REVIEW QUESTIONS

1. Distinguish sale and barter. Distinguish between a sale and a contract to sell.

2. Why is it important to know whether a particular contract is an executed or an executory sale?

3. Why are uniform sales laws desirable? Has the Uniform Sales Act been adopted in your state?

4.

Can there be an executed sale of articles not in existence? 5. When a seller ostensibly makes a present sale of goods which are not then in existence, what is the effect on the contract? 6. If goods sold are partly destroyed at time of sale, what right has the buyer?

7. If the sale had been executed before the damage happened, what would be the rights of the parties?

8.

Give meaning and legal effect of a sale to arrive.

9.

B made sales, without a license, of kerosene and liquor. Can these accounts be enforced against the customers?

10. A, a retailer, bought goods of B with the understanding that unsold goods would be taken back at the end of the season. Fire destroyed the goods without fault of A, while in A's possession. Who bears the loss?

CHAPTER XVI

PASSING TITLE

§ 91. Delivery

In a sale-not a contract of sale (see § 81)—the delivery is made at the time, and there is no question in regard to the passing of title from seller to purchaser. The delivery may consist in merely setting aside the goods for the new owner, but the title passes, and, if the goods are afterwards destroyed, the loss is the purchaser's. In one case delivery consisted in giving the purchaser the key to the building where some machinery was stored.1

A flood or a railroad accident which delays the delivery of goods is not an excuse for failure to perform a positive contract. It is a general rule that, where an engagement to do a certain thing is positive in its terms, an accident, or change of conditions, will not excuse performance. The Japanese, it is said, look at this matter exactly the other way, and say that if conditions change after a contract has been made it would be unjust to compel performance.

§ 92. Selection Necessary to Delivery

It is impossible to transfer the ownership of goods that have not been identified or set aside. A contract to sell an automobile of a certain make does not transfer the title to any automobile until a particular automobile has been designated as the subject matter of the contract. The precise article or articles that are to constitute the subject matter of the sale must be agreed upon. This means that the subject

1 Kellogg Newspaper Co. v. Peterson, 163 Ill. 158.

matter of the sale must have been selected. Usually the selection is made by the buyer, but in some cases the buyer directly or indirectly authorizes the seller to make the selection for him.

In the case mentioned in heading 4 under § 87, where there is the sale of an undivided interest in goods, no actual delivery or selection is necessary. By the sale, the purchaser acquires whatever the seller's rights were in the whole. If the seller had the right to have his share taken out of the mass, the buyer would have the same right; if the seller had a right to a proportionate share only in the price received when the goods were sold, the buyer would get only the same right. The time, present or future, when the title will pass depends on the agreement.

In a contract to sell, the time for the title to pass depends on the contract; if the intention of the parties is clearly expressed, it passes at the time they have fixed upon. The rules given in the next section will determine when it passes in case the intention is not clearly expressed.

Note:

I. Any act which the parties intend to represent delivery of the goods will be a sufficient delivery.

If a suit of clothes has been selected and set aside for the purchaser, it becomes at once his property.

$93. When the Title Passes

The following are rules for determining the intentions of the parties as to the time at which the title passes, i.e., at which the buyer becomes the owner:

I. Where goods are picked out and are in the shape in which they are to be delivered at the time the contract is made, the buyer becomes the owner at that time.

2. When the goods have to be picked out, or something

further remains to be done to them before they can be delivered, the buyer does not become the owner until that is done.

3. When a contract is made to sell a certain number, weight, or measure of goods, or goods to be acquired in the future by the seller, the buyer becomes the owner after goods answering the description in the contract are turned over to him, or he takes possession of them.

4. (a) When goods are delivered "on trial," or "on approval," the buyer becomes the owner upon their delivery. He may, however, cease to be the owner and make the seller again their owner by returning them or notifying the seller within the time specified in the contract, or a reasonable time if none was specified, that he will not accept them. (b) When the buyer lets the time fixed for the return of the goods pass without returning them, or keeps them beyond what is a reasonable time under the circumstances, or signifies his approval and his intention to keep them either by words or acts, he becomes their permanent owner.

5. If the agreement requires delivery to the buyer at a

particular place, or payment of freight to the buyer or to a particular place, the title does not pass until the goods have reached the buyer or the place agreed upon.

6. When goods are to be manufactured the title does not pass until they are completed and delivered

to or accepted by the party who ordered them. 7. If goods are ordered and shipping directions are given, delivery is made when the goods are delivered to the railroad or other means of transport. After that they are the property of the buyer.

Note:

I. A contract to sell should specify precisely when title to the goods is to pass.

§ 94. Sales Without Delivery

Whether or not there has been a legal delivery such as described in § 91, it is always a risk to leave property in the seller's possession. In those states where the Uniform Sales Act has been adopted, the law makes a seller who has the goods left in his possession the agent of the buyer to sell, pledge, or otherwise dispose of them. The very fact that the property is in the possession of the seller is likely to mislead innocent third parties who have no notice of the sale. If the seller was dishonest enough to sell the property again, there would be no chance of recovering it from any third party to whom he sold or pledged it. This is likewise the case in California, Colorado, Kentucky, Maine, Montana, Oklahoma, South Dakota, Vermont, and Washington. The laws in the states enumerated above regard leaving the property with the seller as opportunity for fraud on other persons; hence the party who so left the property must lose, if the goods are sold to an innocent buyer. This is just, as, if a man has property in his possession it is fair to assume that it is his, and if he sells it again, the new buyer should be protected.

In other states, the court will presume that leaving the property with the seller amounts to a fraud, but the first buyer may prove that the sale to himself was a real one, made in good faith, and not a mere sham for the purpose of cheating anyone, and in this way may recover his property. If it can be shown in any case that there was no real sale, but only a pretended one, a creditor of the seller may treat the goods left with the seller as belonging to the latter and levy on them in payment of his claim.