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Theophilus Parsons.

Laws of business for all the states of the Union : with forms and directions for all transactions. And abstracts of the laws of all the states and territories on the various topics online

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Online LibraryTheophilus ParsonsLaws of business for all the states of the Union : with forms and directions for all transactions. And abstracts of the laws of all the states and territories on the various topics → online text (page 14 of 70)
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has a right to retain possession of the property sold until the price
is paid. This right is called a lien, which means the right of retain-
ing possession of property until some charge upon it, or some claim
on account of it, is satisfied. It rests therefore on possession.
Hence the seller (and every other person who has a lien) loses it by
voluntarily parting with the possession, or by a delivery of the
goods. And it is a delivery for this pupose, if he delivers a part
without any purpose of severing that part from the remainder ; or
if he make a symbolical delivery which vests this right and power
of possession in the buyer, as by the delivery of the key of a ware-
house in which they are locked up.

If the seller delivers the goods to the buyer, as he thereby loses
his lien, he cannot afterwards, by virtue of this lien, retake the
goods and hold them. But if the delivery was made with an express
agreement that non-payment of the price should revest the property
in the seller, this agreement may be valid, and the seller can reclaim
the goods from the buyer if the price be not paid.

If the buyer neglect or refuse to take the goods and pay the price
within a reasonable time, the seller may resell them on notice to the
buyer, and look to him for the deficiency by way of damages for
the breach of the contract. The seller, in making such resale, acts
as agent or trustee for the buyer ; and his proceedings will be regu-
lated and governed by the rules usually applicable to persons acting
in those capacities ; and the principal one of these is, that he will
be held to due care and diligence, and to perfect good faith.

Certain consequences flow from the rules and principles already
stated, which should be noticed. Thus, if the party to whom the
offer of sale is made, accepts the offer, but still refuses or neglects
to pay the price, and there are no circumstances indicating a credit,
or otherwise justifying the refusal or neglect, the seller may, as we
have said, disregard the acceptance of his offer, and consider the
contract as never made, or as rescinded. It would, however, be
proper and prudent on the part of the seller expressly to demand
payment of the price before he treated the sale as null ; and a re-
fusal or neglect would then give him at once a right to hold and
treat the goods as his own. So, too, if the seller unreasonably neg-



WHAT CONSTITUTES A SALE. . 113

lected or refused to deliver the goods sold, and especially if he
refused to deliver them, the buyer thereby acquires the right to
consider that no sale was made, or that it has been avoided (or
annulled). But neither party is bound to exercise the right thus
acquired by the refusal or neglect of the other, but may consider
the sale as complete ; and the seller may sue the buyer for non-pay-
ment, or the buyer may sue the seller for non-delivery.

If the seller has merely the right of possession, as if he hired the
goods ; or if he has the possession only, as if he stole them, or found
them ; he cannot sell them and give good title to the buyer against
the owner ; and the owner may therefore recover them even from
an honest purchaser who was wholly ignorant of the defect in the
title of him from whom he bought them. This follows from the
rule above stated, that only he who has in himself a right of proper-
ty can sell a chattel, because the sale must transfer the right of
property from the seller to the buyer. The only exception to the
above rule is where money, or negotiable paper transferable by
delivery (which is considered as money), is sold or paid away. In
either case, he who takes it in good faith, and for value, from a
thief or finder, holds it by good title. But if the owner once sold
the thing, although he was deceived and induced to part with his
property through fraud, he cannot reclaim it from one who in good
faith buys it from the fraudulent party.

If any thing remains to be done by the seller, to or in relation to
the goods sold, for their ascertainment, identification, or completion,
the property in the goods does not pass until that thing is done ; and
there is as yet no completed sale. Therefore, if there be a bargain
for the sale of specific goods, but there remains something material
which the seller is to do to them, and they are casually burnt or
stolen, the loss is the seller's, because the property (or ownership,)
had not yet passed to the buyer.

So, if the goods are a part of a large quantity, they remain the
seller's until selected and separated ; and even after that, until
recognized and accepted by the buyer, unless it is plain from words
or circumstances that the selection and separation by the buyer are
intended to be conclusive upon both parties.

If repairing or measuring or counting must be done by the seller,



114 SALES OF PERSONAL PKOPERTY.

before the goods are fitted for delivery or the price can be determined
or their quantity ascertained, they remain, until this be done, the
seller's. And where part is measured and delivered this part passes
to the vendee, but the portion not so set apart does not. But if the
seller delivers them and the buyer accepts them, and any of these
acts remain to be done, these acts will not be considered as belonging
to th,e contract of sale, for that will be regarded as completed, and the
ownership of the goods will have passed to the buyer ; and these
acts will be taken only to refer to the adjustment of the final settle-
ment as to the price.

Thus, a purchaser offers a nursery-man a dollar apiece for two
hundred out of a row of two thousand trees, which are all alike, and
the offer is accepted. This is no sale, because any two hundred
may be delivered, and therefore the property or ownership of any
specific two hundred does not pass. But if the purchaser o'r seller
had said, the first two hundred in the row, or the last, or every
third tree, or otherwise indicated the specific trees, there would
have been a sale, and by the sale those specific trees would have
become at once the trees of the buyer. The seller would dig up
and deliver them as the buyer's trees, and if they were burned up
by accident an hour after the sale, and before digging, the buyer
would lose the trees. If not specified, however, even if they were
paid for, they remain the property of the nurseryman, because, in-
stead of an actual sale, there is only a bargain that he will select
two hundred from the lot, and take up and deliver them. And if
they are destroyed before delivery, this is the loss of the nurseryman.

Moreover, it is to be noticed that a contract for a future sale, to
take place either at a future point of time, or when a certain event
happens, does not, when that time arrives, or on the happening of the
event, become of itself a sale, transferring the property. The party
to whom the sale was to be made does not then acquire the property,
and cannot by tendering the price acquire a right to possession ; but
he may tender the price, or whatever else would be the fulfilment
of his obligation, and then sue the owner for his breach of contract,
if he will not deliver the goods. But the property in the goods
remains in the original owner.

For the same reason that the property in the goods must pass by



DELIVERY AND ITS INCIDENTS. 115

a sale, there can be no actual sale of any chattel or goods winch
have no existence at the time. It may, as we have seen, be a good
contract for a future sale, but it is not a present sale. Thus, in
contracts for the sale of articles yet to be manufactured, the subject
of the contract not being in existence when the parties enter into
their engagement, no property passes until the chattel is in a fin-
ished state, and has been specifically appropriated to the person
giving the order, and approved and accepted by him.

As there can be no sale unless of a specific thing, so there is no
sale but for a price which is certain, or which is capable of being
made certain by a distinct reference to a certain standard.



SECTION II.
DELIVERY AND ITS INCIDENTS.

WHEN a sale is effected, the buyer has an immediate right to the
possession of the goods, as soon as he pays or tenders the price ; or
at once, without payment, if the sale be on credit. And the seller
is bound to deliver the goods.

What is a sufficient delivery is sometimes a question of difficulty.
In general, it is sufficient, if the goods are placed in the buyer's
hands or his actual possession, or if that is done which is the equiva-
lent of this transfer of possession. Some modes and instances of
delivery we have already seen. We add, that if the goods are
landed on a wharf alongside of the ship which brings them, with
notice to the buyer, or knowledge on his part, this may be a suffi-
cient delivery, if usage, or the obvious nature of the case, make it
equivalent to actually giving possession. And usage is of the utmost
importance in determining questions of this kind.

In general, the rule may be said to be, that that is a sufficient
delivery which puts the goods within the actual reach or power of
the buyer, with immediate notice to him, so that there is nothing to
prevent him from taking actual possession.

When, from the nature or situation of the goods, an actual de-
livery is difficult or impossible, as in case of a quantity of timber



116 SALES OF PERSONAL PROPERTY.

floating in a boom, slight acts, as touching the timber, or even going
near it and pointing it out, are sufficient to constitute a delivery, if
they sufficiently indicate the transfer of possession. So if the prop-
erty which is the subject of the sale is at sea, the indorsement and
delivery of the bill of lading, or other instrument of title, is sufficient
to constitute a delivery, and by such indorsement and delivery of
the bill of lading the property in the goods immediately vests in the
buyer ; and he can transfer this to one who buys of him, by his own
indorsement and delivery of the bill of lading. Where goods at sea
are sold, the seller should send or deliver the bill of lading to the
buyer within a reasonable time, that he may have the means of
offering the goods in the market. And it has been held that a
refusal of the bill of lading authorized the buyer to rescind the salv

Until delivery, the seller is bound to keep the goods with ordinary
care, and is liable for any loss or injury arising from the want of
such care or of good faith. But if he exercises ordinary care and
diligence in keeping the commodity, he is not liable for any loss or
depreciation of it, unless this arises from some defect which he has
warranted not to exist. Thus, in a case in New York, A sold to J3
a certain quantity of beef, B paying the purchase-money in full ; and
it was agreed between them that the beef should remain in the cus-
tody of A until it should be sent to another place. Some time after,
B received a part, which proved to be bad, and the whole was found,
on inspection, to be unmerchantable. The court held that, as the
beef was good at the time of its sale, the vendee (or buyer) must
bear the loss of its subsequent deterioration.

If the buyer lives at a distance from the seller, the seller must
send the goods in the manner indicated by the buyer. If no direc-
tions are given, he must send them in such a way as usage, or in the
absence of usage, as reasonable care would require. And gener-
ally all customary and proper precautions should be taken to pre-
vent loss or injury in the transit. If these are taken, the goods are
sent at the risk of the buyer, and the seller is not responsible for
any loss. But he is responsible for any loss or injury happening
through the want of such care or precaution. And if he sends
them by his own servant, or carries them himself, they are in his
custody, and, generally, at his risk, until delivery. But if the buyer



DELIVERY AND ITS INCIDENTS. 117

distinctly indicates the way or means by which he wishes that the
goods should be sent to him, as by such a carrier, or such a line, if
the seller complies with his directions, and exercises ordinary care
over the goods until they are delivered to the person or line so
pointed out, his responsibility ends with this delivery, in the same
manner as it would if he delivered the goods into the hands of the
owner.

This question of delivery has a very great importance in another
point of view ; and that is, as it bears upon the honesty, and there-
fore the validity, of the transaction. As the owner of goods ought
to have them in his possession, and as a transfer of possession usual-
ly does, and always should, accompany a sale, the want of this trans-
fer is an indication, more or less strong, that the sale is not a real
one, but a mere cover. The prevailing rule may be stated thus.
Delivery is not essential to a sale at common law ; but if there is no
delivery, and a third party, without knowledge of the previous sale,
purchases the same thing from the seller, he gains an equally valid
title with the first buyer ; and if he completes this title by acquiring
possession of the thing before the other, he can hold it against the
other. So, also, unless delivery or possession accompany the trans-
fer of the right of property, the things sold are subject to attach-
ment by the creditors of the seller. And if the sale be completed,
and nevertheless no change of possession takes place, and there is no
certain and adequate cause or justification of the want or delay of
this change of possession, the transaction will be regarded as fraudu-
lent and void in favor of a third party, who, either by purchase or by
attachment, acquires the property in good faith, and without a knowl-
edge of the former safe. This fact, that the thing sold remained in
the possession of the seller, might be explained, and if shown to bo
perfectly consistent with honesty, and to have occurred for good rea-
sons, and especially if the delay in taking possession was brief, the
title of the first buyer would be respected.

If goods are sold in a shop or store, separated, and weighed or
numbered if that be necessary, and put into a parcel, or otherwise
made ready for delivery to the buyer, in his presence, and he
request the seller to keep the goods for a time for him, this is so far
a delivery as to vest the property in the goods in the buyer, and tho



118 SALES OF PERSONAL PROPERTY.

sellei becomes the bailee of the buyer. And if the goods are lost
while thus in the keeping of the seller, without his fault, it is the
loss of the buyer. (In law the word bail means " to deliver."
Thus a "bailor" is one who delivers a thing to another; tho
" bailee " is the party to whom it is delivered ; and " bailment " is
the delivery. The " bail " of a party who is arrested, is he or they
to whom the arrested person is delivered or given up, on their agree-
ment that he shall be forthcoming when required by law.)

In a contract of sale there is sometimes a clause providing that a
mistake in description, or a deficiency in quality or quantity, shall
not avoid the sale, but only give the buyer a right to deduction
or compensation. But if the mistake or defect be great and sub-
stantial, and affects materially the availability of the thing for the
purpose for which it was bought, the sale is nevertheless void, for
the thing sold is not that which was to have been sold.

If the buyer knowingly receives goods so deficient or so different
from what they should have been that he might have refused them,
he will be held to have waived the objection, and to be liable for the
whole price ; unless he can show a good reason for not returning
them, as in the case of materials innocently used before discovery
of the defects, or the like. Thus, where a man bought a chandelier
warranted sufficient to light a certain room, and kept it six months,
the court did not permit him to return it and refuse payment,
although it was not what it had been warranted to be. Sometimes
two or three months, or even less, is held too long a keeping to per-
mit a subsequent return. But though the buyer cannot return the
tiling, yet, when the price is demanded, he may set off whatever
damages he has sustained by the seller's breach of contract, and the
seller can recover only the value to the buyer of the goods sold,
even if that be nothing. But a long delay or silence may imply a
waiver of even this right on the part of the buyer.

One who orders many things at one time, and by one bargain,
may, generally, refuse to receive a part without the rest ; but if he
accepts any part, he severs that part from the rest, and rebuts (or
removes) the presumption that it was an entire contract ; the buyer
will then be held as having given a separate order for each thing, or
part, and as therefore bound to receive such parts as are tendered,



DELIVERY AND ITS INCIDENTS. 119

unless some distinct reason for refusal attaches to them. If many
several things are bought at one auction, but by different bids, and
especially if the name of the buyer be marked against each, there is
a separate sale to him of each one, and it is independent of the
others ; so that he must take and pay for any one or more, although
the othors are not what they should be, or cannot be had. If, how-
ever, it could be shown by the nature of the case, or by evidence,
that the things were so connected that one was bought entirely for
the sake of the other, he would net be obliged to take the one unless
he could have the other. This rule applies also when the things
sold are lots of land. Indeed, the general rule may be stated thus.
The question whether it is one contract, so that the buyer shall not
be bound to receive any part unless the whole be tendered to him,
will be determined by ascertaining from all the facts whether the
parts so belong together that it may reasonably be supposed that
none would have been purchased if the whole had not been pur-
chased, or if any part could not have been purchased.

The buyer may have, by the terms of the bargain, the right of
redelivery. For sales are sometimes made upon the agreement that
the purchaser may return the goods within a fixed, or within a
reasonable time. He may have this right without any condition,
and then has only to exercise it at his discretion. But he may have
the right to return the thing bought, only if it turns out to have, or
not to have, certain qualities ; or only upon the happening of a
certain event. In such case the burden of proof is on him to show
that the circumstances exist which are necessary to give him this
right. In either case the property vests in the buyer at once, as in
ordinary sales ; but subject to the right of return given him by the
agreement. If he does not exercise his right within the agreed
time, or within a reasonable time if none be agreed upon, the right
is wholly lost, the sale becomes absolute, and the price of the goods
may be recovered in an action for goods sold and delivered. And
if during the time the buyer so misuse the property as to materially
impair its value, he cannot tender it back, but is liable for the price,



120 SALES OF PERSONAL PROPERTY.

SECTION IIL
CONTRACTS VOID FOB IIXEGAUTY OR FRAUD.

As the law will not compel or require any one to do that which
it forbids him to do, no contract can be enforced at law which is
tainted with illegality. It may, however, be necessary to consider
whether the contract be entire or separable into parts, and whether
it is wholly or partially illegal. If the whole consideration, or any
part of the consideration, be illegal, the promise founded upon
it is void, whether the promise is legal or not. But if the considera-
tion is legal, and the promise is in part legal and in part illegal, it
is valid for the legal part and may be enforced for that part. Thus,
if a master of a vessel agreed to smuggle goods, and in consideration
of his doing so the owner promised to pay him one-fourth of his
profits, and also to advance twenty dollars a month to his family
during a certain time, the master could enforce ' no part of this
promise, and recover no damages for any breach of it, because the
consideration is illegal. But if, for one thousand dollars paid, the
receiver agreed to sell and deliver a quantity of merchandise, and
also to assist the buyer in some contemplated fraud, he would be
bound to sell and deliver the goods, because the consideration was
legal, and this part of the promise was legal, but not to assist in the
fraud, because this part of the promise is illegal. I mean to say,
that if a whole promise, or any part of a promise that cannot be
severed into substantial and independent parts, is illegal, the whole
promise is void. But if the consideration is legal, and the promise
is legal in part and illegal in part, and that part of the promise
which is legal can be severed from that part which is illegal, and
then be a substantial promise having a value of its own, this legal
part can be enforced. For further remarks upon this subject, how-
ever, I refer to the previous chapter on Consideration*

Formerly, an agreement to sell at a future day goods which the
promisor had not at the time, and had not contracted to buy, and
had no notice or expectation of receiving by consignment, was
considered open to the objection that it was merely a wager, and






CONTRACTS VOID FOR ILLEGALITY OB FRAUD. 121

therefore void. But later cases have admitted it to be a valid con-
tract.

We have already said, in a preceding chapter, that fraud vitiates
and avoids every contract and every transaction. Hence, a wilfully
false representation by which a sale is effected ; or a purchase of
goods with the design of not paying for them ; or hindering others
from bidding at auction by wrongful means ; or selling at auction,
and providing by-bidders to run the thing up fraudulently ; or
selling " with all faults," and then purposely concealing and dis-
guising them, as when a man advertised a ship for sale at auction
" with all faults," but purposely put her in a situation where an
important fault could not be easily detected ; or any similar act,
will avoid a sale. No title or right passes by such sale to the fraudu-
lent party ; but the innocent party, whether buyer or seller, may
waive the fraud, and insist that the fraudulent party shall not take
advantage of his own fraud to avoid the sale.

A buyer who is imposed upon by a fraud, and therefore has a
ri^'ht to annul the sale, must exercise this right as soon as may be
after discovering the fraud. He does not lose the right necessarily
by every delay, but certainly does by any considerable and unex-
cused delay.

A seller may rescind and annul a sale if he were induced to make
it by fraud. But he may waive the right and sue for the price. If,
however, the fraudulent buyer gets the goods on a credit, and the
seller sues for the price before the credit expires, this suit is a con-
firmation of the whole sale, including the credit ; or rather it is an
entire waiver of his right to annul the sale v and the suit cannot be
maintained until the credit has wholly expired.

If a party who has been defrauded by any contract brings an
action to enforce it, this is a waiver of his right to rescind, and a
confirmation of the contract. Or if, with knowledge of the fraud,
he offers to perform the contract on conditions which he had no
right to exact, this has been held so effectual a waiver of the fraud
that he cannot set it up in defence, if sued on the contract.



122 SALES OF PERSONAL PROPERTY.

SECTION IV.
SATES WITH WARRANTY.

A SALE may be with warranty ; and this may be general, or
particular and limited. A general warranty does not extend to
defects which are known to the purchaser ; or which are open to
inspection and observation, unless the purchaser is at the time
unable to discover them readily, and relies rather upon the
knowledge and warranty of the seller. A warranty may also be
either express or implied. It is not implied by the law generally
merely from a full, or, as it is called, a sound price. The rule of
law, caveat emptor (let the buyer take care), prevents this. But this
rule never applies to cases of fraud. As a general rule however,
mere silence on the part of the seller is not fraud ; but the usage
of the trade will be considered, and if that require a declaration of
certain defects whenever they exist, the absence of such declaration
is a warranty against such defects. Mere declarations of opinion
are not a warranty. Thus, in England, an action was brought on a
warranty that certain goods were fit for the China market. The
plaintiff produced a letter from the defendant, saying that he had



Online LibraryTheophilus ParsonsLaws of business for all the states of the Union : with forms and directions for all transactions. And abstracts of the laws of all the states and territories on the various topics → online text (page 14 of 70)