The Rule as to Losses. The usual rule in sales is that the risk of loss follows the title to the goods, and in some states. that rule is applied to conditional sales and in case of destruction of the goods the loss falls on the vendor. However, in most states the courts hold that the loss falls on the vendee, because he is in possession of the goods and has exclusive control of them.

QUESTIONS

1. Give an example of an installment sale.

2. Under what conditions does the title pass to the purchaser in an installment sale?

3. (a) Has the purchaser of goods on the installment plan a right to sell them? (b) Can he give a good title to the goods?

4. Can a merchant who has purchased goods on credit sell them and transfer a good title?

5. Wherein do conditions differ in questions 3 and 4?

6. Why is it important to require that conditional contracts be filed? 7. Give an example of a sale where there is a change of possession of the goods without a change of title.

8. What is a chattel mortgage? What purpose does it serve?

9. What right has the mortgagee in case the mortgagor fails to pay the debt?

10. Who is responsible if the property is destroyed before payments are completed?

II. Mention some particulars in which laws on conditional sales differ.

Classification.

6. WARRANTIES

We have seen that a condition in a contract of sale which is required to be performed before the contract is completed will defeat the sale if it is not carried out. Aside from this there are certain warranties which are collateral undertakings on the part of the seller to be responsible in damages if certain conditions as to quality, amount, or title of the article are not as represented. The warranty is a separate contract, and, if made at a different time from the contract of sale, it must be supported by a separate consideration. If made at the same time, the consideration of the sale will also operate as a consideration for the warranty.

Mrs. Green purchased a coat for which she paid a good price. A friend of hers told her it would fade, and she took it back to the merchant, who

warranted the coat not to change color. The merchant is not bound by this warranty, as it was made after the sale, and there was no consideration.

Had the merchant warranted the coat not to fade at the time the sale was made, the consideration of the sale would have been consideration for the warranty.

There are two classes of warranty, express and implied.

Express Warranty. The express warranty, as its title would indicate, is an express undertaking or agreement made by the seller. No special form of words is necessary to create a warranty. Any statement framed with the intention of making a warranty will be so construed. It must be distinguished from a mere expression of opinion on points regarding the chattel, of which the seller has no special knowledge and on which the buyer may be expected to exercise his own judgment. A warranty is an assertion of a fact of which the buyer is ignorant.

The vendor, in selling a patent right in a ditching machine, exhibited the letters patent and the model and stated that if properly constructed it would work well. It was claimed that it was properly constructed and did not work well. It was not shown that the vendor had ever made and used a machine constructed after this model or that he represented that he had made and used one. The court held that the statements were nothing more than mere expressions of opinion, which did not amount to a warranty. Hunter v. McLaughlin, 43 Ind. 38.

It was held that a statement by a piano agent that the instrument is "well made and will stand up to concert pitch" is a warranty, it being a representation of fact. - Stroud v. Pierce, 6 Allen (Mass.) 413.

If the representation is a warranty, the contract will not be broken if the representation is untrue, but an action for damages will arise. If it is a mere expression of opinion, there is no remedy if it turns out to be unfounded.

A general warranty is held not to include defects apparent on simple inspection and requiring no skill to discover them, nor defects known to the buyer.

Morey sold Dean a horse that was a cribber. Held, that he was not bound to disclose this fact to Dean, as the horse was subject to the inspection of the buyer, and a simple examination of the horse's mouth would have shown the defect. ·Dean v. Morey, 33 Iowa 120.

Implied Warranty.— Implied warranty differs from express warranty in that although it exists in the contract of sale, it is not mentioned or stated in express words. In every contract of sale there is an implied warranty that the seller has the right

SALES OF PERSONAL PROPERTY

to sell the goods, or will have such right when title is to pass. At common law this warranty of title was not implied when the seller was not in possession of the goods sold, but the Uniform Sales Act seems to have altered the common law in this respect.

Nevels sued the Kentucky Lumber Co. for damages for refusal to accept certain logs he sold to them. Nevels had bought all the poplar timber on a tract, but it appeared that he had bought from a man who owned only an undivided one-fourth of the tract, and so he did not have a good title to the logs. It was held that there was a breach of implied warranty of title and the Kentucky Lumber Co. was justified in refusing the logs. Nevels v. Kentucky Lumber Co., 108 Ky. 550.

As to the implied warranty of quality, we find the maxim, caveat emptor, meaning "Let the buyer beware," to be the general rule of law. When there has been a sale of specific goods which the buyer has an opportunity to inspect, he buys at his own risk as to quality, unless there is an express warranty. There is no implied warranty of the quality. The vendor is under no obligation to communicate the existence of even latent defects in his wares unless, by act or implication, he represents that such defects do not exist.

Harvey sold Frazier some hogs which, unknown to both parties, had a disease of which they died later. Action was brought on the implied warranty of soundness of the hogs. Held, that when there is no express warranty and no fraud in the sale of personal property, the purchaser takes the risk of its quality and condition. Frazier v. Harvey, 34 Conn. 469.

But when the chattel is to be made or supplied to the order of the purchaser, there is an implied warranty that it is reasonably fit for the purpose intended, if that purpose is communicated to the seller.

Held, that the vendor of a patent churn, being himself the manufacturer, and contracting to furnish the purchaser with a quantity of churns, must be held to have warranted that they were useful and reasonably suitable for the intended purpose; and if they proved to be worthless, there would be a breach of the implied warranty which would be a good defense against an action for the purchase price. — Tabor v. Peters, 74 Ala. 90.

If the sale is by sample, there is an implied warranty that the quality of the bulk is equal to that of the sample.

Myer sold Wheeler 10 carloads of barley like sample, to be delivered from time to time. Wheeler had never seen the barley. Held, that there was a warranty that the barley would be equal to the sample.

Myer v. Wheeler, 65 Iowa 390.

To constitute a sale by sample it must appear that the contract of the parties was made solely with reference to the sample exhibited.

The court held that the sale of an article which was represented to be five per cent better than the sample shown was not a sale by sample. Day v. Raguet, 14 Minn. 273.

In a sale by description there is an implied warranty that the goods shall be salable, aside from the fact that a condition precedent to the sale is that the goods shall answer the description. In such a case, the buyer having no opportunity to inspect the goods, the rule of caveat emptor does not apply, and the buyer has a right to expect that he is getting a salable article answering the description in the contract, and not an article that is worthless.

Weiger sold Gould oats and represented them to be a good grade of white oats, such as he was purchasing at forty cents. Held, that Weiger must deliver salable oats and cannot deliver wet, dirty oats.

- Weiger v. Gould, 86 Ill. 180.

When a person buys of a manufacturer an article made for a particular purpose, there is an implied warranty that it is fit for the desired purpose, also that it is free from latent defects, arising from the process of manufacture and unknown to the purchaser, which render it unfit for the purpose intended.

Niles agreed with Rodgers that he would deliver to him at a future time three steam boilers with which to run the engines in his roller mill. Held, that there was an implied warranty that the boilers should be free from all such defects in material or workmanship, either latent or otherwise, as would render them unfit for the usual purposes of such boilers. Rodgers v. Niles, 11 Ohio State 48.

Conditions. -The two kinds of conditions are "pure condition" and "promissory condition." A pure condition is one over which neither party has any control. For example, a contract is made to manufacture trolley cars if a certain franchise or right of way is secured, or a contract is made to buy goods "on arrival." The parties to the contract would not be bound unless the conditions are carried out. The franchise may not be secured, or the goods may never arrive.

A promissory condition in a sales contract is a statement to

the effect that the goods will answer a certain description, or that they will be ready for delivery on a certain date.

Where the Uniform Sales Act applies, the promissory conditions only are treated as warranties.

SECTION ON IMPLIED WARRANTY FROM UNIFORM
SALES ACT

IMPLIED WARRANTIES OF TITLE. In a contract to sell or in a sale, unless a contrary intention appears, there are

1. An implied warranty on the part of the seller that in case of a sale he has a right to sell the goods, and that in case of a contract 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 as against any lawful claims existing at the time of the sale;

3. An implied warranty that the goods shall be free at the time of the sale from any charge or encumbrance in favor of any third person, not declared or known to the buyer before or at the time when the contract or sale is made.

4. This section shall not, however, be held to render liable a sheriff, auctioneer, mortgagee, or other person professing to sell by virtue of authority in fact or law goods in which a third person has a legal or equitable interest.

IMPLIED WARRANTY IN SALE BY DESCRIPTION. When there is a contract to sell or a sale of goods by description, there is an implied warranty that the goods shall correspond with the description, and if the contract or 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.

IMPLIED WARRANTIES OF QUALITY. Subject to the provisions of this act, of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract to sell or a sale, except in the following paragraphs 1, 2, 5, and 6.

1. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose.

2. Where the goods are bought by description from a seller who deals in goods of that description (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be of merchantable quality.