept.'' Formerly the buyer in Scotland had no right of election. His claim for damages in respect of the seller's breach depended on his having timeously rejected the goods and repudiated the contract. Now, he has the alter- native remedies of rejection or damages. See Com., Sect. II ante, p. 52. (c) " Might have rejected." The buyer's right of rejection is expressly reserved by Sect. 11 (2), but the rejection must be timeous. See also Sect. 53 (5). {d) " Claiin. for damages." The buyer has now the option of retaining the goods and treating the seller's failure " as a breach which may give rise to a claim for compensation or damages " [Sect. 11 (2)]. (e) " ' Action ' includes in Scotland condescendence and claim and compensation" [Sect. 62 (1)]. Formerly the price might be sued for in Scotland whether the property had passed or not. See Com., Sect. 49 ante, p. 235, and compare Sects. 49, 50, 57, and 61 (2). (/) "Price." See Sects. 8 and 9 ante, pp. 35, 41. \g) " Court." No definition is given or required. The common law jurisdiction in actions of sale is maintained. See Sect. 61 (2). (A) Discretion of Court, in Scotland, to order consignation. See Com. infra. Commentary. The provision of this section is intended to guard against the abuse of the alternative remedy given to the buyer by Sect. 11 (2). It may be said that according to the law of Power of Scotland (differing from that of England) it was always Scotland before within the discretion of the Court to order consignation, the Act. 268 SALE OF GOODS ACT 1893. Sect. 59. " The English Courts will not- order money to be brought into Court upon anything short of a distinct admission of the party that the money is owing from him,^ and the reason of the rule is very obvious, for, were it otherwise, the Court might have to hear the whole cause twice over, upon the motion for bringing in the money, and, again, upon the final hearing. ... No such rule is propounded in Scotland. If the Court is satisfied, quovis modo, that a sum will ulti- mately be payable, it makes the order which it judges will best secure the fund for the party to whom it is payable." ^ The common-law right of the Scottish Courts to call for consignation was, however, by no means clear, and it was sometimes practically negatived. Thus in Findlay v. Donaldson^ (1846) the Court of Session ordered consigna- tion, but the House of Lords reversed, holding that " there was not a sufficient medium concludendi whereupon they might have proceeded in the exercise of their discretion." * In this case. Lord Campbell said : " It is a rule, and a very salutary rule in the Courts of England, that they will not order money to be paid into Court unless there be a clear admission of the money being in the hands of the party. . . . But, though such is the law and practice of England, we do not by any means say that that law and that practice shall be adopted in Scotland, though we have great reason to regret that no rule of the kind does prevail there, and that it is a mere matter of discretion in each particular case." ^ The Courts in Scotland have hitherto, rarely, if ever, called for consignation in ordinary actions for the price of goods supplied. The express power here given is therefore a suggestion for guidance, as well as a warrant for procedure. Sect. 60. 60. The enactments mentioned in the schedule to Repeal. ^j^jg ^^^ ^^^ hereby repealed as from the commence- 1 Richardson v. Bank of England (1838), 4 Myl. & Cr. 165. ' Per Lord Brougham {phiter) in Findlay v. Doruildson (1846), 5 Bell's App. 105 at p. 118. 3 5 Bell's App. 105. * Per Lord Brougham, 5 Bell's App. at p. 121. 5 Bell's App. at p. 124. ^ UPPLEMENTAR V. 269 ment of this Act^"^ to the extent in that schedule Sect. 60. mentioned/'^ Provided that such repeal shall not affect anything done or suffered, or any right, title, or interest acquired or accrued before the commencement of this Act, or any legal proceeding or remedy in respect of any such thing, right, title, or interest/"^ Notes. (a) Commencement of Act. The Act came into operation on 1st January 1894 (Sect. 63), although it did not receive the royal assent till 20th February 1894. It is therefore retrospec- tive in its operation. See Note, Sect. 6Z post, p. 289. (&) The schedule repeals Sects. 15 and 16 (commonly cited as Sects. 16 and 17) of the English Statute of Frauds, but does not repeal the corresponding section of the Irish Statute of Frauds.^ Nothing in the Act is to affect any enactment relat- ing to the sale of goods which is not expressly repealed [Sect. 61 (3)]. The omission to repeal the Irish Statute seems an over- sight. (c) Compare this proviso with Sect. 38 of the Interpretation Act 1889.2 61. — (1.) The rules in bankruptcy ^"^ relating to Sect. 61. contracts of sale shall continue to apply thereto, not- Savings. withstanding anything in this Act contained. (2.) The rules of the common law,^*^ including the law merchant,^"^ save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent ^"^ and the effect of fraud, misrepresenta- tion,^'^ duress or coercion,^-'^^ mistake, or other invali- 1 7 William III. c. 12, Sect. 13 (Irish Statutes). 2 52 & 53 Yict. c. 63. 270 SALE OF GOODS ACT 1893. Sect. 61. dating cause/^^ shall continue to apply to contracts for the sale of goods. (3.) Nothing in this Act or in any repeal effected thereby shall affect the enactments relating to bills of sale/''^ or any enactment relating to the sale of goods which is not expressly repealed by this Act.® (4.) The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security.^''^ (5.) Nothing in this Act shall prejudice or affect the landlord's right of hypothec or sequestration for rent in Scotland. ^*^' Notes. (a) " Rules in bankruptcy." Among the rules in bankruptcy saved by this sub-section, is the statutory reputed ownership provided by Sect. 44 of the English Bankruptcy Act of 1883.^ See Com., Sect. 17 ante, p. 83. In Scotland, reductions at com- mon law or under the Acts 1621,^ 1696,^ or 1856* are preserved. This and the two following sub-sections are framed on the model, and for the most part in the language, of Sect. 97 of the Bills of Exchange Act 1882.5 (b) " Rules of the common law." Where the common law of England and Scotland diifers, occasional complications may be expected, as in lalisher Distillery v. Hamlyn and Co.^ (1893), Affd. H. of L.7 (1894). (c) " Law merchant." " There is no part of the history of English law more obscure than that connected with the common maxim that the law merchant is part of the law of the land." ^ 1 46 & 47 Vict. c. 52. 2 ig21, c. 18. 3 1696, c. 5. ^ 19 & 20 Vict. c. 79. As examples of reductions aflfecting the sale of goods, see Wright v. Mitchell (1871), 9 Macp. 516 ; Gourlay v. Hodge (1875), 2 Ret. 738, and other cases in Appendix II. in. (6) and in. (7). 6 45 & 46 Vict. 0. 61. « 21 Ret. 204. ' 21 Ret. H.L. 21. In consequence of this judgment an Act was imme- diately afterwards passed to amend the Scottish Law of Arbitration (57 & 58 Vict. c. 13). ' Blackburn, p. 317. See sketch of the history of the law merchant in England, Blackbum, pp. 317 et seq., also Bell's Com., Preface, p. xi. A more SUPPLEMENTAR Y. 27 1 (i) Frincipal and agent." See generally on this subject in its Sect. 61. relation to the sale of goods, Bell's Com., 7th ed. i. 458-460 and editor's notes ; also Brydon v. Muir'^ (1869) ; Athya v. Buchanan and Son^ (1872) ; Stewart, Brown, and Co. v. Biggart and Fulton^ (1893). («) Fraud, misrepresentation, mistake. See Com. infra. (/) Duress or coercion. In Scotland called " force," with which " fear " is usually conjoined. See authorities noted below.* (g) " Other invalidating cause." Such as illegality or impossi- bility. See Sect. 11 (3). (h) "Bills of sale." See Com., Sect. 17 ante, p. 84. (i) Enactments not repealed. E.g. Sect. 1 3 of the Irish Statute of Frauds.^ See note (J), Sect. 60 ante, p. 269. Many Acts make special provision as to the sale of goods of a particular class or description, e.g. chain cables and anchors,^ food and drugs,^ explosives,* poisons,^ goods under a trade markj^" goods sold by weight or measure,ii and fertilisers and feeding stufFs.^^ {j) Mortgage, pledge, etc. See Com. infra, p. 276. (Jc) Landlord's hypothec in Scotland. This sub-section re-enacts Sect. 4 (now repealed) of the Scottish Mercantile Law Amend- ment Act 1856.^^* The original provision formed a qualification of the purchaser's right, under Sect. 1 (also now repealed) of the Mercantile Law Amendment Act, to demand delivery as against the seller's creditors. An ordinary creditor of the seller could not, under the Act, prevent delivery to the buyer upon payment of the price, but the right of a landlord in virtue of his hypothec was superior to that of the buyer. Similarly, under this Act, though the property in goods sold has passed to the buyer, his right must yield to that of the seller's landlord where hypothec exists. Commentary. Fraud. — Bell, following the civilians and Pothier, dis- Effect of fraud tinguishes between fraud quod causam dedit contractui, and "^XartV ■ sale. extended history hy Master Macdonell will be found in his introduction to the 10th ed. of Smith's Mercantile Laxo, p. Ixiii. et seq., and another by Mr. Thos. E. Scrutton in his Elements of Mercantile Law, pp. 1-39. ' 7 Macp. 536. 2 45 gg j^ jg 3 21 Eet. 293. ■> Stair, i. 9. 8 ; Ersk. iii. 1. 16, iv. 1. 26 ; Bell's Com. i. 314-315 ; Bell's Prin., Sect. 12 ; M. P. Brown, p. 395 et seq. See also Pollock on Ooniract, 6th ed. p. 576 et seq. ^ 7 William III. c. 12 (Irish Statutes). « 34 & 35 Vict. c. 101, Sect. 7 ; 37 & 38 Vict. c. 51. ' 38 & 39 Vict. c. 63 ; 42 & 43 Vict. c. 30. » 33 yict. c. 17. « 31 & 32 Vict. c. 121, Sect. 17 ; 32 & 33 Vict. c. 117, Sect. 3. >» 50 & 51 Vict. 0. 28. " 41 & 42 Vict. c. 49. 12 56 & 57 Vict. c. 55. " 19 & 20 Vict. c. 60. 272 SALE OF GOODS ACT 1893. Sect. 61. fraud quod tantum in contraetum incidit. " Fraud," he says, " of the former kind annuls the contract ; fraud of the latter species gives only an action for restitution or damages." ^ But the contract, even though induced by fraud, is not ipso jure void. It is only voidable ab initio at the instance of the person defrauded.^ Doltis dans causam contractui is what English writers call material fraud, and it is only material fraud which gives a remedy.^ Where the fraud is material, the defrauded person may avoid the contract provided he can give restitutio in integrum, or he may, in his option, claim damages, even though matters are not entire.* The idea of " legal fraud " or " fraud at law," as some- thing intermediate between bona fides and mala fides has been clearly negatived. " I do not understand legal fraud," said Lord Bramwell, L. J. " To my mind it has no more meaning than legal heat or legal cold, legal light or legal shade. There never can be a well-founded complaint of legal fraud or of anything else, except where some duty is shewn and correlative right, and some violation of that duty and right." ^ " Fraud," said Lord Herschell, " is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. . . . The third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false state- 1 Bell's Com. i. 262 ; Bell's Pnn., Sect. 13. See also Potliier, Oilig., TSo. 31. ^ " It is a settled rule that a contract obtained by fraud is not void, but that the party defrauded has a right to avoid it, if he does so while matters can be replaced in their former position." — Per Lord Campbell, L. C, in Se Itoyal British Bank (Mixer's Case) (1859), 4 De G. & Jfo. 575 at p. 586, quoted and adopted by Lord Chelmsford, L. C. , in Western Bank of Scotland V. Addie (1867), 5 Macp. H.L. 80 at p. 84. See also Houldsworth v. Ciiy of Glasgow Bank (1880), 7 Eet. H.L. 53. ' Leake on Coniract, 3rd ed. p. 313. * Stair, i. 9. 14, iv. 35. 19 ; Ersk. iii. 1. 14-16, iv. 1. 27 ; Bankton, i. 10. 64-65 ; M. P. Brown, p. 404 et seq. See Gourlay, etc. v. Watt (1870), 9 Macp. 107. 5 In Weir v. Bell (1878), 3 Ex. Div. 238 at p. 243. The above passage was referred to and approved by Lord Herschell in Berry v Peek (1889), 14 App. Cas. 337 at p. 372. 5 UPPLEMENTA RY. 273 ment being fraudulent, there must always be an honest belief Sect. 61. in its truth. ... If fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made." ^ Where an owner of goods entrusts them to another who Goods fraudu- fraudulently sells them, it will depend upon the nature of p^B^sra not the the trust whether the property in the goods passes to a true owner. iond-fide buyer. "There must have been on the part of the original owner a consent to sell — not merely to yield up possession on some causa not capable, even when followed by delivery, of passing the property.^ In Scotland, mere acceptance of goods by an insolvent Old Scottish was at one time deemed constructive fraud, entitling the °°*'''°®- seller to reduce the contract and annul the effect of delivery.^ This was varied in 1736 by the Court fixing three days prior to actual stoppage as a period during which there was a legal presumption of fraud.* The rule intra triduum was, in turn, abolished by a House of Lords decision in 1790,^ and, in its place, stoppage in transitu was Introduction introduced into Scotland. It was established by the last- infransUu. mentioned case that mere insolvency, apart from other circumstances, does not prevent a man from carrying on business and endeavouring to retrieve his losses, and that the acceptance of goods within a certain period of stoppage affords no special presumption of fraud, though it may be an element in the general proofs ^ In Derry v. Peek (1889), 14 App. Cas. 337 at p. 374. According to Sir Frederick Pollock, the case of Derry v. Peeic decides that " there is no general duty to use any degree whatever of diligence in ascertaining facts as distinct from bare belief, in making positive statements intended for other people to act on" — Contract, 6th ed. p. 504, note. Sir Frederick elsewhere speaks of the Directors' Liability Act 1890 (53 & 54 Vict. c. 64) as providing "a partial and clumsy remedy for the mischievous consequences of Derry v. Peek " — Contract, 6th ed. p. 533, note. 2 Bell's Com. 7th ed. i. 261, Lord M'Laren's note. ' See Prince v. Pallat (1680), Mor. 4932, and other cases in Appendix II. ir. (10) and in. (7) post, pp. 319, 328. * Inglis v. Royal Bamk (1736), Mor. 4937. " Jaffrey, etc. v. Allam., Stewart, amd Co. (1790), 3 Pat. App. 191. ' See Bell's Com. i. 265, and oases in Appendix II. 11. (10) and iii. (7) post, pp. 319, 328. Oamvphell and Co. v. Shepherd (1776), 2 Pat. App. 399, was a case of sale set aside on the ground of fraud by an insolvent. See Lord Mansfield's remarks, 2 Pat. App. at p. 462. As to whether it was necessary T 274 SALE OF GOODS ACT 1893. Sect. 61. Effect of fraud in Scotland. Misrepresenta- tion and ■ mistake — Divergent rules of law and equity in England. Under the former law of Scotland the buyer had no claim for damages if he retained goods which he was entitled to reject. Where, however, the contract was fraudulent, the current of authority was to the effect that he might, if he pleased, retain the goods and yet claim damages.^ " Misrejpresentation and mistake." — The law in England on this subject is involved with questions of law and equity, under rules which do not appear to run on the same lines. The doctrine of " Consideration,'' which does not apply to Scot- land, also enters largely into the question whether the mis- representation is of such a character as to justify rescission of the contract. " At law," said Lord Blackburn, " where there has been an innocent misrepresentation or misappre- hension, it does not authorise a rescission, unless it is such as to show that there is a complete difference in substance between what was supposed to be, and what was, taken, so as to constitute a failure of consideration. . . . The diffi- culty in every case is to determine whether the mistake or misapprehension is as to the substance of the whole con- sideration, going, as it were, to the root of the matter, or only to some point, even though a material point, an error as to which does not affect the substance of the whole considera- tion."^ It would seem that at law, even a material mis- representation did not justify repudiation, but that in equity, the contract might be rescinded, even in the absence of such deceit or fraud as would found an action of damages against the wrongdoer. " When rescission is claimed, it is only necessary to prove that there was misrepresentation ; then, however honestly it may have been made, however free from blame the person who made it, the contract having been obtained by misrepresentation cannot stand." ^ to establish fraud at the date of the contract, or merely at the date of delivery, see Inglis v. Moyal Sank (1736), Mor. 4937 ; Watt v. Findlay (1846), 8 D. 529. As to the effect of fraud on the part of a clerk of the seller in making out false returns of the value of a business without the seller's knowledge, and without pecuniary advantage to himself, see Mdinlmrgh United Breweries, Ltd. V. Nicholson's Trustee (1893), 20 Ret. 581 ; Affd. (1894), 21 Ret. H.L. 10. ^ See Com., Sect. 11 ante, p. 55. 2 In Kennedy v. Fanama Mail Co. (1867), L.R. 2 Q.B. 580 at p. 587. See as to " Consideration " Appendix III. post, p. 341. ' Per Lord Herschell in Derry v. Peek (1889), 14 App. Ca. 337 at p. 359. See also Lord Bramwell to the same effect at p. 347. SUPPLEMENTAR Y. 275 In Scotland, misrepresentation and mistake are included Sect. 61. in the phrase " error in essentialibus." In Stewart v. Kennedy ^ Analogous (1889-90) it was strongly urged on the authority of a \Zal^^tin passage in Bell's Principles, that it was sufficient for reduc- essentialibus. tion that the contract was founded on " error in substantial whether in fact or in law, provided reliance was placed on the thing mistaken ; " ^ but, in the Court of Session, Lord Dicta in President Inglis pointed out that " if this plea were listened ^nZdy.' to, every litigant who is unsuccessful in a question as to the construction and effect ... of a contract, would at once have the remedy of reducing the contract which he had deliberately made and afterwards persistently miscon- strued." ^ In the House of Lords, Lord Herschell quoted these words with approval,* and said in regard to the passage from BeU, that the fact that " no case can be pointed to in which the Courts have given relief upon the ground under consideration," satisfied him that it could not he the law of Scotland.^ Lord Watson put the matter thus : " In the case of onerous contracts reduced to writing, the erroneous belief of one of the contracting parties in regard to the nature of the obhgations which he has under- taken will not be sufficient to give him the right [to rescind], unless such belief has been induced by the repre- sentations, fraudulent or not, of the other party to the contract."^ Again, in Menzies v. Menzies'' (1893), Lord Menziesv. Watson said in regard to error, that it " becomes essential whenever it is shown that, but for it, one of the parties would have declined to contract. He cannot rescind unless his error was induced by the representations of the other contracting party or of his agent, made in the course of negotiation, and with reference to the subject matter of the contract. If his error is proved to have been so induced, the fact that the misleading representations were made in good faith, affords no defence against the remedy of rescission." ^ ' C. of S. 16 Eet. 857 ; Attd. 17 Ret. H.L. 25. 2 Bell's Prin., Sect. 11. ^ 16 Ret. at. p. 865. ' 17 Ret. H.L. at p. 27 ^ Ibid. " 17 Ret. H.L. at p. 29. ' 20 Ret. H.L. 108. 8 20 Eet. H.L. at p. 142. See also Woods v. Tulloeh (1893), 20 Ret. 477, 276 SALE OF GOODS ACT 1893. Sect. 61. Sale or security. Law of Scotland un- settled by M'Bain v. Wallace, Sub-section (4), excluding mortgage, pledge, etc., from the operation of the Act, opens up the question of the rela- tion between sale and security. In Scotland, the law on this subject has been unsettled in recent years by the House of Lords judgment in MBain y. Wallace^ {1B81). Previously to that case, it was scarcely disputed' that no security over moveables was effectual without possession. The security might belong to one or other of two different categories. It might be an ex -facie absolute transfer of proprietory right, as in Hamilton v. Western Banh'^ (1856), in which case it would, on the principle of retention, carry future advances as well as those present and past ; or, it might be an ordinary security for a present advance or for a specific existing debt. But in either case, a complete transfer by actual or constructive delivery to the security holder, was essential.* The special relaxation where Lord Kyllachy (Ordinary) said : "The error alleged was as to certain qualities of the subject which it is impossible to assert were either expressly or tacitly essential to the bargain " (p. 479). In Edinburgh United Breweries, Ltd. V. Nicholson's Trustee (1893), 20 Ret. 581 ; Affd. (1894), 21 Bet. H.L. 10, misrepresentation was alleged and founded on, but the question ultimately turned upon the pursuers' title to sue. ^ 8 Ret. 360, A£F. 8 Ret. H.L. 106. ^ 19 D. 152. "So far as I am aware, the practice of making advances on the security of a conveyance ex facie absolute qualiiied by a back letter, is not known in England, although well known in Scotland, and attended, accord- ing to the law of Scotland, with certain well-known consequences. On the other hand, the practice of taking an ordinary security title for future advances, as is done in England, cannot effectually he done in Scotland at all." ^Per Lord Trayner in National Bank v. Union Bank (1885), 13 Ret. at p. 407. See also opinion of Lord President Inglis (13 Ret. at p. 409), which was afterwards characterised by Lord Halsbury, L. C, in the appeal as "an interesting historical retrospect" (14 Ret. H.L. at p. 1). The doctrine of Hamilton v. Western Bank was much discussed in Alston's Trustees v. Boyal Bank (1893), 20 Ret. 887, and was referred to in the recent case of Henderson and Co. v. Stewart and Others (1894), 32 S.L.R. 120. A valuable risumi and criticism of cases affecting retention for debts subsequently contracted, will be found in Professor More's Lectures, vol. i. 405, 410. ' Heritable Securities Investment Association v. Wingaie's Trustee (1880), 7 Ret. 1094. See also Cowan v. Spence (ISli), 3 Sh. 28 (KE. 42); Wight V. Forman (1828), 7 Sh. 177. " The law of Scotland does not recognise such a security as this, and no stipulation or contract between the parties can create such a security in competition with the rights of creditors. . . . The written contract here is a mere device, by means of which it is sought to hide the real nature of the contract, and to change its name without altering its nature." — Per Lord Gifford in Cropper v. Donaldson (1880), 7 Ret. 1108 at p. 1114. This, however, was a case of hire-purchase, where the price was secured by means of a condition suspending the passing of the property, and, in sub- sequent cases such circumstances were held to amount to actual sale, and not merely to security, e.g. Murdoch and Co. Ltd. v. Cfreig (1889), 16 Ret. 396. See Com., Sect. 17 ante, p. 83. SUPPLEMENTARY. 277 in favour of sale, introduced by the Scottish Mercantile Law Sect. &1. Amendment Act of 1856,^ was not supposed to apply to a Effect of transaction which, though in the form of a sale, was really l^w Amrad- a security. Hence, in M' Bain's Case which related to the ment Act. transfer of a ship on the stocks in virtue of agreements which, taken together, amounted to a security, the attention of the Court of Session was exclusively directed to the question of constructive delivery. On the authority of the old case of Simpson v. DuTicanson's Creditors'^ (1786) the Simpson v. Court found itself in a position to sustain the transaction oSws!"'* as one in which the property had passed by means of the only delivery of which the subject was capable. The Mercantile Law Amendment Act was never once referred to, either in argument or in the opinions of the judges. But, Reasoning of in the House of Lords, it was all the other way. The case ^ouse of ' •' Lords m which had held undisputed sway in Scotland for a century M'Bain's was doubted, and the judgment of the House was founded ^"*^' entirely upon the Mercantile Law Amendment Act. The difficulty as between sale and security was got over by sup- posing the security to be something collateral to the sale, much in the same way as an English warranty is collateral to the contract while not forming part of it. Lord Selborne Lord Selbome. said : " The statute does not say that, there being a sale, that is to be taken out of the operation of the statute, because the parties may have some further contract, or agreement, or understanding inter se, with regard to the subject of the sale."^ Lord Blackburn doubted if the LordBiaok- alleged security had ever been reduced to a contract, or '^™' amounted to more than a moral obligation qualifying the absolute character of the sale, but, he said, " Supposing there was a completed collateral contract, ... a binding, legal, and enforceable contract that this should be a security, I do not see the slightest ground for saying that that undoes the effect of the Mercantile Law Amendment Act." * These dicta cannot have been intended to throw doubt Contradictory on the well-established rule of Scots law that possession is Housrof ^"^ Lords in sub- 1 19 & 20 Vict. 0. 60, Sects. 1 to 5. sequent case. 2 Mor. 14204. See ante, p. 96. 2 8 Ret. H.L. at p. 109. ^ 8 Ret. H.L. at p. 114. 278 SALE OF GOODS ACT 1893. Sect. 61, In M' Bain's Case the substance of the transaction not regarded. Subsequent Scottish judgmentf. Allan's Trustee v. Ghmn. necessary to the constitution of real contracts such as pledge or security. On the contrary, a few years later in a similar appeal from Scotland, Lord Blackburn said : " I think the agreement ... is not an agreement for a sale at all, but an attempt to bargain for a pledge or security. A pledge or security without delivery of possession, is, I think, not good, and though in England a bill of sale under seal having that effect may be made, this is not a bill of sale." ^ The dis- turbing element in M'Bain's Case is that the grounds of judgment suggest that it is not necessary to look to the whole transaction to ascertain whether it is in its essence a security, and that it is sufficient if a form of a sale is adopted, and documents granted which would per se establish a sale if unqualified by " collateral agreements." ^ The application of the Mercantile Law Amendment Act to such circumstances, was, in effect, applying to a security a relaxa- tion of the law of possession, which was clearly intended to apply to sale alone. It is not surprising that this interpretation should have been adopted in Scotland. In Allan and Co.'s Trustee v. Cfunn and Co? (1883) the Court of Session held that the Mercan- tile Law Amendment Act applied to goods bearing to be sold for a certain sum, but under condition that they were to be returned to the seller upon repayment of the amount. The so-called seller in this case retained the goods in his own possession for ten months, and only gave dehvery after his sequestration.* Lord Eutherfurd Clark expressed doubt as to the judgment, and said : " I fear great danger to the law in cases where parties resort to apparent transactions of sale in order to obtain a security which is not tolerated by the law of Scotland. I do not think, however, after the case of M'Bain v Wallace that I can differ." ^ Again, in 1 In Seath and Co. v. Moore (1886), 13 Ret. H.L. 57 at p. 61. ^ "If a party should, under pretence of making a sale, in reality make a loan, it would merely be considered as a loan, although it were made with all the formalities of a sale." — Story on Sale, Sect. 223. 3 10 Ret. 997. ^ A similar instance of pactum de retrovendendo occurred in Latta v. Park and Co. (1865), 3 Macp. 508, but with the very important difference that the goods were delivered to the purchaser at the time of the agreement. 5 10 Ret. at p. 1000. 5 UPPLEMENTAR Y. 279 Wilstm's Trustee. Barling v. Wilson's Trustee'^ (1887) the case of M'Bdin v. Sect. 61 Wallace was cited as an authority in circumstances which Darling did not necessarily involve the Mercantile Law Amend- ment Act.^ The subject of sale was pipes which passed under a road. " Delivery of them,'' said Lord Young, " by digging them up, handing them to the purchasers, and then replacing them in the ground, would have been ridiculous," ^ and therefore the real ground of judgment was that the subject of contract was delivered, so far as from its nature it was capable of delivery. If the delivery was effectual, it was of no consequence whether the contract was one of sale or of security.* It was the ground of judgment in the Court of Session in M'Bain's Case, rather than that in the House of Lords, which formed the ratio decidendi, but it was the authority of the House of Lords which was cited in support. Lord Eutherfurd Clark said : " There is admittedly a judgment of the House of Lords against the reclaimer. That makes a simple ground of judgment. I was the Lord Ordinary in the case of M'Bain, and am bound now to confess that I was wrong in my judgment in it. While, however, I acknowledge my error, I do not perhaps see it so plainly as I should do." ^ In Liquidator of West Lothian Oil Go. v. Mair^ (1892) the question chiefly turned on whether delivery had been actually given. It was decided that the delivery was effectual, and therefore the judgment did not require to rest on special privilege arising from the transaction being in the form of a sale. But the Mercantile Law Amendment Act was founded on and sustained, as an alternative ground of judgment, and several of the judges were disposed to look upon the trans- action as a hond-fide sale, and not in any respect a security. Lord Young, who gave the leading opinion, while agreeing that the circumstances amounted to an out and out sale. West Lothian Oil Co. V. Mair. 1 15 Ret. 180. ^ The report bears no reference to the Mercantile Law Amendment Act, except in the rubric of the reporter. ^ 15 Ret. at p. 184. * "There is here no doubt as to what the contract was. The object was to give Wilson a certain sum on security of the pipes, and it was necessary, in order to do that, that there should be an out and out sale " {delivery ?) " of the pipes."— Per Lord Jus.-Clk. Monoreiff, 15 Ret. at p. 183. " 15 Ret. at p. 185. « 20 Ret. 64. 28o SALE OF GOODS ACT 1893. Sect. 61. combated the view that, even if it had been a security, the lender's preference was invalid. Eeferring to M'Bain's Case, Lord Young said : " That argument was urged, but it was the opinion of this Court and also of the House of Lords, that where there was a party who was willing to accommodate another by advances of money, and a party desiring to be so accommodated by receiving the advances, there was nothing to prevent them entering into the relation of buyer and seller between themselves by a contract of sale, and that without any inconvenience, notwithstanding what the parties meant. What they did mean was to create the relation of buyer and seller between the borrower and lender, the advances being, by that contract, the price of the goods which the lender paid, and the goods being, by that contract, transferred to him as the buyer. It was held that that was perfectly legitimate — that the views of the parties in entering into the contract . . . did not prejudice the validity and effect of what the parties did. ... To say that that is a loan transaction in the form of a sale, is language which may be criticised, but is good and convenient enough so long as it is quite understood. It is meant that the parties intended the relation of buyer and seller to be created by that contract of sale, although the seller did not mean to part with all connection with the goods, and the buyer had not the usiud intention of keeping them for his own use and enjoyment, or of selling them over again at a profit} In two recent cases relating to securities over household furniture, the Second Division gave opposite decisions upon Paitison's very similar facts. In Pattison's Trustee v. Liston^ (1893) the transaction was in the form of an absolute sale and assignation, but there was no sufficient legal delivery, and " it was clear beyond dispute that the transaction was one of loan on security." " We are dealing here," said Lord Trayner, " admittedly with a security and not a sale. Now it is quite certain that an effectual security over moveables can only be effected by delivery of the subject of the security. Nothing short of delivery will suffice. . . . The 1 20 Ret. 64 at pp. 68, 69. 2 20 Ret. 806. Trustee v. IMon, SUPPLEMENTAR Y. 28 1 mere statement that delivery has been given, or is hereby Sect. 61. given, is not delivery nor equivalent to delivery." ^ Lord Young dissented, and, consistently with his opinions in the cases already referred to, he founded his judgment entirely on M'Bain's Case, quoting at length the opinions of Lords Selborne, Blackburn, and Watson in support of the view that anything in the form of a sale sufficed to confer the privileges of the Mercantile Law Amendment Act, notwith- standing a collateral agreement that it was to be only a security. The other case referred to was that of LiddeU's UddeU's. Trustee v. Warr and Co.^ (1893), where Lord Young gave f^^^*^' the leading opinion in favour of the validity of the transac- tion, and was in this instance supported by his colleagues on the ground " that there was a true sale, and therefore that the case of M'Bain appUed." ^ It therefore becomes of importance to observe the facts which, in the opiuion of the Court, constituted " a true sale " in the sense of M'Bain's Case. These were as follows : — A party applied to money- lenders for a loan of £250, which they agreed to give under the following documents, (1) an absolute assignation of household furniture bearing to be granted in implement of a sale at the price of £250, (2) an agreement by which the lenders hired the furniture to the borrower for three years at a rent which, in the time specified, fully repaid the sum lent with interest, and (3) a back letter signed by both lenders and borrower setting forth that the borrower was to have the furniture re-assigned to him when the half- yearly instalments (called in the lease, rent) were fully paid to the lenders. It was not disputed that the lenders " never had at any time any physical possession of the furniture or of the key of the house." " The question is," said Lord Young, " whether, and how far, you can impugn a contract by showing, by writing or by parole, that the true purpose of the parties was a transaction of loan. My opinion is that if the parties are acting honestly, and are sui juris, and not infringing any rule of bankruptcy law, they are at 1 20 Eet, at p. 813. ^ 20 Ret. 989. 3 Per Lord Kutherfurd Clark, 20 Ket. at p. 995. 283 SALE OF GOODS ACT 1893. Sect. 61. Effect of present Act upon doctrine of M'Bain v. Wallace. Pledgee may re-transfer to true owner under contract of agency. liberty to enter into a contract of sale, though their purpose be to give security to one of them — a lender of money — which security can be given by that means, and cannot be given by pledge. ... It appears to me that it is lawful and in the interest of the community that it should be possible for the parties to carry out their desire by means of a sale. ... It is quite true that it is the general doctrine of Scots law that there cannot be a security over moveables retmda possessione. But the law is advancing, and the maxim that there can be no security over anything that is in the debtor's possession, has suffered considerably of late years. ... I do not think that the case of MBain marked any great advance in the law, but it was an advance in what I hold to be the right direction." ^ It remains to consider the effect of the present Act upon M'Bain v. Wallace, as interpreted by the foregoing cases. The sections of the Mercantile Law Amendment Act upon which that judgment was founded have been repealed, and in their place, we have now in Scotland the English rule of passing the property, which to a large extent effects the same object by giving the purchaser of specific goods a proprietory right in the subjects of sale. But this proprietory right which, so far as Scotland is concerned, is entirely due to the present statute, does not extend " to any transaction in the form of a contract of sale, which is intended to operate by way of mortgage, pledge, charge, or other security." It seems clear, therefore, that M'Bain's Case is no longer an authority, and that to render any security effectual, the subject must be completely delivered to the lender or pledgee. ' On the other hand, where goods are pledged and are delivered to the pledgee, either physically or by means of a document of title, it has been recently held by the House of Lords (overruling a judgment of the Second Division of the Court of Session) that there is nothing to prevent the pledgee re-transferring to the true owner under a distinct contract of agency for the purpose of sale. The Court of 1 20 Eet. at pp. 994, 995. SUPPLEMENTARY. 283 Session judgment proceeded on the ground that, while the Sect. 61- pledgee would not have lost constructive possession by merely handing the goods or transferring the document of title to a third party as his agent for sale, it was otherwise where the agent thus appointed happened to be the true owner of the goods. In the House of Lords it was held (1) that the contract of pledge was entered into in England, and fell to be decided by English law where the rule con- tended for in the Scottish Court had no place, and (2) that the theory ran counter to everyday commercial practice, and could not be maintained as a proposition in the law of Scotland.^ Interpre- tation OF TERMS. 62. — (1.) In this Act, unless the context or subject Sect. 62 matter otherwise requires, — ■ "Action" includes counterclaim and set off, and in Scotland condescendence and claim and com- pensation : " Condescendence and claim " is the title applied to a claim in an action of " multiplepoinding " ( = Eng. " in- terpleader "). " Compensation " is the Scottish term for " set-ofiF." ^ The word " action " chiefly occurs in Part V. of the Act — Sect. 49 et seq. "■ Bailee " in Scotland includes custodier : This general declaration was inserted in Committee, and was intended to supersede the necessity for repeating " custodier " along with " bailee." The word " custodier," however, has not been deleted throughout the body of the Act. See Sects. 18, 19, 20, 41, 43, 45, and 46. "Buyer" means a person who buys or agrees to buy goods : 1 NoHh- Western Bank, Ltd. \. Poynter, etc. (1894), 21 Eet. 513, Eevd. H.L. 32 S.L.E. 245. ^ Bell's Gem. ii. 119. 284 SALE OF GOODS ACT 1893. Sect. 62. " Contract of sale " includes an agreement to sell as well as a sale : See Com., Sect. 1 ante, p. 4. "Defendant" includes in Scotland defender, re- spondent, and claimant in a multiplepoinding : 7 " corresponds to an English " inter- pleader." " Delivery " means voluntary transfer of possession from one person to another : Compare definition in Bills of Exchange Act 1882,^ Sect. 2. The word ^'voluntary" is here added, and the words " actual or constructive," which, in the definition re- ferred to, are appended to "possession," are here omitted. " Actual " and " constructive " merely express different modes of possession, and are therefore superfluous. It is to be noted, however, that delivery itself may be either actual or constructive. Thus, it is constructive when there is a change of possession without any change of actual custody, 2 e.g. where goods are transferred while held by a third person [Sect. 29 (3)], or where there is symbolical delivery by transfer of a bill of lading or otherwise.* " Possession " is not defined in this Act, but a definition is attempted in the Factors Act 1^889,* Sect. 1 (2). Benjamin calls attention to the diff'erent mean- ings attached to " delivery," ^ but Chalmers suggests that it is "more correct to say that a delivery which is effectual for one purpose is ineifectual for other purposes. For instance, delivery to a carrier generally passes the property to the buyer, but does not defeat the right of stoppage in transitu, while delivery by the carrier to the consignee does defea* that right." ^ 1 45 & 46 Vict. 0. 61. ^ Pollock and Wright on Possession, p. 46, and p. 72 d seq. ^ As to "symbolical delivery," see Com., Sect. 28 awiie, p. 133. M2 & 53 Vict. c. 45. ° Benjamin, pp. 677 and 768. See also Com., Sect. 29 ante, p. 137. ^ Chalmers on Sale of Goods Act, p. 109. SUPPLEMENTARY. 285 " Document of title to goods " has the same mean- Sect. 62. ing as it has in the Factors Acts : See Com., Sect. 25 ante, p. 125, and Factors Act 1889, Sect. 1 (4). Text in Appendix I. ■post, p. 297. "Factors Acts" mean the Factors Act, 1889,^ the Factors (Scotland) Act, 1890,^ and any enact- ment amending or substituted for the same : See text of these Acts, Appendix I. post, pp. 296, 302. •' Fault " means wrongful act or default : See Sects, 7, 9, and 20. "Future goods" mean goods to be manufactured or acquired by the seller after the making of the contract of sale : The same definition is contained in Sect. 5 (1) ante, p. 27, and see CoM. ante, p. 30. " Goods " include all chattels personal other than things in action and money, and in Scotland all corporeal moveables except money. The term includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale : In the Stamp Act 1891,^ the expression used is " goods, wares, and merchandise," following Sect. 1 7 * of the Statute of Frauds repealed by this Act. " Goods," in this and most other statutes, include wares and 1 52 & 53 Vict. 0. 45. 2 53 & 54 yigt, (,_ 40. » 54 & 55 Vict. c. 39, Sect. 111. ■* In the revised Statutes called Sect. 16. See Schedule to this Act post, p. 290, and Appendix III. post, p. 348, note. 286 SALE OF GOODS ACT 1893. Sect. 62. merchandise. ^^ Moveables" in Scotland, correspond to " chattels personal " in England, and " corporeal moveables " to " chattels personal other than things in action " (choses in action). " Things in action " are equivalent to " incor- poreal moveables " in Scotland, and include debts, shares, scrip, bills, etc. " Industrial growing crops " 1 is the Scottish equivalent for " emblements " (fructus industriaies), but, possibly, the phrase though added in Committee in connection with the adaptation of the bill to Scotland, may embrace more than mere " emblements," and may thus extend the scope of the original bill as applied to England and Ireland. The word " emblements " appears to apply only to the ordinary produce or crop within the year of sowing,^ while " industrial growing crops " may extend to a class of property which, both in England and Scotland, partakes of the nature of both real (heritable) and personal (moveable) estate. " There is," says Benja- min, " an intermediate class of products of thei soil, not annual as emblements, not permanent as grass or trees, but affording either no crop till the second or third year, or affording a siiccession of crops for two or three years before they are exhausted, such as madder, clover, teasles, etc." ^ Questions, in England, on this subject, have chiefly arisen in connection with the Statute of Frauds, and it is said that " the law cannot be considered as settled."* The term "industrial growing crops" seems, however, to comprehend the class of property referred to. " Lien " in Scotland includes right of retention : See Com., Sect. 39 ante, p. 186. " Plaintiff" includes pursuer, complainer, claimant in a multiplepoinding and defendant or defender counterclaiming : Uniformity would have been preserved by inserting the words " in Scotland " before " pursuer," as in the case of " defender " supra, p. 284. 1 Ersk. ii. 2. i ; Bell's Com. i. 187, ii. 2 ; Bell's Prin., Sect. \i1Z— Grant v. Smith (1758), Mor. 9561 ; Elder v. Alien (1833), 11 Sh. 902. * Per Cur in Graves v. WeU (1833), 5 B. & Ad. 105 ; Stephen's Com., 10th ed. ii. 231 ; Williams on Executors, 9th ed. p. 626. " Benjamin, p. 125. * Benjamin, p. 128. SUPPLEMENTARY. 287 " Property " means the general property in goods, Sect. 62. and not merely a special property : See Com., Sect. 1 arde, p. 5. " Quality of goods" includes their state or condition : See Sect. 14 ante, p. 66. "Sale" includes a bargain and sale as well as a sale and delivery : See Sect. 1 note (a) ante, p. 2, and Com. ante, p. 4. " Seller " means a person who sells or agrees to sell goods : " Specific goods" mean goods identified and agreed upon at the time a contract sale is made : See Sects. 6, 7, 17, 18, 19. Where the contract is for specific goods, it will not be fulfilled by delivery of other goods, though of equal or superior quality.'^ " Warranty " as regards England and Ireland means an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated. As regards Scotland a breach of warranty shall be deemed to be a failure to perform a material part of the contract. See Sects. 11 and 53, and Com., Sect. 11 ante, p. 52. (2.) A thing is deemed to be done " in good faith " ' Allason v. Watson (1757), Mor. 14246 ; Thomson Brors. v. Thomson (1885), 13 Ret. 88. 288 SALE OF GOODS ACT 1893. Sect. 62. within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not. The same definition forms Sect. 90 of the Bills of Exchange Act 1882.1 jj seems confirmed by the House of Lords judgment in Berry v. Peek''' (1889). See Com., Sect. 61 ante, ^j. 272. (3.) A person is deemed to be insolvent within the meaning of this Act who either has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not, and whether he has become a notour bankrupt or not. See Sects. 39, 41, and 44. The Companies Act 1862,3 gect. 80, contains criteria as to when a company is to be deemed unable to pay its debts. Insolvency, in the above definition, is "practical " as opposed to " absolute." * "Notour bankruptcy" siTpT^lies only to Scotland. It has been created by statute,^ and has been described as "a status indicating insolvency of a public or notorious description, and having attached to it certain definite legal effects. The notour bankrupt is a person who is not only in- solvent, but whose insolvency is made known to the public by steps of legal diligence having been taken against him for the recovery of debt."* Notour bank- ruptcy is a pre-requisite of sequestration where the appli- cation is at the instance of a creditor, and it is constituted by sequestration where the application is at the instance of a debtor who is not already notour bankrupt. It is also a pre-requisite in the process of cessio bonorum. The period within which preferences to particular creditors may be reduced, and within which diligences by creditors M5 & 46 Vict. 0. 61. See Jones v. Gordon (1877), 2 App. Ca. 616.— Per Lord Blackburn at p. 628. 2 ^ ^pp q^ g^j 3 25 & 26 Vict. c. 89. ^ See Goudy on BanTcruvtey, p. 18. 5 1696, 0. 5; 19 & 20 Vict. c. 79, Sects. 7, 8, 9 ; 43 & 44 Vict. c. 34, Sect. 6. ^ Goudy on Bankruptcy, p. 65. 5 UPPLEMENTAR Y. 289 are equalised, is reckoned from the date of notour bank- Sect. 62. ruptcy. It does not, however, of itself effect a distribu- tion of the debtor's estates, which can only be done by sequestration, or cessio, or under a voluntary trust-deed or composition arrangement. In some respects it is analogous to an act of bankruptcy in England, just as sequestration corresponds to an adjudication of bank- ruptcy. Partnerships may be rendered notour bankrupt, and even public incorporated companies to the effect of equalising diligences,'- but such companies cannot be sequestrated.^ (4.) Goods are in a " deliverable state " within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them. See Sects. 18 and 29. Compare "fit or ready for delivery" in Sect. 4 (2). 63. This Act shall come into operation on the Sect. 63. first day of January one thousand eight hundred ^°™'^°^" and ninety-four.^"^ Note. (a) Owing to unexpected delay in adjusting the respective amendments of the Lords and the Commons, the date for com- mencement fixed in the bill had passed before the Eoyal Assent could be obtained. The date could not be altered without a new bill, and thus the Act became unintentionally retrospective. Eoyal Assent was given on 20th February 1894. 64. This Act may be cited as the Sale of Goods Sect. 64. . Short titli Act 1893. 1 aiarhe v. Ei'nde, Milne, and Co. (1884), 12 Ret. 347. 2 Standard Invest. Co. v. Dunblane Hydro. Co. (1884), 12 Bet. 328. U 290 SALE OF GOODS ACT 1893. SCHEDULE. (See Sect. 60 ante, p. 268.) This schedule is to be read as referring to the revised edition of the statutes prepared under the direction of the Statute Law Committee. Enactments Ebpealed. Session and Chapter. Title of Act and Extent of Kepeal. 1 Jac. I. c. 21 29 Oha. II. c. 3 9 Geo. IV. 0. 14 19 & 20 Vict. c. 60 19 & 20 Vict. c. 97 An Act against Brokers. The whole Act. An Act for the prevention of frauds and perjuries. In part ; that is to say, sections fifteen and sixteen.* An Act for rendering a written memo- randum necessary to the validity of certain promises and engagements. In part ; that is to say, section seven. The Mercantile Law Amendment (Scot- land) Act, 1856. In part ; that is to say, sections one, two, three, four, and five. The Mercantile Law Amendment Act, 1856. In part ; that is to say, sections one and two. Commonly cited as sections sixteen and seventeen. APPENDIX L- STATUTES. Excerpts from THE STATUTE OF FEAUDSi (1677). (29 Car. II. c. 3.) An Act for Prevention of Frauds and Perjuries. Sect. 4. — And be it further enacted by the authority aforesaid Promises and that from and after the said four and twentieth day of June ^greements (1677) no action shall be brought whereby to charge any executor or administrator upon any special promise to answer damages out of his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriage of another person, or to charge any person upon any agreement made upon consideration of marriage, or upon any contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them, or upon any agreement that is not to be per- formed within the space of one year from the making thereof, 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 person thereunto by him lawfully authorised. Sect. 17.^ — ^And be it further enacted by the authority afore- Contracts for said that from and after the said four and twentieth day of June ^^^^l^ ^pounds (1677) no contract for the sale of any goods, wares, or merchan- or more. ^ The Statute of Frauds does not apply to Scotland. See Notes, Ap- pendix III. post, p. 345. ^ This section appears as Sect. 16 in the Revised Statutes, and is repealed by the Sale of Goods Act, Sect. 60, and relative Schedule, ante, p. 290. It is reproduced in a slightly different form in Sect. 4 of the Bale of Goods Act. See Note (h) ante, p. 27. 292 SALE OF GOODS ACT 1S93. dises, for the price of ten pounds sterling or upwards, shall be allowed to be good except the buyer shall accept part of the goods so sold and actually receive the same, or give some thing in earnest to bind the bargain or in part of payment, 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 their agents thereunto lawfully authorised. Excerpt from LOED TENTERDEN'S ACT^ (1828). (9 Geo. IV. c. 14) An Act for rendering a written memorandum necessary to the validity of certain promises and engagements. [29 Car. II. Sect. 7. — And whereas by an Act passed in England in the "■ ^'^ twenty-ninth year of the reign of King Charles the Second, intituled an Act for the prevention of frauds and perjuries, it is, among other things, enacted that from and after the 24th day of June 1677, no contract for the sale of any goods, wares, and merchandises, for the price of ten pounds sterling or upwards, shall be allowed to be good, except the buyer shall accept part of the goods so sold, and actually receive the same, or give some- thing in earnest to bind the bargain, or in part of. payment, 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 their agents thereunto lawfully authorised. And whereas a [Irish Act, 7 similar enactment is contained in an Act passed in Ireland in the J, 'j2 ] seventh year of the reign of King William the Third : And whereas it has been held, that the said recited enactments do not extend to certain executory contracts for the sale of goods, which nevertheless are within the mischief thereby intended to be remedied : and it is expedient to extend the said enactments to such executory contracts : Be it enacted, That the said enactments shall extend to all ^ This Act does not apply to Scotland. The section here quoted is repealed by the Sale of Goods Act, Sect. 60, and relative Schedule, ante, p. 290, but is reproduced in Sect. 4 of that Act. See Note (h) ante, p. 27. A PPENDIX I.—STA TUTES. 293 contracts for the sale of goods of the value of ten pounds sterling Recited Acts and upwards, notwithstanding the goods may be intended to be contracts for delivered at some future time, or may not at the time of such goods of contract be actually made, procured, or provided, or fit or ready upwards, for delivery, or some act may be requisite for the making or although the . delivery be completing thereof or rendering the same fit for delivery. not made. THE BILLS OF LADING ACT 1855.i (18 & 19 Vict. c. 111.) An Ad to amend, the Law relating to Bills of Lading. [14th August 1855.] Whereas by the custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner,' and it is expedient that such rights should pass with the property ; And whereas it frequently happens that the goods in respect of which bills of lading purport to be signed, have not been laden on board, and it is proper that such bills of lading in the hands of a lonA-fide holder for value, should not be questioned by the master or other person signing the same on the ground of the goods not having been laden as aforesaid : Be it therefore enacted as follows : — 1. — Every consignee of goods named in a bill of lading. Rights under and every endorsee of a bill of lading to whom the property in to TOsUn'con- the goods therein mentioned shall pass, upon or by reason of signee or such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself. 2. — Nothing herein contained shall prejudice or affect Not to affect any right of stoppage in transitu, or any right to claim freight sJopp°ge j-„ against the original shipper or owner, or any liability of the con- transitu or . , , . J 1 ■ 1 • 1 claims for Signee or endorsee by reason or in consequence 01 his being such freight. 1 See Com., Sect. 25 ante, p. 126. 294 SALE OF GOODS ACT 1893. Bill of lading in hands of consignee, etc., conclusive evidence of tlie shipment as against the master, etc. consignee or endorsee, or of his receipt of the goods by reason or in consequence of such consignment or endorsement. 3. — Every bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel shall be conclusive evidence of such shipment as against the master or other person signing the same, notwithstanding that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not been in fact laden on board ; provided, that the master or other person so signing may exonerate him- self in respect of such misrepresentation by showing that it was caused without any default on his part, and wholly by the fraud of the shipper, or of the holder, or some person under whom the holder claims. Preamble and Eepealed Sections of THE MERCANTILE LAW AMENDMENT ACT, SCOTLAND, 1856.1 (19 & 20 Vict. c. 60.) Preawhle. Whereas inconvenience is felt by persons engaged in trade by reason of the laws of Scotland being in some particulars different from those of England and Ireland in matters of common occurrence in the course of such trade, and with a view to remedy such inconvenience it is expedient to amend the law of Scotland as hereinafter is mentioned : Be it therefore enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : — Sections repealed by Sale of Goods Act. 1. — From and after the passing of this Act, where goods have Goods sold, but not de- livered, not to be attachable by creditors ^ Sections 1 to 5 repealed by Sale of Goods Act, Sect. 60, and relative of the seller. Schedule. Following Page is Damaged Best Image Available APPENDIX I.—STA TUTES. 295 been sold, but the same have not been delivered to the purchaser, and have been allowed to remain in the custody of the seller, it shall not be competent for any creditor of such seller, after the date of such sale, to attach such goods as belonging to the seller by any diligence or process of law, including sequestration, to the effect of preventing the purchaser or others in his right from enforcing delivery of the same ; and the right of the purchaser to demand delivery of such goods shall from and after the date of such sale be attachable by or transferable to the creditors of the purchaser. 2. — Where a purchaser of goods who has not obtained delivery Seller not thereof shall after the passing of this Act sell the same, the r°htofreten- purchaser from him or any other subsequent purchaser shall be tion generally- entitled to demand that delivery of the said goods shall be made purchaser.""" to him and not to the original purchaser; and the seller, on intimation being made to him of such subsequent sale, shall be bound to make such delivery, on payment of the price of such goods, or performance of the obligations or conditions of the contract of sale, and shall not be entitled, in any question, with a subsequent purchaser, or others in his right, to retain the said goods for any separate debt or obligation alleged to be due to such seller by the original purchaser : Provided always, that nothing in this Act contained shall prejudice or affect the right of retention of the seller for payment of the purchase price of the goods sold, or such portion thereof as may remain unpaid, or for performance of the obligations or conditions of the contract of sale, or any right of retention competent to the seller, except as i,,t 1-/- •■ - - -„ „„„ Riir.h risht Lrrestment nd poinding f goods by eller. 'Rights of land- lord not to be affected, SALE OF GOODS ACT 1893. Seller not held to warrant goods, except there he an express warranty in contract. 5. — Where goods shall, after the passing of this Act, be sold, the seller, if at the time of the sale he was without knowledge that the same were defective or of bad quality, shall not be held to have warranted their quality or suflBciency, but the goods, with all faults, shall be at the risk of the purchaser, unless the seller shall have given an express warranty of the quality or sufficiency of such goods, or unless the goods have been expressly sold for a specified and particular purpose, in which case the seller shall be considered, without such warranty, to warrant that the same are fit for such purpose. Excerpt from THE MERCHANDISE MAEKS ACT 1887. (50 & 51 Vict. c. 28.) An Act to consolidate and amend the Law relating to Fratidulent Marks on Merchandise. [23rd August 1887.] Sect. 17.^ — On the sale or in the contract for the sale of any goods to which a trademark, or mark, or trade description has been applied, the vendor shall be deemed to warrant that the mark is a genuine trademark and not forged or falsely applied, or that the trade description is not a false trade description within the meaning of this Act, unless the contrary is expressed in some writing signed by or on behalf of the vendor and delivered at the time of the sale or contract to and accepted b}"^ the vendee. 5 & 6 Vict. c. 39. 40 & 41 Vict, c. 39. v„„.,iuiL KJL uie property ot merchants and others who may hereafter enter into contracts or agreements in relation to goods, wares, or merchandise entrusted to factors or agents. An Act to amend the law re- lating to advances bona fide made to agents entrusted with goods. An Act to amend the Factors Acts. The whole Act. The whole Act. Excerpts from THE STAMP ACT 1891. (54 & 55 Vict. c. 39.) An Act to consolidate the Enactments granting and relating to the Stamp Duties upon Instruments and certain other enactments relating to Stamp Duties. [21st July 1891.J Agreements. Duty may he 22. The duty of sixpence upon an agreement may be adhesWe ^ denoted by an adhesive stamp, -which is to be cancelled by the stamp. person by whom the agreement is first executed. Bills of Lading. Bills of 40. — (1) A bill of lading is not to be stamped after the execu- lading. tiojj thereof. Opposite Page Missing \ APPENDIX I.—STA TUTES. 299 pledge on his behalf shall be deemed to be an agreement with the agent. 7. — (1) Where the owner of goods has given possession of Provisions as the goods to another person for the purpose of consignment or andconfisnees sale, or has shipped the goods in the name of another person, and the consignee of the goods has not had notice that such person is not the owner of the goods, the consignee shall, in respect of advances ihade to or for the use of such person, have the same lien on the goods as if such person were the owner of the goods, and may transfer any such lien to another person. (2) Nothing in this section shall limit or affect the validity of any sale, pledge, or disposition, by a mercantile agent. Dispositions by Sellers and Buyers of Goods. 8. — ^Where a person, having sold goods, continues, or is, in Disposition by possession of the goods or of the documents of title to the goods, j^g^"^"'*'™" the delivery or transfer by that person, or by a mercantile agent possession. acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, or under any agree- ment for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same. 9. — Where a person, having bought or agreed to buy goods, Disposition by obtains with the consent of the seller possession of the goods or j^g po° gggion. the documents of title to the goods, the delivery or transfer, by that person or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposi- tion thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a, mercantile agent in possession of the goods or documents of title with the consent of the owner. 10.— Where a document of title to goods has been lawfully transferred to a person as a buyer or owner of the goods, and 300 SALE OF GOODS ACT 1893. Effect of transfer of documents on vendor's lien or right of stoppage in transitu. that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last- mentioned transfer shall have the same effect for defeating any vendor's lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage in transitu. Mode of trans- ferring documents. Saving for rights of true owner. Saving for common law powers of agent. Repeal. Supplemental. 11. — For the purposes of this Act, the transfer of a document may be by endorsement, or, where the document is by custom or by its express terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery. 12. — (1) Nothing in this Act shall authorise an agent to exceed or depart from his authority as between himself and his principal, or exempt him from any liability, civil or criminal, for so doing. (2) Nothing in this Act shall prevent the owner of goods from recovering the goods from an agent or his trustee in bank- ruptcy at any time before the sale or pledge therepf, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the ' sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, or any of them, by way of lien as against the owner, or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his lien. (3) Nothing in this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set off on the part of the buyer against the agent. 13^^ — The provisions of this Act shall be construed in ampli- fication and not in derogation of the powers exercisable by an agent independently of this Act. 14. — The enactments mentioned in the schedule to this Act are hereby repealed as from the commencement of this Act, but this repeal shall not affect any right acquired or liability incurred APPENDIX I.—STA TUTES. 303 (2) Every person who makes or executes any bill of lading not duly stamped shall incur a iine of fifty pounds. Delivery Orders. 69. — (1) For the purposes of this Act the expression "delivery Provisions as order" means any document or writing entitling, or intended to en- cUlivery OTder. title, any person therein named, or his assigns, or the holder there- of, to the delivery of any goods, wares, or merchandise of the value of forty shillings or upwards lying in any dock or port, or in any warehouse in which goods are stored or deposited on rent or hire, or upon any wharf, such document or writing being signed by or on behalf of the owner of such goods, wares, or merchandise, upon the sale or transfer of the property therein. (2) A delivery order is to be deemed to have been given upon a sale of, or transfer of the property in, goods, wares, or merchan- dise of the value of forty shillings or upwards, unless the contrary is expressly stated therein. (.3) The duty upon a delivery order may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the instrument is made, executed, or issued. 70. — (1) If any person — Penalty for (a) Untruly states, or knowingly allows to be untruly stated, "tanipeTor in a delivery order, either that the transaction to which untrue order, it relates is not a sale or transfer of property, or that the goods, wares, or merchandise to which it relates are not of the value of forty shillings ; or (b) Makes, signs, or issues any delivery order chargeable with duty, but not being duly stamped ; or (c) Knowingly, either himself, or by his servant or any other person, delivers, or procures, or authorises the delivery of, any goods, wares, or merchandise mentioned in any delivery order which is not duly stamped, or which contains to his knowledge any false statement with reference either to the nature of the transaction, or the value of the goods, wares, or merchandise, he shall incur a fine of twenty pounds. (2) But a delivery order is not, by reason of the same being unstamped, to be deemed invalid in the hands of the person 304 SALE OF GOODS ACT 1893. By whom duty on de- livery order to be paid. having the custody of, or delivering out, the goods, wares, or merchandise therein mentioned, unless such person is proved to have been party or privy to some fraud on the revenue in relation thereto. 71. The duty upon a delivery order is, in the absence of any special stipulation, to be paid by the person to whom the order is given, and any person from whom a delivery order chargeable with duty is required may refuse to give it, unless or until the amount of the duty is paid to him. Provisions as to duty upon receipts. Terms upon which receipts may he stamped after execution. Penalty for (fences in reference to receipts. Beceipts. 101. — (1) For the purposes of this Act the expression " receipt" includes any note, memorandum, or writing whereby any money amounting to two pounds or upwards, or any bill of exchange or promissory note for money amounting to two pounds or upwards, is acknowledged or expressed to have been received or deposited or paid, or whereby any debt or demand, or any part of a debt or demand, of the amount of two pounds or upwards, is acknow- ledged to have been settled, satisfied, or discharged, or which signifies or imports any such acknowledgment, and whether the same is or is not signed with the name of any person. (2) The duty upon a receipt may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the receipt is given before he delivers it out of his hands. 102. A receipt given without being stamped may be stamped with an impressed stamp upon the terms following ; that is to say, (1) Within fourteen days after it has been given, on payment of the duty and a penalty of five pounds ; (2) After fourteen days, but within one month, after it has been given, on payment of the duty and a penalty of ten pounds ; and shall not in any other case be stamped with an impressed stamp. 103. If any person — (1) Gives a receipt liable to duty and not duly stamped ; or (2) In any case where a receipt would be liable to duty refuses to give a receipt duly stamped ; or (3) Upon a payment to the amount of two pounds or upwards APPENDIX I.— STATUTES. 305 gives a receipt for a sum not amounting to two pounds, or separates or divides the amount paid with intent to evade the duty ; he shall incur a fine of ten pounds. Warrants for Goods. 111. — (1) For the purposes of this Act the expression Provisions as "warrant for goods'' means any document or writing, being for goods. evidence of the title of any person therein named, or his assigns, or the holder thereof, to the property in any goods, wares, or merchandise lying in any warehouse or dock, or upon any wharf, and signed or certified by or on behalf of the person having the custody of the goods, wares, or merchandise. (2) The duty upon a warrant for goods may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the instrument is made, executed, or issued. (3) Every person who makes, executes, or issues, or receives or takes by way of security or indemnity, any warrant for goods not being duly stamped, shall incur a fine of twenty pounds. First Schedule. Agreement or any Memorandum of an Agreement, made in England or Ireland under hand only, or made in Scot- land without any clause of registration, and not otherwise specifically charged with any duty, whether the same be only evidence of a contract, or obligatory upon the parties from its being a written instrument .006 Exem'pUons. (1) Agreement or memorandum the matter whereof is not of the value of 5L (2) Agreement or memorandum for the hire of any labourer, artificer, manufacturer, or menial servant. (3) Agreement, letter, or memorandum made for or relating to the sale of any goods, wares, or merchandise. X 3o6 SALE OF GOODS ACT 1893. Bill of Lading of or for any goods, merchandise, or effects to be exported or carried coastwise .006 And se« section 40. Delivery Order . . . . .001 And see sections 69, 70, and 71. Dock Warrant. See Warrant for Goods. Receipt given for, or upon the payment of, money amounting to 2Z. or upwards . . .001 Exemptions. (8) Receipt written upon a bill of exchange or promissory note duly stamped, or upon a bill drawn by any person under the authority of the Admiralty, upon and payable by the Accountant General of the Navy. (9) Receipt given upon any bill or note of the Bank of England or the Bank of Ireland. (11) Receipt indorsed or otherwise written upon or contained in any instrument liable to stamp duty, and duly stamped, acknow- ledging the receipt of the consideration money therein expressed, or the receipt of any principal money, interest, or annuity thereby secured or therein mentioned. Warrant for Goods . . . . .003 Exemptvms. (1) Any document or writing given by an inland carrier acknowledging the receipt of goods conveyed by such carrier. (2) A weight note issued together with a duly stamped warrant, and relating solely to the same goods, wares, or merchandise. And see section 111. APPENDIX I.ST A TUTES. 307 Excerpts from MERCHANT SHIPPING ACT 1894. (57 & 58 Vict. c. 60.) (See Sale of Goods Act, Sect. 3, ante, pp. 17, 20.) Procedure for Registration. 5. — Every registrar of Britisli ships shall keep a book to be Register book. called the register book, and entries in that book shall be made in accordance with the following provisions : (i.) The property in a ship shall be divided into sixty-four shares. (ii.) Subject to the provisions of this Act with respect to joint owners or owners by transmission, not more than sixty- four individuals shall be entitled to be registered at the same time as owners of any one ship ; but this rule shall not affect the beneficial title of any number of persons or of any company represented by or claiming under or through any registered owner or joint owner : (iti.) A person shall not be entitled to be registered as owner of a fractional part of a share in a ship ; /but any number of persons not exceeding five may be registered as joint owners of a ship or of any share or shares therein : (iv.) Joint owners shall be considered as constituting one person only as regards the persons entitled to be registered, and shall not be entitled to dispose in severalty of any interest in a ship, or in any share therein in respect of which they are registered : (v.) A corporation may be registered as owner by its cor- porate name. 10. — (1) On the first registry of a ship the following evidence Evidence on shall be produced in addition to the declaration of ownership ; — ''^* registry. (a) In the case of a British-built ship, a builder's certificate, that is to say, a certificate signed by the builder of the ship, and containing a true account of the proper denomination and of the tonnage of the ship, as esti- mated by him, and of the time when and the place 3o8 SALE OF GOODS ACT 1893. , Transfer of shares. Eegistry of transfer. Power of court to prohibit transfer. where she was built, and of the name of the person (if any) on whose account the ship was built, and if there has been any sale, the bill of sale under which the ship, or a share therein, has become vested in the applicant for registry. Transfers and Transmissions. 24. — (1) A registered ship or a share therein (when disposed of to a person qualified to own a British ship) shall be transferred by bill of sale. (2) The bill of sale shall contain such description of the ship as is contained in the surveyor's certificate, or some other description sufficient to identify the ship to the satisfaction of the registrar, and shall be in the form marked A in the first part of the First Schedule to this Act, or as near thereto as circumstances permit, and shall be executed by the transferor in the presence of, and be attested by, a witness or witnesses. 26. — (1) Every bill of sale for the transfer of a registered ship or of a share therein, when duly executed, shall be produced to the registrar of her port of registry, with the declaration of transfer, and the registrar shall thereupon enter in the register book the name of the transferee as owner of the ship or share, and shall endorse on the bill of sale the fact of that entry having been made, with the day and hour thereof. (2) Bills of sale of a ship or of a share therein shall be entered in the register book in the order of their production to the registrar. 30. — Each of the following courts, namely : — (a) In England or Ireland the High Court, (b) in Scotland the Court of Session, (c) in any British possession the court having the principal civil jurisdiction in that possession ; and {d) in the case of a port of registry established by Order in Council under this Act, the British court having the principal civil jurisdiction there, may, if the court think fit (without prejudice to the exercise of any other power of the court), on the application of any interested person make an order prohibiting for a time speci- fied any dealing with a ship or any share therein, and the court APPENDIX I.STA TUTES. 309 may make the order on any terms or conditions they think just, or may refuse to make the order, or may discharge the order when made, with or without costs, and generally may act in the case as the justice of the case requires; and every registrar, without being made a party to the proceeding, shall on being served with the order or an official copy thereof obey the same. Trusts and Equitahle Rights. 56. — ^o notice of any trust, express, implied, or constructive, Notice of trusts not received. shall be entered in the register book or be receivable by the *™^'^ °°* registrar, and, subject to any rights and powers appearing by the register book to be vested in any other person, the registered owner of a ship or of a share therein shall have power absolutely to dispose in manner in this Act provided of the ship or share, and to give efifectual receipts for any money paid or advanced by way of consideration. 57.— The expression "beneficial interest," where used in this Equities not Part of this Act, includes interests arising under contract and ^'^i"'^^" °y other equitable interests ; and the intention of this Act is, that without prejudice to the provisions of this Act for preventing notice of trusts from being entered in the register book or received by the registrar, and without prejudice to the powers of disposition and of giving receipts conferred by this Act on registered owners and mortgagees, and without prejudice to the provisions of this Act relating to the exclusion of unqualified persons from the ownership of British ships, interests arising under contract or other equitable interests may be enforced by or against owners and mortgagees of ships in respect of their interest therein in the same manner as in respect of any other personal property. Retwns, Evidence, and Fm-ms. 65. — (1) The several instruments and documents specified in Forms of the second part of the First Schedule to this Act shall be in the f^^^g^^c- form prescribed by the Commissioners of Customs, with the tions as to consent of the Board of Trade, or as near thereto as circumstances ^^^^ ^' permit; and the Commissioners of Customs may, with the consent of the Board of Trade, make such alterations in the 3IO SALE OF GOODS ACT 1893. forms so prescribed, and also in the forms set out in the first part of the said Schedule, as they may deem requisite. (2) A registrar shall not be required without the special direction of the Commissioners of Customs to receive and enter in the register book any bill of sale, mortgage, or other instru- ment for the disposal or transfer of any ship or share, or any interest therein, which is made in any form other than that for the time being required under this Part of this Act, or which contains any particulars other than those contained in such form • but the said Commissioners shall, before altering the forms, give such public notice thereof as may be necessary in order to prevent inconvenience. (3) The Commissioners of Customs shall cause the said forms to be supplied to all registrars under this Act for distribution to persons requiring to use the same, either free of charge, or at such moderate prices as they may direct. (4) The Commissioners of Customs, with the consent of the Board of Trade, may also, for carrying into effect this Part of this Act, give such instructions to their officers as to the manner of making entries in the register book, as to the execution and attestation of powers of attorney, as to any evidence required for identifying any person, as to the referring to themselves of any question involving doubt or difficulty, and generally as to any act or thing to be done in pursuance of this Part of this Act, as they think fit. [Schedule. APPENDIX I.—STATUTES. 311 First Schedule— Part I. \T}ie forms in this Part of the Schedule are subject to alteration from time to time by the Commissioners of Customs, with the consent of the Board of Trade.] Form A — Bill of Sale. (Particulars as to Name of Ship, OiHcial Number, Port of Registry, Length, Breadth, Depth, Displacement, Engines (if any), Tonnage, etc., are to be here inserted.)' in consideration of the Sum of ^by the receipt shares in the boats, guns, paid to t whereof is hereby acknowledged, transfer ship above particularly described, and in her ammunition, small arms, and appurtenances, to the said Further t- -the said_ Jor§_ . heirs covenant with the said that 11 have power _and I to transfer in manner assigns, aforesaid the premises hereinbefore expressed to be transferred, and that the same are free from incumbrances ** . In witness whereof ha hereunto subscribed name and affixed seal _this day of One thousand eight hundred and Executed by the above-named, in the presence of * "I" or "we." t "Me" or " us." J "I" or "we." § " Myself and my" or " ourselves and our." II "His," "her," or " their." IT "I" or "we." ** If there be any subsisting Mortgage or outstanding Certificate of Mortgage, add ' ' save as ap- pears hy the Registry of the said Ship."^ ' In Form A space is left for these particulars in detail. ^ Form A has a marginal note as follows : "Note. — A Purchaser of a Registered British Vessel does not obtain a complete title until the Bill of Sale has been recorded at the Port of Registry of the Ship ; and neglect of this precaution may entail serious consequences." II. POSSESSION OF MOVEABLES. Scottish Cases Illustrative of Possession of Moveables AND ITS Legal Effects. [Note. — Cases of doubtful interpretation, or involving more than one point of law, are included under separate headings, with cross references. Questions of trade lien arising from usage are in general excluded. See on this subject More's Lectures, vol. i. p. 402 el seg.] I — Nature and Eequisites of Possession. [Note. — The distinction between natural and civil possession is illustrated by many cases throughout the various headings. Cases of civil possession by means of a middleman, such as a warehouseman or carrier, will be found under IV. post.'] Taylor v. Ranhen (1675), Mor. 9118 (possession by key of chest). Lees V. Dinvnddy (1707), Mor. 2546 (creditor in accidental possession at death of debtor allowed to retain for debt). Glendirming's CredUors v. Montgomery (1745), Mor. 2573 (creditor in possession through informal poinding allowed to retain for debt).i Burns v. Bruce and Baxter (1799), Hume 29 (horses in stable hired by clerk of company held to be in possession of company). 1 This case is "vmdoubtedly erroneous, because to justify retention in any case, the possession must have been originally lawful." More's Lectures, a. 403. See Louson v. CraiJc (1842), 4 D. 1452, per Lord Jus.-Clk. Hope at p. 1458. APPENDIX II.— POSSESSION. 313 I. — Nature and Eequisites — continued. More V. Dudgeon and Brodie (1801), Bell's Com. i. 186 and i. 1 93 (grain in seller's store — key with buyer's servant for sifting or airing — no possession by buyer). See also III. (4). Paul V. Cuthhertson (1840), 2 D. 1286 (growing wood — sym- bolical delivery ineffectual). Kerr v. Dundee Gas Co. (1861), 23 D. 343 (unfinished building- contract- — materials on ground at contractor's bankruptcy held possessed by owner of premises). Moore v. Gledden (1869), 7 Macp. 1016 (railway contract — plant on ground of railway company at date of contractor's bank- ruptcy held possessed by company in terms of contract). Barr and Shearer Y. Cooper (1873), 11 Macp. 651, Eevd. (1875), 2 Eet. H.L. 14 (ship under repair — shipbuilder's possession not lost by removal of vessel from private slip to public wet- dock). Hogg v. Armstrong and Mowat (1874), Shf. Ct. Glasgow, Guth. Sel. Ca., 1st ser. 438 (finder of £5 note in premises of shopkeeper entitled to retain against shopkeeper who was not true owner). Miller v. Hutchison and Dixon (1881), 8 Eet. 489 (circumstances of possession of horses by auctioneers held sufficient for claim of retention for general balance). Boss and Duncan v. Baxter and Co. (1885), 13 Eet. 185 (engines being fitted to ship in public harbour — no possession of ship by engineers). Henckell du Buisson and Co. v. Swan and Co. (1889), 17 Eet. 252 (ship built for delivery at Santa Lucia lost on voyage — circumstances in which held that buyers had not taken possession (as alleged) before commencement of voyage). Young v. AUiebulaget Ofverums Bruk (1890), 18 Eet. 163 (iron stored by a ship's broker in shed of Harbour Commissioners, who had custody of key but did not keep any record of storages, held to be in possession of Commissioners). See also IV. (1). West Lothian Oil Co. Ltd. v. Mair (1892), 20 Eet. 64 (empty barrels possessed by buyer by being placed in locked fence in seller's yard of which buyer received the key). See also IV. (1), and Com. ante, p. 279. Brewer and Co. v. Duncan and Co. (1892), 20 Eet. 230 (ship being built — last instalment paid and builder's certificate granted 314 SALE OF GOODS ACT 1893. I. — Nature and Requisites — continued. — vessel not removed but under control of buyer — held " handed over " in terms of contract). Pattison's Trustee v. Liston (1893), 20 Eet. 806 (household furniture — alleged possession by means of key of house — plea negatived). See also II. (4), and Com. ante, p. 280. II. — EuLE THAT Possession of Moveables presumes Property. (But see now Sale of Goods Act, Sect. 17 ante, p. 80.) (1) Possession sustained as against alleged Ownership insufficiently Home V. Atchison (1679), Mor. 9120 (necklace possessed eleven years). Russel V. Campbell (1699), Fountainhall, ii. 75 (mere proof of former ownership of horse not sufficient). Fergussony. Officers of State (17 id), Mor. 11618 (cattle in pos- session of person deceased). Sharpe v. Smyth (1832), 11 Sh. 38 (thrashing-mill held bond fide for five years on imperfect title — possessor preferred to creditors of former owner). Fife's Tmstees {Earl of) v. Snare (1849), 11 D. 1119 (mere allegation that picture stolen forty years previous will not warrant application for its judicial custody). See also as to proof required Scot V. Fletcher (1665), Mor. 11616 (atlas alleged to have been lent, but claimed in property). (2) Creditors of Reputed Ovmer in Possession preferred. [Note. — Many cases of imperfect transfer involve the doctrine of reputed ownership. See especially under II. (4) infra.] Turnbull v. Ker (1624), Mor. 11615 (cattle possessed for years under special condition as to grazing). Breichan v. Muirhead (1810), Hume 215 (tavern effects claimed by wife and daughter of tavern-keeper in possession). APPENDIX II.— POSSESSION. 3 1 5 II. — Rule that Possession presumes Property — continued. Cargill v. Somerville (1820), Hume 223 (goods in retail shop claimed by wife of possessor). Anderson v. Buchanan (1848), 11 D. 270 (furniture sold without change in possession). Brown v. Fleming (1850), 13 D. 373 (furniture claimed by wife under ante-nuptial contract). Edmond v. Mowat (1868), 7 Macp. 59 (bathing machines sold without change in possession). M'Caul's Trustees v. Thomson (1883), 10 Eet. 1064 (household furniture purchased from trustee for creditors, but allowed to remain in insolvent's possession- — trustee in subsequent seques- tration preferred). See also II. (5). M'Gavin v. Siurroch's Trustee (1891), 18 Eet. 576 (farm lease creating security over moveables in favour of landlord — tenant's creditors preferred). Hewafs Trustee v. Smith (1892), 19 Eet. 403 (pictures con- veyed by husband in marriage-contract, retenta possessione — subse- quent delivery in security preferred). Anderson v. Anderson's Trustee (1892), 19 Eet. 684 (furniture sold by husband to wife held " inmixed " with his estate. (3) Landlord of Reputed Oimer in Possession preferred in virtue of Hypothec. Kinneil v. Menzies (1790), Mor. 4973 (articles of furniture sold londfide but allowed to remain with seller). Wauchffpe v. Gall and Boss (1805), Hume 227 (furniture hired, but returned to owner before sequestration for rent). Wilson V. Spankie (17th December 1813), F.C. (furniture of sequestrated bankrupt allowed by creditors to remain in bank- rupt's house beyond current year — landlord preferred). Stewart v. Bell (31st May 1814), F.C. (furniture hired— true owner, as assignee of landlord, preferred to tenant's cautioner for rent). Benson and Bohertson, Petitioners (6th June 1820), F.C. (musical instrument hired by tenant — plea that hypothec does not affect single or special articles repelled). 3i6 SALE OF GOODS ACT 1893. II. — ^RuLE THAT Possession presumes Property — continued. Nelmes and Go. v. Ewing (1883), 11 Eet. 193 (billiard-table hired by keeper of billiard-room). Dickson v. Singer Manufacturing Co. (1886), Shf. Ct., Kirkcaldy, 30 Jour, of Juris. 658 (sewing-machine on hire-purchase). Duncanson and Henderson v. Maver and Son (1894), Shf. Ct., Glasgow, 2 Scots Law Times 359 (pianoforte on hire-purchase to tenant's wife). (4) Effect denied to alleged Transfer retenta possessione. [Note. — Additional cases will be found under I. and under II. (1) and II. (2) anie, and (where goods in the hands of a middleman) under IV. (2) and IV. (4) posf] Corbet v. Stirling (1666), Mor. 10602 (household plenishing— poinder preferred to prior latent disponee). Ker V. Scot and Elliot (1695), Mor. 9122 (actual delivery of sheep preferred to prior symbolical delivery). Carse v. Halyburton (1714), Mor. 9125 (household plenishing — poinder preferred to prior latent disponee). Hills V. Buchanan (1785), Mor. 14200, AM. H.L. (1786), 3 Pat. App. 47 (30 hhds. tobacco, of which eight delivered to insolvent buyer, but returned before actual bankruptcy — seller preferred to whole). See also III. (7). Salter v. Knoa^s Factor (1786), Mor. 14202 (malt in seller's warehouse — price paid, quantity measured and set apart for buyer — seller's creditors preferred). Arbuthnott v. Paterson (1798), Mor. 14220 (precepts for delivery of grain addressed to seller's tenants as custodiers, and in some cases acknowledged by them — seller preferred to buyer's creditors). Brodie v. Todd amd Co. (20th May 1814), F.C. (bill of lading sent to buyer on condition that acceptance sent in return — condition not fulfilled — ^goods retained by seller). See Sale of Goods Act, Sect. 19 (3). Johnstone v. Sprott (1814), Hume 448 (conveyance in security of advances retenta possessione ineffectual against general creditors). Taylffr v. Jack (1821), 1 Sh. 133 (N.E. 139) (taking hold of horse's ears not constructive delivery). See also IV. (2). APPENDIX II.— POSSESSION. 317 n. — Rule that Possession presumes Property — continued. Borthwick v. Grant (1829), 7 Sk 420 (household fumitnre — poinder preferred to prior latent disponee). Fraser v. Frisby (1830), 8 SL 982 (household furniture— poinder preferred to prior latent disponee). Wyld and Co. v. Bichardsm (1832), 10 Sh. 538 (spirits in seller's bonded store — delivery order intimated to excise store- keeper — landlord's hypothec preferred). Gibson V. May (1841), 3 D. 974 (poinder preferred to prior latent disponee). Shearer v. Christie (1842), 5 D. 132 (creditor of husband preferred to wife founding on post-nuptial marriage contract revocable as donation inter conjuges). Book V. Megget (1844), 6 D. 662 (hides in seller's tanning pits). Anderson v. Ford (1844), 6 D. 1315 (felled timber partly remaining on seller's lands). See also IIL (5). JPXaughtmi v. Baird and Co. (1852), 24 Sc. Jur. 623 ; 1 Stuart 1051 (iron sold and price paid — seller entitled to retain against sub-buyer for general balance due by original buyer). Dryden and Co. v. Harmlin and Co. (1853) ; Bell's Com., i. 243 (guano retained by seller — ^biU for price dishonoured). Mathkson v. Alison (1854), 17 D. 274 (delivery order for spirits in seller's bonded warehouse — seller's creditors preferred). See Com. ante, p. 195. M'Arthur v. Broum (1858), 20 D. 1232 (furniture, etc., pur- chased at auction under diligence, but allowed to remain on debtor's premises, held subject to poinding of the ground). Benton v. Craig (1864), 2 Macp. 1365 (moveable machinery of tenant assigned to creditor and assignation intimated to landlord, but possession retained). Anderson v. jSrCall (1866), 4 Macp. 765 (grain in owner's public store — delivery order in security of advance — ^transfer ineffectual). Wright v. Mitchell (1871), 9 ]SIacp. 516 (completed delivery to buyer — re-delivery to seller reduced under Bankruptcy Acts — buyer's creditors preferred). See also III. (6). Stieen v. Scott and Simson (1871), 9 Macp. 923 [goods invoiced and partly delivered in security — ^general creditors preferred). See ako HL (6). 3i8 SALE OF GOODS ACT 1893. II. — EuLE THAT Possession presumes Property — continued. Clark and Co. v. JFest Calder Oil Co. (1882), 9 Eet. 1017 (moveables and plant of manufacturing company assigned without change in possession). Seath and Co. v. Mom-e (1884), 12 Eet. 260; Affd. (1886), 13 Eet. H.L. 57 (machinery for ship in builder's yard). See also IV. (2), and Com. ante, p. 90. Ehind's Trustee v. Bohertson and Baxter (1891), 18 Eet. 623 (spirits in owner's bonded warehouse — delivery order in security of advance — transfer ineffectual). Pattison's Trustee v. lAston (1893), 20 Eet. 806 (household furniture assigned in security — alleged delivery by means of key of house — general creditors preferred). See also I. and Com. ante, p. 280. (5) Effect denied to Condition suspensive of the Sale or of the Passing of the Property. Brown v. Marr, Barclay, etc. (1880), 7 Eet. 427 (jewellery — sale or return — pawned — pawnbrokers preferred). See Com. ante, p. 94. Cropper and Co. v. Donaldson (1880), 7 Eet. 1108 (printing machine — hire-purchase — poinded by purchaser's creditors — creditors preferred). M'Caul's Trustees v. Thomson (1883, 10 Eet. 1064 (household furniture — hire-purchase — purchaser's creditors preferred). See also II. (2). Clarke and Co. v. Miller and Son's Trustee (1885), 12 Eet. 1035 [flax — payment by bill — acceptance of bill not suspensive condition). See also II. (10), and Com. ante, p. 102. (6) Effect given to Possession under Transfer by Fiduciary. Thomson v. Elies (1675), Mor. 9118 (moveables conveyed in trust by husband to wife — breach of trust — hona-fide purchaser from wife preferred to husband's heirs). Attwood V. Kinnear (1832), 10 Sh. 817 (wines fraudulently transferred by purchasing agents in security of advance to them — security effectual). APPENDIX II.— POSSESSION. 319 II. — EuLE THAT Possession presumes Property — continued. (7) Effect given to Possession under Assignation in Security. Henry v. Robertson and Sine (1822), 1 Sh. 399 (N.E. 437), (possessor preferred to assignor's creditor). (8) Effect given to Possession (although recent) as against Reputed Ovmership of Seller. Walhetr v. Irwin and Co. (1841), 3 D. 985 (shop goods — former owner's name above door). Miller's Trustee v. Shield (1862), 24 D. 821 (transaction challenged under Bankruptcy Acts, but sustained). Allan and Co.'s Trustee v. Gunn and Co. (1883) [transaction challenged under Bankruptcy Acts, but sustained). See also III. (4) and III. (8). (9) Effect given to Possession through Delivery Order. [Note. — The cases undernotecl arose out of the same circumstances, and -were decided at the same time and in the same manner hy the Court of Session. Only Pochin's Case appears in the Court of Session Reports. Vickers' Case was appealed to the House of Lords, where the affirming judgment proceeded, not on possession (as in the Court of Session), hut on the effect of an iron-warrant as a document of title under the Factors Act of 1842, Sect. 4. In the House of Lords opinions varied as to the effect of mere possession. Lord Watson emphatically affirming the Scottish principle. See now definition of "document of title" in Factors Act 1889, Sect. 1 (4) and Sale of Goods Act, Sect. 62 (1).] Pochin and Co. v. Rdbinows and Marjoribanks (1869), 7 Macp. 622 (iron-warrant obtained by fraud and pledged — pledgee in possession of goods entitled to retain for advance). Fickers v. Hertz (1871), 9 Macp. H.L. 65 (same as pre- ceding case). See also IV. (1). (10) Effect given to Delivery, notwithstanding Buyer's Insolvency or alleged Fraud. Prince v. Pallat (1680), Mor. 4932 (wines shipped for buyer— 320 ' SALE OF GOODS ACT 1893. II. — EuLE THAT Possession presumes Property — o seller allowed to prove buyer's insolvency at date of order — proof failed. See also IV. (4), and Com. ante, pp. 159, 204. Inglis V. Boyal Bank (1736), Mor. 4936 (grain delivered at various dates). See also III. (7), and Com. ante, p. 214. [Note. — Presumptive fraud intra triduwn established by this case, but overruled by the House of Lords in Allan, Steuart, and Go's Gase.'l Gordon v. Gardiner (1784), Mor. 4946 (copper stills purchased three months before bankruptcy). Allan, Steuart, and Co. v. Stem's Creditors (1790), Mor. 4949; Rev. H.L. (1790), sub nom. Jaffrey, etc. v. Allan, Stewart, and Co., 3 Pat. App. 191 (Court of Session held that presumption of fraud where goods delivered within three days of bankruptcy. House of Lords reversed, holding that fraud in all cases must be proved). See also IV. (3). Collins V. Marquis's Creditors {23x6. November 1804), E.G., Mor. 14223 (cargo timber partly delivered into buyer's woodyard — buyer's creditors preferred to the part delivered). See also III. (7) and IV. (3). Strachan v. Knox amd Co.'s Trustee (21st January 1817), F.C. (wines ex ship — bonded in name of buyer's agent). See also IV (4). Richmond v. Railton (1854), 16 D. 403 (mere insolvency not fraud — property in furniture held passed by delivery). See Com. amie, p. 132. Morton and Co. v. Ahercfromhy (1858), 20 D. 362 (goods pur- chased and shipped in buyer's name for Australian market — bills of lading endorsed by buyer to third party — held delivery complete). See also IV. (1) and IV. (4). Ehrenhacher and Co. v. Kennedy (1874), 1 Eet. 1131 (aver- ments of fraud by buyer, and prior creditor to whom goods delivered, held irrelevant, there being no averment of dolus dans causam contractui or of concerted fraud). Clarice and Co. v. Miller and Son's Trustee (1885), 12 Eet. 1035 (flax delivered during consultations by buyer as to stopping payment). See also II. (5), and Com. ante, p. 102. APPENDIX II.— POSSESSION. 321 II. Rule that Possession presumes Property — continued. (11) Seller (retenta possessione) or his Creditors preferred, notwith- standing Mercantile Law Amendment Act 1856. Wyper v. Harveys, etc. (1861), 23 D. 606 (whisky in seller's bonded warehouse — sub-sale not duly intimated — doubtful inter- pretation of Act). See ante, p. 92, note. Sim V. Grant (1862), 24 D. 1033 (seller of horse retaining possession and use, with power to sell). M'Meehin v. Boss (1876), 4 Ret. 154 (sale of scrap-iron lying in yard of shipbuilder or to be produced within a specified period — buyer no jus ad rem specificam). Stewart v. Fraser and Co., etc. (1878), Shf. Ct., Glasgow, Guth. Sel. Ca. 2nd ser. 512 (wheat, part of larger quantity in store — delivery order countermanded by sellers before indorsee of buyers presented it to storekeeper). (1 2) Effect denied to Pledge or Security without Possession. Tod and Son v. Merchant Banking Co. of London, Ltd. (1883), 10 Eet. 1009 (bank holding bills of lading in security, and having control of goods, allowed part to be delivered under temporary arrangement). But see III. (1) and III. (2). III. Exceptions to rule that Possession of Moveables PRESUMES Property. (1) Presumption from Possession set aside by Contrary Proof. Hog V. Hamilton (1679), Mor. 9119 (moveables possessed by widow — claimed by nearest of kin). Abercromby v. Story (1687), Mor. 11618 (moveables possessed by widow — claimed by children of first husband). Warrender v. Alexander (1715), Mor. 10609 (goods for export — temporary custody). Mackenzie v. Newall (1824), 3 Sh. 206 (accidental possession will not found claim of retention in security). Y 322 SALE OF GOODS ACT 1893. III. Exceptions to Presumption of Property — c^ Louson V. Craik (1842), 4 D. 1452 (accidental possession will not found claim of retention in security). North - Western Bank, Ltd. v. Poynter, Son, and Macdonalds (1894), 21 Ret. 513, Eev. H.L. 32 S.L.E. 245 (bills of lading held by bank in security, but handed back to pledgors as agents for the sale of the goods on behalf of pledgees — held that pledgees' possession had not been lost). (2) Effect denied to Flea of Reputed Ovynership arising from Possession. i. As against Creditors. [Note. — See also cases under III. (4).] Eadie v. Young (1815), Hume 705 (horses and carts sold and afterwards leased by buyer to seller — buyer preferred to seller's creditors.) See also III. (4). Gray and Co. v. Farquhar (1823), 2 Sh. 160 (N.E. 146) (former owner of ship in possession as manager — conditional obligation by new owner to re-convey — claim of creditor of former owner repelled). M'Millan v. Frice (1837), 15 Sh. 916 (household furniture not subject to diligence of creditors of liferenter). Macdougall v. Whitelaw (1840), 2 D. 500 (household furniture of sister in house occupied by herself and her brother — reputed ownership of brother refused effect). Fyfe V. Woodman (1841), 4 D. 255 (claim of daughters to household furniture sustained against reputed ownership of father). Smith V. Flowerdew (1842), 5 D. 335 (claim of daughter to household furniture sustained against reputed ownership of mother). Young v. Loudown (1855), 17 D. 998 (furniture belonging to wife exclusive of jus 9?Mri. 102. Brown v. Watson (1816), Ilumo 709 (cattle and sheep bought by insolvent farmer and delivered in his absence — upon his return ho re-delivered them to seller — seller preferred to buyer's creditors). Schwwrmans and Hms v. Goldie (1828), 6 Sh. 1110 (cargo of cheese — buyer's insolvency announced, but concealed from sellers). See Com. wide, p. 21.5. I'tujlk v. I'lirt Eglinton tSpinniiu/ Co. (1842), 4 D. 478 (goods refused l)y insolvent buyer and sent to neutral custody, but aftorwarilH received by buyer, held not delivered). Wall. V. Firullay and Jlmdric (1846), 8 D. 529 (whisky sold and delivered — buyer concealed from seller that he was taking steps for sequestration). See Com. . Leonard (1677) . iii. (3) Henokell du Buisson and Co. V. Swan and Co. (1889) ... I. Henderson v. Gibson (1806) . . . III. (3) Henry %. Dunlop and Co. (1842) . ■ . . III. (4) Henry 11. Robertson and Sime (1822) . . II. (7) Hewat's Trustee -u. Smith (1892) . . 11. (2) Hills V. Buchanan (1786) II. (4) ; III. (7) Hog V. HamUton (1679) iii. (1) Hogg V. Armstrong and Mowat (1874) . . I. Hogarth v. Smart's Trustee (1882) . iii. (5) ii. Home 11. Atchison (1679) 11. (1) Inglis v. Port Eglinton Spinning Co. (1842) . iii. (7) Inglis V. Eoyal Bank (Cave's Case) (1736) II. (10) ; III. (7) Jaffray v. Carrick (1836) iii. (2) ii. Johnston uSprott (1814) II. (4) Jowitt V. Stead (1860) . m. (7) Ker V. Scott and Elliot (1695) . . .11. (4) Kerr v. Dundee Gas Co. (1861) Kinneil v. Menzies (1790) Lang V. Bruce (1832) . Laurie v. Black (1831) . Lees V. Dinwiddy (1707) Lesly V. Hunter (1752) . Levitt 11. eieasby (1823) Liddell's Trustee v. Warr and Co. (1893) . Louson V. Craik (1842) . Love V. Kempt's Creditors (1786) M 'Arthur v. Brown (1858) M'Bain v. Wallace and Co. (1881) . M 'Caul's Trustees v. Thomson (1883) II. (2) Macdonald v. Western (1888) Macdougall v. Whitelaw (1840) M 'Eachern v. Ewing and Co. (1824) M'Ewen and Co. 11. Smiths (1849) . M 'Gavin v. Sturrock's Trustee (1891) . M'Kay v. Forsyth (1758) Mackenzie v. Newall (1824) Maokinnon v. Max Nan- sen and Co. (1868) M'Leod and Co. v. Harrison (1880) . M'Meekin v. Koss (1876) M'Millan v. Price (1837) M'Naughton v. Baird and Co. (1852) . Main v. Maxwell (1710) . Marston v. Kerr's Trustee (1879) . Martinez y Gomez v. Allison (1890) . Mathieson v. Alison (1854) Maxwell and Co. i. Stevenson and Co. (1831) Melrose and Co. v. Hastie and Co. (1854) Miller v. Hutchison and Dixon (1881) Miller's Trustee v. Shield (1862) Milne v. Singer Manufac- turing Co. (1881) I II III IV •(1) I III IV :(3) ■(2) III III ■ (1) III ■(7)' II, ■W III. (8) ; II. (5) III. (5) i. III. (2) i. IV. (1) IV. (2) II. III. (2) (6) III. (1) IV. (1) IV. II. I III. (3) (2) i. II. IV. (4) (1) III. (5) i. III. (3) II. (4) III. (4) IV. (2) I. II. (8) III. (2)ii. APPENDIX II.— POSSESSION. 341 List of Cases in Appendix — ( Mitchell V. Gowans and Phin (1813) . . iv. (3) Mitchell V. Heys and Son (1894) . . . III. (3) Mitchell -y. Major (1856) in. (4) Mitchell's Trustees v. Gladstone (1894) . in. (2) i. Moore t). Gledden (1869) i. More V. Dudgeon and Brodie (1801) . . I. III. (4) Morton and Co. 11. Aber- cromby (1858) II. (10) ; IV. (1) ; IV. (4) Muir, Wood, and Co. V. Moore and Kidd (1876) . . . m. (3) Murdoch and Co., Ltd. 0. Greig (1889) . . ill. (5) ii. Neish V. Trompousky and Co. (1807) . . iv. (3) Nelmes and Co. v. Ewing (1883) . . .11. (3) Newall u Mitchell(1765) III. (7) North - Western Bank, Ltd. V. Poynter, Son, and Macdonalds (1894) III. (1) Orr's Trustee v. Tullis (1870) . . . III. (4) Pattison's Trustee v. Liston (1893) . . i. II. (4) Paul v. Cuthbertson (1840) I. Penson and Robertson Petitioners (1820) . II. (3) Platnauer Bros. v. Tosh (1892) . . . III. (7) Pochiu and Co. v. Robinows and Marjori- banks (1869) . . II. (9) Prince V. Pallat (1680) II. (10) ; IV. (4) Pringles».Gribton(1710) III. (3) Ramsay v. Wilson (1666) III. (3) Rhind's Trustee v. Robertson and Baxter (1891) . . _ . II. (4) Richmond v. RaUton (1854) . . .11. (10) Robertson and Aitken 11. More and Co. (1801) 111.(7); IV. (3) Robertson, Harvey, and Co. V. Adam's Creditors (1803) . . .IV. (2) Robertsons ■». M'Intyre (1882) . . . HI. (4) Robertson's Creditors v. Udnies and Patullo (1757) . . HI. (7) Ross and Duncan v. Bax- ter and Co. (1885) . i. Russell V. Campbell (1699) . . .11. (1) Salter v. Knox's Factor (1786) . . .11. (4) Sandeman and Co. v. Kempt's Creditors (1786) . . III. (7) Schuurmans and Sons v. Goldie (1828) . . ill. (7) Scot V. Fletcher (1865) . 11. (1) Scott V. Scott's Trustee (1889) III. (2) i. ; III (8) Seath and Co. v. Moore (1886) II. (4) ; IV. (2) Semple v. Givan (1672) . in. (3) Sharpe v. Smyth (1832) . n. (1) Shearer v. Christie (1842) n. (4) Sim V. Grant (1862) . n. (11) Simpson v. Duncanson's Creditors (1786) . in. (4) Singer Manufacturing Co. V. Docherty (1882) in. (2) ii. Smith V. Allan and Poynter (1859) . . iv. (2) Smith u. Flowerdew (1842) . _ . III. (2) i. Spence 11. Auchie, Ure, and Co. (1810) . • iv. (1) Spencer and Co. v. Dobie and Co. (1879) . . in. (4) Stein V. Hutchison (1810) . . . HI. (7) Stevenson v. Donaldson (1884) . . . III. (2) ii. Stewart v. Bell (1814) . II. (3) Stewart v. Fraser and Co. , etc. (1878) . . n. (11) Stiven v. Scott and Sim- son (1871) II. (4) ; ni. (6) Stoppel and Co. v. Stoddart(1850) ni. (7) ; iv. (3) Strachan -y. Knox and Co.'s Trustee (1817) n. (10) ; IV. (4) Sutherland v. Montrose ShipbuildingCo.(1860) in. (4) Taylor v. Jack (1821) II. (4) ; IV. (2) Taylor v. Ranken (1675) I. Thompson v. Elies (1675) II. (6) Tod and Co. 0. Rattray (1809) . . .IV. (1) Tod and Son -w. Merchant Banking Co. of Lon- don, Ltd. (1883) . II. (12) Todd V. Armour (1882) . in. (3) 342 SALE OF GOODS ACT 1893. List of Cases in Appendix- -continued. Turnbull v. Ker (1624) . II. (2) Wheeler and Wilson Co. Union Bank v. Mac- V. M'Ritchie (1884) . III. (2) ii. kenzie (1865) . III. (4) Wight V. Forman (1828) Ill, (5) ii. Vallance v. Scot (1531) . III. (6) Wilson V. Spankie Vickers v. Hertz (1871) (1813) II. (3) II. (9) : ; IV. (1) Wright V. Butchart Walker v. Irwin and Co. (1662) III. (3) (1841) . . . 11. (8) Wright ^.Mitchell (1871) Wallace, Gardyu, and II. (4) ; III. (6) Co. V. Miller (1766) . III. (7) Wyld and Co. v. Richard- Warrender u. Alexander son (1832) . II. (4) (1715) . . . III. (1) Wylie and Lochhead v. Watson V. Singer Manu- Mitchell (1870) . III. (4) facturing Co. (1884) . III. (2) ii. Wyper v. Harveys, &c. Watt V. Findlay and (1861) II. 1 (11) Hendrie (1846) . III. (7) Young V. Aktiebolaget Wanohope v. Gall and Ofverums Bruk (1890) i, . IV. (1) Ross (1805) II. (3) Young V. Loudoun (1855) in. (2) i. West Lothian Oil Co., Young V. Stein's Credi- Ltd. V. Mair (1892) . i. , IV. (1) tors (1789) . IV. (2) m. NOTES OX THE ENGLISH DOGTEINE OF CONSIDERA- TION AND THE HISTORY OF THE STATUTE OF FRAUDS.i L — The Doctrine of Consideeation. Consideration applies to what are known ia EngUsh law as "simple contracts," but these form a very wide class, embracing almost all contracts, whether written or verbal, except such as are constituted by a formal deed under seal. It is said to con- sist " either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsi- bility given, sufiered, or undertaken by the other. "^ This definition, however, is of little value apart from more detailed characteristics, which may be stated as follows : — 1. Adequacy of value is in no degree essential. — It was early settled that, no matter how trifling the value, be it a sheet of paper, a stick of sealing-wax, or a grain of com, it is sufficient to give efficacy to an obligation of any value or amount. " When a thing is to be done by the plain tifij be it ever so small, this is a sufficient consideration to ground an action." ' 2. No merely rrwral obligation has efecf as consideration. — This was fixed law as early as the end of the sixteenth century, though there are indications that earlier in that century the line between a moral and a legal obligation was not definitely marked.* As 1 These notes are extracted from two lectures delivered by the present author in Glasgow in October 1890 and October 1892 respectively. 2 Ctime V. Misa (1875), L.R. 10 Ex. 153 at p. 162. ' Sturlyn v. Albany (1586), 1 Croke 67. * Year-Book 20, Henry VII. (1505), fol. 11 ; Doctor and Student (1528), Dial. 2 ch. 24 ; Sharimgton v. Strotton (1566), 1 Plow. 298. 344 SALE OF GOODS ACT 1893. Doctrine OF Con- sideration. now settled the law holds that, although a person may be bound by the strongest natural ties to provide for the support of others, no engagement short of a covenant under seal will transform the moral obligation into a legal one.'' 3. Consideration may he present or future hut it must not he past. — A man may believe himself to be under obligation on account of past benefits received by him, but such sentiments of gratitude or friendship do not form a consideration in the eye of the law.^ Thus an agreement to pay £b to the plaintiff on his marriage in consideration that the plaintiff had delivered to the defendant twenty sheep, was held invalid as devoid of consideration.^ So also a promise to pay a certain amount in consideration that the plaintiff had on some former occasion voluntarily paid a similar amount to the defendant,* or a warranty of a horse in considerar tion that the plaintiff had hought it of the defendant at a certain price. ^ For the same reason a promissory note given as remun- eration for past services rendered without agreement for reward cannot be enforced.® In such cases if the promise founded on can be thrown back to the alleged consideration it will be valid but not otherwise.'^ 4. It is no consideration for a promise that the person receiving it has given a counter promise to do something which he is already umder legal obligation to perform. — Thus an agreement to give a debtor time in consideration of his paying the interest already stipulated is inoperative,^ but if additional security is offered it validates an agreement to accept even less interest. It was established by the case of Pinnel * in 1602, and affirmed by the House of Lords so recently as 1884,^" that if the day of payment of a debt has arrived, an agreement by the creditor to accept at the prope/r place of payment a smaller sum of money in full of the whole debt, is not binding, but if instead of money he agrees to accept at the place of payment a trifling article 1 Bret V. /. S. omd Wife (1600), 1 Croke 756. 2 Eastwood V. Kenyan (1840), 11 Ad. and El. 438. ' Jeremy v. Goochman (1596), 1 Croke 442. ^ Doggett v. Fowell (1602), Moore 643. ' Eoscorla v. Thomas (1842), 3 Q.B. 234. " Hulse V. Hulse (1856), 17 C.B. 711. ' Thorvion v. Jenym (1840), 1 M. & G. 166. 8 Orrm v. Gallmiay (1854), 9 Ex. 544. " 3 Coke 238. i» Foakes v. Beer (1884), 9 App. Ca. 605. APPENDIX III.— NOTES. 345 in satisfaction, or if he accepts a smaller sum of money at another Doctrine ;place, it will be binding. If the day of payment has not arrived gfcBRriio an agreement to accept part for the whole will be binding no matter where or how it is paid.^ By the law of Scotland consideration is not essential to contract. Adequacy of value may be an important element in questions of reduction on the ground of fraud or error, but, per se, considera- tion, whether nominal or valuable, is not taken into account.^ The Scottish law recognises the validity of unilateral obligations or promises where there is no counterpart or corresponding obliga- tion on the part of the recipient. Stair quotes the Bible, the civil law and the canon law, to show that " promises or naked pactions are morally obligatory by the law of nature," and that " there is nothing so congruous to human trust as to perform what is agreed among men." ^ Erskine says, " The obvious reason why all verbal agreements and promises must be obligatory in every nation where no special exception is made by positive institu- tion, is that by a common rule of law every agreement in a lawful matter, though constituted only verbally, induces a full or proper obligation."* II. — The History of the Statute of Frauds. (29 Car. II. c. 3.) The Statute of Frauds was passed in 1677 in the 29th year of the reign of Charles II. It is a purely English statute, but nearly twenty years later its principal provisions were enacted for Ireland.^ It is in force in most of the British colonies and generally throughout the United States, but no other country has any similar statutory provision. It is' entitled "An Act for ^ "According to the English common law a creditor may accept anything in satisfaction of his debt except a less amount of money. He may take a horse, or a canary, or a tomtit if he chooses, and that is accord and satisfac- tion; but by a most extraordinary peculiarity of the English common law the creditor cannot take nineteen shillings and sixpence in the pound ; if he does so it is nudum pactum {i.e. an agreement without any binding force). Therefore, although the creditor may take a canary, yet if the debtor did not give him a canary together with his nineteen shillings and sixpence, there was no accord and satisfaction. This is one of the mysteries of English common law." — Sir George Jessel. 2 Law V. Sumphrey (1874), 3 Ret. 1192. 3 Stair's Inst. i. 10. 10. " Ersk. Inst. iii. 2. 1. ' Irish statutes, 1695, 7 Wm. III. c. 12, 346 SALE OF GOODS ACT 1893. STATtiTB OF the Prevention of Frauds and Perjuries," and, speaking gener- EAUDs. ^2jy^ ^j^jg object is sought to be accomplished by rendering writing essential in wills and in contracts affecting real estate, contracts of guarantee, and contracts for the sale of goods of the value of £10. or upwards. Until the publication in 1884: of the ninth Eeport of the Eoyal Commission on Historical Manuscripts very little was known of the authorship of the statute or of the circumstances under which it was enacted. But conjectures were early set afloat. Roger North in the life of his brother, Chief-Justice Francis North (afterwards Lord-Keeper Guilford), tells us that the Chief-Justice had a great hand in the framing of this statute, but that "at that time the Lord Chief- Justice Hales had the pre-eminence, and was chief in the fixing that law."^ So far as the biographer's brother is concerned, the discoveries of the last decade have proved that Roger North was nearer the truth than he had any reasonable ground to suppose, for, in accordance with his habit, the suggestion was hazarded upon a very slender basis of fact. The statement as to Chief-Justice Hale had no foundation whatever, yet it illustrates the tenacity of error that the suggestion of Roger North formed for two centuries the leading idea connected with the authorship of the Statute of Frauds. In the case of Windham v. Chetwynd,^ in 1757, Lord Mansfield, in the course of the argument, expressed doubts "of that gener- ally received opinion that Lord Hale drew the statute," he having died in the year preceding its passing into law.^ In 1 Ed. 1742, i. 408 ; ed. 1826, i. 223. The whole passage is as follows :— "He had a great hand in the Statute of Frauds and Perjuries, of which the Lord Nottingham said that every line was worth a subsidy. But at that time the Lord Chief-Justice Hales had the pre-eminence, and was chief in the fixing that law : although the urging part lay upon him " {i.e. upon North, C. J.), "and I have reason to think it had the first spring from his lordship's motion. For I find in some notes of his, and hints of amendments in the law, every one of those points which were there taken care of ; and divers other matters which he set his mark upon, have since been regulated by Acts of Parliament express." ^ Burrow, p. 414 ; W. Blackstone, p. 95. ^ The draft, however, was substantially in the form of the Act nearly two years before the death of Sir Matthew Hale, which took place 25th December 1676. Lord Mansfield's words, as reported, are as follows: — "It has been said that this Act of 29 Car. II. c. 3, was drawn by Lord Chief- Justice Hale, but this is scarcely probable. It was not passed till after his death, and it was APPENDIX III.— NOTES. 347 delivering judgment in the same case, Lord Mansfield said, Statute "I can never conceive, for the reasons I formerly mentioned, '^^'^'^^■ that this statute was drawn by Lord Hale, any farther than by perhaps leaving some loose notes behind him, which were after- wards unskilfully digested."^ Lord Mansfield seems to have based his opinion upon internal evidence. He had not a high opinion of the statute, and refused to associate an eminent name with its construction.^ Nearly fifty years later, in the leading case of Wain v. JVarlters^ (1804), Lord Ellenborough inverted this process of reasoning, and argued that, because Lord Hale drafted the statute, every word should have its proper legal effect. " Lord Hale," he says, " one of the greatest judges who ever sat in Westminster Hall, was as competent to express, as he was able to conceive, the provisions best calculated for carrying into effect the purposes of that law." * This case is remarkable as establishing not only that a guarantee must be in writing and must have "consideration" in the English sense, but, further, that this " consideration " must be expressed in the writing itself. Apart from any restrictions upon contract due to the operation of the Statute of Frauds, it enforced the Doctrine of Considera- tion in a form intolerable to commerce, and led to the provision of the English Mercantile Law Amendment Act of 1856, by which partial relief was given. ^ Lord Ellenborough's decision, brought in in the common way ; and not upon any reference to the judges " (1 Burr. 419). This last statement we now know to be incorrect. The bill was referred to the judges at a very early stage, and was entirely re-drafted by Chief-Justice North. ' W. Blackstone, pp. 98, 99. ^ Lord Mansfield goes on to say: — "There have perpetual doubts arisen upon every clause of this statute, not only among the unlearned, for whom it ought to have been calculated, but even among the learned also. ... In theory it seemed a strong guard [against fraud] ; in practice it may be some guard. But I believe more fair wills have been destroyed for want of observ- ing its restrictions than fraudulent wills obstructed by its caution. In all my experience at the court of delegates I never knew a fraudulent will but what was legally attested ; and I have heard the same from many learned civilians. Courts of justice ought, therefore, to lean rather against than in support of any too rigid formalities." — W. Blackstone, pp. 99, 100. ^ 5 East 10. * 5 East at p. 16. * 19 & 20 Vict. c. 97, Sect. 3. The relieving section is as follows :— "No special promise to be made by any person after the passing of this Act to answer for the debt, default, or miscarriage of another person, being in writing, and signed by the party to be charged therewith, or some other person by him thereunto lawfully authorised, shall be deemed invalid to support an action, suit, or other proceeding to charge the person by whom 348 SALE OF GOODS ACT 1893. Statute of so far as founded on Lord Hale's authority, was due to misappre- Feauds. hension, and forms a curious instance of the random conjecture of a biographer influencing prejudicially the commerce of a great commercial nation for more than half a century. No further light was thrown upon the authorship of the Statute of Frauds till 1823, when Mr. Swanston obtained from Lord Eldon the MSS. of Lord Nottingham. From this material he reported, among other old cases, that of Ash v. ^M?/,^ decided by Lord Nottingham in 1678 — the year immediately succeeding the passing of the statute. In giving judgment in that case Lord Nottingham said regarding the Statute of Frauds that " he had some reason for knowing the meaning of this law ; for it had its first rise from me who brought in the bill into the Lords' House, though it afterwards received some additions and im- provements from the judges and the civilians." None of the previous conjectures had pointed to Lord Nottingham. Eoger North was a contemporary, yet he suggests Sir Matthew Hale in conjunction with Chief-Justice North as the author, and only mentions Nottingham to report a saying, now intimately associ- ated with his name, as to every line of the statute being worth a subsidy.^ Lord Mansfield was married to Nottingham's grand- daughter,^ yet it is evident from his judgment in Windham's case that he was unable to originate any suggestion in regard to the authorship. But after 1823 the question was deemed con- clusively settled. Lord Campbell, in his life of Nottingham, published in 1845, tells us that "it is now ascertained that Lord Nottingham was the author of the most important and most beneficial piece of juridical legislation of which we can boast — the famous Statute of Frauds — the glory of which was long such promise shall have been made, by reason only that the consideration for such promise does not appear in writing, or by necessary inference from a written document." It must be kept in view that "consideration" is still necessary to the validity of an English contract of guarantee, although it does not now require to be stated in the writing itself. ' 3 Swanston 664. ^ "If Lord Nottingham was justified, while speaking with parental pride of the principle of the measure, in declaring that it was an Act every line of which was worth a subsidy, the present generation, who can contemplate the almost endless litigation which its ambiguous language has caused, may add, with more truth if not with more sincerity, that every line of it has cost a subsidy." — Taylor on Evidence, 8th ed. p. 863. ^ Campbell's Lives of the Chief-Justices, ii. 345. APPENDIX III.— NOTES. 349 divided between Lord Hale and Sir Leoline Jenkins."^ He Statute further suggests that these two may have been among the ■^"^^"^■ "judges and civilians" who, according to Nottingham, assisted in making improvements. The year 1884 marks the final stage in the elucidation of the history of the statute. The researches among the papers of the House of Lords, made by authority of the Historical Manuscripts Commission, resulted in the discovery of the original draft of the statute, the text of which is now to be found in the Commis- sioners' ninth Eeport, with memoranda as to the various amend- ments, and notes as to handwriting.^ From this Report we also gather a fairly complete record of the progress of the measure. Its first appearance was in the House of Lords on 16th February 1673 (o.S.), when it reached the Committee stage, but dropped with the session. The Commissioners tell us that " the draft is apparently in the careful handwriting of Lord-Keeper Finch " (afterwards Earl of Nottingham), and that " the corrections upon it are undoubtedly in his hand." ^ The draft, recopied, was again introduced on 14th April 1675, which, allowing for the difference between old and new style, was fourteen months after its original introduction.* After very material alterations in Committee it passed on this occasion through the House of Lords, but on being sent to the Commons further progress was again barred by the close of the session. The bill, as now altered, was introduced into the House of Lords for the third time in October 1675, but was dropped in Committee. After an interval of fourteen months it was brought into the House for the fourth time in February 1676 (o.S.), and in the course of two months thereafter it passed through both Houses without material alteration, receiv- ing the Eoyal Assent on 16th April 1677.^ On the question of authorship it is important to notice the proceedings in Committee on the first occasion on which the bill ^ Campbell's Lives of the Chancellors, iii. 418. 2 Ninth Eeport (1884), part ii. pp. 45, 48, 49, 66, and 69. '^ Ninth Eeport, part ii. p. 45. * Before 1752 the legal year oommenoed on 25th March, but in that year and afterwards it was changed by statute to 1st January (24 Geo. II. o. 23, Sect. 1). Under the old style, April was in a different year from the Feb- ruary which immediately preceded it. ' Some text books give the date as 1676, overlooking the fact that a new year had been entered upon on 25th March preceding. 350 SALE OF GOODS ACT 1893. passed through the House of Lords. The preamble of Notting- ham's draft having been agreed to, the Committee desired the attendance of the judges, whom they wished to consult as to the nature of the writing to be required, and the precise effect of certain technical expressions. It was at this stage that Chief- Justice North intervened, and became practically responsible for the whole text of the measure. Taking the statute as passed we find that Nottingham's draft did not extend beyond the 10th section, and that the 4th section, which is now the only one of importance in this part of the Act, was almost entirely re-drafted by North. The Chief-Justice seems also to have framed Sects. 11 to 18, and Sects. 24 and 25. The substance of Sects. 19 to 23, regarding nuncupative wUls, was suggested by Sir Leoline Jenkins, judge of the Prerogative Court, but the articles presented by Sir Leoline were ordered " to be drawn into enacting clauses by the judges,'' and this also was done by the Chief -Justice.^ It was in the shape in which the bill left the Committee on this occasion that it ultimately passed into law. Lord Nottingham's draft may be contrasted with the 4th and ITttf sections of the statute as follows : — Draft. Statute. "And be it further enacted by the Sect. 4. — And be it fui'ther enacted authority aforesaid that, in all actions by the authority aforesaid that from upon the case, actions of debt, or and after the said four and twentieth other personal actions, which from day of June (1677) no action shall be and after the day brought whereby to charge any ex- of shall be commenced ecutor or administrator upon any upon any assumpsit, promise, con- special promise to answer damages tract, or agreement made or supposed out of his own estate, or whereby to to be made by parole, and whereof charge the defendant upon any special no memorandum, note, or memorial promise to answer for the debt, de- in writing shall be taken by the fault, or miscarriage of another person, direction of the parties thereunto, or to charge any person upon any no greater damages shall at any time agreement made upon consideration be recovered than the sum of of marriage or upon any contract or ' Ninth Report, part ii. p. 49. ' In accepting the aid of the revised edition of the statutes, it must be kept in view that the sections of the Statute of Frauds are now differently numbered. Sect. 13, as it appears in the Statutes at Large (1763), was a mere preamble to the following section, and for this reason it was incorporated with that section in the revised edition of 1870. The numbers of all the sections following the 12th are therefore changed. The 17th section, which was of special importance as affecting the sale of goods, is officially cited as the 16th, and as such it was repealed by the Sale of Goods Act, Sect. 60, and relative Schedule araie, p. 290. APPENDIX III.— NOTES. 351 Draft — cmMnuecl. any law or usage to the conti'ary notwithstanding. Provided that this Act shall not extend to such actions or suits, which shall or may be grounded upon contracts or agree- ments for wares sold, or money lent, or upon any quantum meruit, or any other assumpsits, or promises wMch are created by the construc- tion or operation of law : But that all and every such actions shall and may be sued and prosecuted in such manner as the same might have been before the making of this Act, any- thing hereinbefore to the contrary notwithstanding." — {Kinth Beport of Hist. Maniu. Ciym., part ii. p. 48.) Statute — amtinued, sale of lands, tenements, or heredita- ments, or any interest in or concern- ing them, or upon any agreement that is not to be performed within the space of one year from the mak- ing thereof 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 person thereunto by him lawfully authorised. Sect. 17. 1 — And be it fm1;her enacted by the authority aforesaid that from and after the said four and twentieth day of June (1677) no contract for the sale of any goods, wares, or merchandises for the price of ten pounds sterling or upwards shall be allowed to be good except the buyer shall accept part of the goods so sold, and actually receive the same or give something in earnest to bind the bargain or in part of payment, or that some note or mem- orandum in writing of the said bargain be made and signed by the parties to be charged by such contract or their agents thereunto lawfully authorised. Statote Frauds. It thus appears that Chief-Justice North (Lord Guilford) is responsible for the drafting of the Statute of Frauds, and that, beyond the original conception of rendering writing a legal essential in particular circumstances, the share of Lord Notting- ham in the work was comparatively small. Nottingham's original proposal seems to have been to limit to a certain specified amount the damages to be recovered for breach of a " simple contract " {i.e. a contract not established by deed under seal) unless a written memorandum of the bargain had been previously agreed upon between the parties.^ He did not suggest signature as a requirement, his only object being to secure that each party was dealing with the same subject-matter. The fact of the agreement might still be proved parole, but it was supposed to take away any temptation to perjury if the terms of the bargain were put ^ See footnote previous page. ^ Simple contracts, even where writing is required for their proof, are still called verbal contracts, as distinguished from contracts of record, and contracts by deed under seal. 352 SALE OF GOODS ACT 1893. into definite written language. It is further to be observed that Lord Nottingham's proposal expressly excluded the contract of sale, which was still to remain as free as before. But the sugges- tions of Chief-Justice North, which are now the law of England,'' were very different in their character. The Act, as framed by him, provides that the memorandum must be signed, and, so far from sale being excluded from the operation of the statute, it is made the special subject of the 17th section, which has been the cause of enormous litigation, and is now almost universally con- demned. Without venturing to assert that Lord Nottingham's proposal was in every respect satisfactory, it may at least be claimed for its author that he embodied a philosophical concep- tion without the serious blemish which has caused the 17th section ^ of the statute to be practically ignored in every large commercial centre.^ The foregoing facts clear away the mists so long surrounding the history and authorship of the Statute of Frauds. From first to last there is not the slightest trace of the draftsmanship, or even of the influence, of Lord Hale, and it may be suggested to the text writers who still associate his name with its construction that in future editions such passages should be revised.* 1 Although the 17th (16th) section of the Statute of Frauds is now repealed by the Sale of Goods Act, its substance is re-enacted by Sect 4 of that Act. See antR, p. 27. ^ Now Sect. 4 of the Sale of Goods Act. ^ The result is in accordance with the character of the respective drafts- men. Lord Campbell's estimate was formed without reference to the Statute of Frauds, and without knowing anything of Chief-Justice North's share in this particular work, yet he thus describes the general character of the two men. Of Chief-Justice North (Lord-Keeper Guilford) he says: "He was sharp and shrewd, but of no imagination, of no depth, of no grasp of intellect, any more than generosity of sentiment. Cunning, industry, and opportunity may make such a man at any time. A Nottingham does not arise above once in a century. Guilford had as much law as he could contain, but he was incapable of taking an enlarged and commanding view of any subject." — Imss of the Gharwdlma, iii. 489. * See, for example, the following : — " Statute of Frauds. — This famous statute is said to have been framed by Sir Matthew Hale, Lord-Keeper Guil- ford, and Sir Leoline Jenkins, an eminent civilian. Lord Nottingham used to say of it that every line was worth a subsidy, and it has been said that at all events the explanation of every line has cost a subsidy, no statute having been the subject of so much litigation." — Wharton's Law Lexicon, 9th ed. 1892. " This celebrated statute we owe to the great lawyer, but in- different statesman, Lord Nottingham, who appears to have been assisted in framing it by Sir Leoline Jenkins and Lord Hale. "—Taylor on Evidmce, 8th ed. (1885), p. 853. GENEEAL INDEX. "ABOUT," as denoting quantity, 145. ABSOLUTE, sale may be absolute or conditional, 1. meaning of absolute property in goods, 5. "property" means absolute or general property, 287. ACCEPTANCE, under Sect. 4 (substituted for Statute of Frauds), 25, 169. differs from acceptance under contract, 26, 167, 169. of bill of exchange, 98. duty of buyer to accept, 129, 176. where notice of place of, required, 130. if buyer accepts wrong quantity must pay at contract rate, 140. testing by buyer does not necessarily infer, 141j 168. of wrong quantity is new contract, 141. buyer to have opportunity of examining goods prior to, 166. what acceptance implies, 167. differs from receipt, 167, 169. circumstances inferring, or negative of acceptance, 168, 170. three modes of, 168. negation of duty of, equals right of rejection, 171. in England precludes subsequent return of goods, 171. in Scotland not inconsistent with subsequent return of goods, 171. distinction theoretical rather than real, 171. where rightly refused buyer not bound to return goods, 172. ACKNOWLEDGEMENT, by carrier to buyer of custody on his behalf ends transit, 209. ACTION, defined, 283. in England for goods "sold and delivered," 192. for price, 234. * conditions under which, may be maintained, 234. where competent for price though property has not passed, 234. seller's rights of, where property has passed, 238. 2 A 354 SALE OF GOODS ACT 1893. KCTIO^— continued. seller's rights of, where property has not passed, 238. form of, in respect of rejection in Scotland same as for non- delivery in England, 242. any right, duty, or liability declared by Act may be enforced by, 262. includes condescendence and claim and compensation in Scot- land, 283. ACTIO QUANTI MINORIS, English form of, introduced into Scotland, 50. former application of, to Scotland, 52. ACTIO BEDHIBITORIA, buyer's right in Scotland to reject goods and rescind contract, 52. ACTUAL RECEIPT. See Receipt. AGENT. See Principal and Agent. AGREEMENT TO SELL, defined, 1. distinguished from sale, 1, 2, 4. when, becomes sale, 2. goods perishing after agreement, 34. at a valuation, 41, 42. included in contract of sale, 284. ALIEN ENEMY, may bind himself by contract, 9. but cannot sue during war, 9. dividend for, in bankruptcy, 9. ALTERATIONS IN LAW. See Changes in Law. APPARENT OWNER. See Owner. APPOINTED DESTINATION, arrival at, ends transit, 209. transit continues until arrival at, 218. though away from and not towards buyer, 218. APPROPRIATION, of goods to contract, 87. delivery to buyer or to carrier is, 87. goods may be appropriated without delivery, 95. as applied to shipbuilding contract's, 96, 135. APPROVAL (SALE ON), when property passes in contract of, 47, 84, 86. no sale if condition not fulfilled, 84. "reasonable time" applies to, 86, 89. condition suspensive rather than resolutive, 94. GEXERAL IXDEX. 355 ARBITRATION. .