who acted upon the strength of such apparent ownership will bind the true owner, if the person having possession is one who from the nature of his employment might ordinarily be taken to have the right to sell.

Roberts, a truckman, hired a truck from Bartow for one year. The agreement was that Roberts should be allowed to paint his name on the truck and use it as his own. During the year Roberts sold his business and entire equipment including the hired truck to Darrow. As the owner of the truck in question allowed Roberts to paint his name on the truck and to hold himself out as the owner, the purchaser got a good title and Bartow cannot demand the return of the truck. Roberts will have to settle with Bartow.

As we have learned in contracts the purchaser must be a party competent to contract except in the case of necessaries.

QUESTIONS

1. What are the parties to a sale called?

2. Who has a right to offer an article for sale?

3. Under what conditions can a buyer get a better title to goods than the seller has?

4. To whom do stolen goods belong, regardless of who has bought them?

5. Can the finder of lost property transfer a good title to it?
6. Who is a pledgee?

7. Under what conditions has a pledgee a right to sell pledged goods? 8. When has the master of a vessel a right to sell the cargo or any portion of it? Does the purchaser get a good title?

9. Who is a factor?

10. Has a factor a right to sell goods consigned to him and accept a note in payment from the buyer?

II. Under what conditions can a factor give a good title to goods consigned to him to sell?

3. THE CONTRACT OF SALE

Sales Contracts. In the contract to sell the title has not passed to the purchaser. It is simply an agreement to make a transfer at some future time. In the sale the title has passed and the sale is complete. At the time of the sale the subject matter or thing sold must be in existence. If it has ceased to exist, the sale is void. That is, if the agreement is to sell certain

goods, which have been destroyed without the knowledge of the seller at the time the agreement is made, the agreement is void, as the subject matter of the sale had ceased to exist before the contract of sale was entered into. Similarly if there is a contract to sell certain goods, and they are destroyed without the fault of either party before the title passes to the buyer, the contract is avoided.

Norton sold 621 bales of cotton, marked and numbered as specified in the contract, at a certain price. After Norton had delivered 460 bales the remaining 161 bales were destroyed by fire. In an action for damages the court held that where the title has not passed to the buyer and the property is destroyed without the fault of the seller so that delivery is impossible, the seller is excused from delivery. — Dexter v. Norton, 47 N. Y. 62.

Future Goods. The subject matter of a contract to sell may be either existing goods, owned or possessed by the seller, or future goods, to be manufactured or acquired by the seller. At common law the natural products or expected increase of what was already owned, constituted a special class of future goods. For example, growing crops, wool to be clipped from sheep, cheese to be produced from milk, etc., were said to have potential existence" and a buyer could acquire a present title to them. This distinction has been abolished by the Uniform Sales Act, although it still obtains in states where the act has not been adopted.

It was held that, where a lease of a farm provided that all crops raised by the tenant were the property of the landlord until the rent was paid, the landlord acquired title to the crops on account of their potential existence, and could hold them against creditors of the tenant.

Smith v. Atkins, 18 Vt. 461.

A purported sale of future goods operates as a contract to sell and the buyer obtains no present title, but if the seller fails to deliver, the buyer has a right of action for damages.

When Title Passes. The question of when title to the goods passes from the seller to the buyer is an important one, since the risk of loss follows the title. The Uniform Law provides that, in a contract to sell specific goods, the title passes when the parties intend it to be transferred, and states various rules for ascertaining intention.

1. When there is a contract to sell specific goods in a

deliverable state, title passes when the contract is made, whether the time of payment, or the time of delivery, or both, be postponed.

Baker made a contract with McDonald to buy thirty stacks of hay then in McDonald's field, the hay to be measured and payment and delivery to be made later. It was held that under this contract title passed to McDonald at once. - Baker v. McDonald, 74 Nebr. 595.

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2. Where there is a contract to sell specific goods and the seller is bound to do something to the goods to put them in a deliverable state, title does not pass until such thing be done.

Restad contracted to sell to Engemoen a cow and a steer, Restad to feed and fatten them and deliver them about two months later. It was held that title did not pass at the time of the contract, as the seller had to do something to put the goods in deliverable condition.

Restad v. Engemoen, 65 Minn. 148.

3. When goods are delivered to the buyer on "sale or return" the title passes on delivery, but the buyer may transfer the title back to the seller by returning the goods within the time fixed, or within a reasonable time.

When goods are delivered to the buyer on approval, or on trial, title passes when the buyer signifies his approval, or retains the goods, without rejecting them, beyond the time fixed by the contract or beyond a reasonable time.

Mengel bought a match machine from Forsaith Machine Company on approval. He retained the machine for a year and declared himself dissatisfied with it. It was held, that he had retained the machine an unreasonable time, that title had passed, and that he must pay for the machine. Forsaith Machine Co. v. Mengel, 99 Mich. 280.

4. When a contract is made to sell unascertained or future goods, that is, goods to be weighed or measured or goods to be made by the seller, the buyer becomes the owner when goods answering the description in the contract are delivered to him or to a carrier for transmission to him.

Gratto agreed to build a boat of a certain description for the Yukon River Steamboat Co., who was to pay for it in installments. The boat was built and launched, but was sold by Gratto to some one else. It was held that no title passed, by force of the contract, to the Yukon River Steamboat Co., since the boat had not been delivered.

- Yukon River Steamboat Co. v. Gratto, 136 Calif. 538.

F.O.B. and C.O.D. Shipments. The shipping term "f.o.b. Chicago" means that the seller must deliver the goods free on board in Chicago, either transported or ready to be transported. Where the goods are shipped f.o.b. destination, the title does not pass to the buyer until they reach their destination, but where they are shipped f.o.b. shipping point, the title passes to the buyer as soon as the goods are delivered to the common carrier.

In c.o.d. (cash on delivery) shipments, whether the title passes or not depends upon the law of the state where the sale is made. This term under the Uniform Sales Act indicates that the seller intends to withhold delivery until the goods are paid for, and the title does not pass until payment is made and the goods delivered.

Mail Orders. In case of an order by mail the title passes as soon as the seller selects the goods and they are delivered to the common carrier, who is considered the agent of the buyer. The goods must be according to the contract; otherwise the buyer may reject them. This general rule may be changed by a special contract.

QUESTIONS

1. Is the physical existence of the subject matter necessary to the sale? Explain.

2. In the case of destruction of the subject matter in a sale, who bears the loss?

3. In a contract to sell who bears the loss if the goods are destroyed? 4. What are future goods?

5. Can future goods be the subject matter of a contract to sell? 6. Explain "potential existence."

7. Mention the four rules of the Uniform Law which relate to the passing of title in a sale.

8. (a) What is the difference between a sale on trial and a sale with the privilege of returning the goods? (b) When does the title pass in the case of each?

9. Hinkel took a vacuum cleaner home with him on a ten-day trial. He neglected to return it within the ten days; will he be liable for the price of the cleaner?

10. What is the distinction in a sale between ascertained goods and unascertained goods?

II. Can a portion of a larger quantity be sold and title passed without separating the portion sold from the larger portion? Explain by giving an illustration.

12. When does the title pass in f.o.b. shipments?

13.

What does c.o.d. indicate under the Uniform Sales Act?

14. When goods are ordered by mail, when does the title pass to the buyer?

4. WRITTEN CONTRACTS OF SALE

Contracts in Writing. Except as required by the Statute of Frauds, an oral sales contract is as valid as a written contract. However, in any important purchase, it is desirable to secure from the seller a bill of sale. This is a formal instrument in writing (see form in Appendix) by which the seller transfers his interest in certain specified personal property to the buyer. It certifies that the buyer is the owner of the property and warrants the title thereto.

The Statute of Frauds. Section seventeen of the English Statute of Frauds provides: "No contract for the sale of goods, wares, and merchandise, for the price of ten pounds sterling or upward, shall be allowed to be good except:

1. The buyer shall accept part of the goods sold, and actually receive the same; or

2. Give something in earnest to bind the bargain, or in part payment; or,

3. 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 authorized.”

As will be seen, the statute includes most of the articles regarded as personal property under the terms, goods, wares, and merchandise."

The English statute has been followed in most states in this country; but the amounts vary from $10 to $2500.

Value and Price. A distinction is made between the words "in value" and "in price." "In value" is used where the Uniform Sales Act is in force, and "in price" was used in the old statutes.

The value is what the goods are worth in the market; the price is the amount agreed upon by the parties.