87. Payment or Security may be a Condition of Title's passing. A stipulation that the buyer shall immediately take out of circulation and redeliver to the seller bills outstanding against the latter,' or that he shall give a chattel mortgage on the goods, or that he shall give his negotiable paper for the goods, renders the contract conditional. "A negotiable security is more beneficial to the vendor than a sale on account; it gives him conclusive proof of his debt, and is more available for use by enabling him to raise money on it." When the re

tirement of bills, or the delivery of a chattel mortgage, or of negotiable paper is made a condition precedent to the passing of title, a delivery of the goods by the seller to the purchaser is treated as conditional also, in the absence of evidence showing that the seller has waived the condition.4

88. Effect of Part Payment by Conditional Purchaser. — When the contract provides that the title to goods bargained for shall remain in the vendor until the whole of the price is paid, the buyer does not acquire a legal title to or interest in the goods. upon paying a part of the price. On the other hand, he may forfeit such payment by a subsequent failure to pay the balance.5

Brown, 80 Kan. 520; 103 Pac. 83 (1909), citing notes in 120 Am. St. R. 864, 868; 11 L. R. A. N. s. 948, and 13 L. R. A. N. s. 697.

1 Bishop v. on Sales, 125.

Shillito, 2 B. & Ald. 329, note (a) (1819); Burdick's Cases

2 Empire State Foundry Co. v. Grant, 114 N. Y. 40; 21 N. E. 49 (1889); Burdick's Cases on Sales, 125; Jones v. Southern Cooperage Co., 94 Ark. 621; 127 S. W. 704 (1910); Hyde Park Lumber Co. v. Shepardson, 72 Vt. 188; 47 At. 826 (1900).

Whitney v. Eaton, 15 Gray (81 Mass.), 225 (1860); Kelly & McLaughlin v. Pierce & Chamberlain, 16 N. D. 234, 239; 112 N. W. 995; 12 L. R. A. N. s. 180, and case note (1907). Upon the buyer's failure to give the notes, the seller was allowed to sue for the contract price, as the damages for the buyer's breach of his contract. Stephenson v. Repp, 47 Ohio St. 551; 25 N. E. 803; 10 L. R. A. 620 (1890).

4 Cases in the last three preceding notes, and Campbell on Sales (2d ed.), 344. It must be admitted that Comer v. Cunningham, 77 N. Y. 391 (1879), and other New York cases contain statements at variance with the text; but it is believed that the latter is supported by the weight of authority.

Ryan v. Wayson, 108 Mich. 519; 66 N. W. 370 (1896); Burdick's Cases on Sales, 127; Woodman v. Blue Grass Land Co., 125 Wis. 489; 103 N. W. 236 (1905). "The earnest money was voluntarily paid by the plaintiff at the inception of the contract as a part payment thereon, and was

89. Sale upon Condition Subsequent. - A condition subsequent does not alter the nature of a bargain and sale. Hence, a contract for the present sale of a specific chattel, with an option to the purchaser to return, passes the title subject to its defeasance by the buyer's exercise of his option.1 This doctrine has been codified in the Uniform Sales Act.2

89 (a). C. O. D. Sales. It is not uncommon, in this country, for the purchaser to select goods and direct the seller to ship them C. O. D.; that is to collect the price through the carrier upon their delivery. Such transactions are generally and, it is submitted, properly regarded as cases of bargain and sale. Title passes, subject to the seller's right to receive payment upon delivery through the carrier.3 More frequently, perhaps, goods are ordered by a purchaser, and the seller ships them C. O. D. In such case, the question arises, does the shipper unconditionally appropriate the goods to the contract, thus passing title subject to his seller's lien for the price, or does he reserve title as well as possession? The weight of judicial authority treats the transaction as a sale, in the absence of facts disclosing a different intention of the parties. This view rightfully in defendant's possession. The plaintiff repudiated the contract while there was still ample time for the defendant to perform. By that act he did not and could not affect the character of the acts which had already been performed in carrying out the contract, and manifestly could not reinvest himself with the title to the earnest money.” Rayfield v. Van Meter, 120 Cal. 416; 52 Pac. 666 (1898); cf. Ross-Meehan Foundry Co. v. Pascagoula, 72 Miss. 608, 615; 18 So. 364 (1895).

1 Ray v. Thompson, 12 Cush. (Mass.) 281; 59 Am. R. 187 (1853); Sturm v. Boker, 150 U. S. 312; 14 Sup. Ct. 99 (1893); Foley v. Felrath, 98 Ala. 176; 13 So. 485; 34 Am. St. R. 39 (1892); Lynch v. Willford, 57 Minn. 377; 59 N. W. 311 (1894). But see Sale of Goods Act, § 18, Rule 4. 2 Mass. L. 1908, ch. 237, § 19, Rule 3 (1); N. Y. L. 1911, ch. 571, § 100. Infra, ¶ 98.

State v. Wernag, 116 N. C. 1061; 21 S. E. 683; 28 L. R. A. 297; 47 Am. St. R. 873 (1895); State v. Mullin, 78 Ohio St. 358; 85 N. E. 556, 557 (1908); Reed v. Am. Exp. Co., — Tex. Civ. App. —; 127 S. W. 901 (1910). The authorities are carefully digested in a learned article by Dean Gregory in 4 Col. L. R. 541 (1904).

City of Carthage v. Duvall, 202 Ill. 234; 66 N. E. 1099 (1903), and authorities cited in the opinion. State v. Intoxicating Liquors; Bishop, claimant, 98 Me. 464; 57 At. 798 (1904); U. S. v. Adams Ex. Co., 119 Fed. 240 (1902); Norfolk & West Ry. v. Sims, 191 N. S. 441; 24 Sup. Ct. 15 (1903), reversing Sims v. Norfolk & West. Ry., 130 N. C. 556; 41 S. E. 673 (1902).

has been adopted by the Uniform Sales Act, which declares that the presumption of an unconditional appropriation of the goods to the contract, by the seller, "is applicable, although by the terms of the contract, the buyer is to pay the price before receiving delivery of the goods, and the goods are marked with words 'collect on delivery,' or their equivalents.'

" 1

1 Mass. L. 1908, ch. 237, § 19, Rule 4 (2); N. Y. L. 1911, ch. 571, § 100, Rule 4 (2). Contra, E. M. Brash Cigar Co. v. Wilson, 32 Okla. 153; 121 Pac. 223 (1911).

CHAPTER III.

CONTRACT TO SELL.

§ 1. Existing or Specific Goods.

90. WE have seen that a bargain and sale transfers the general property in goods to the buyer. On the other hand, a contract to sell goods, whether these are specific or general. does not operate to pass title, but contemplates its conveyance in the future. To which of these classes a particular agreement belongs, may or may not be clear from the language employed and the circumstances of the case. But even where the parties have failed to disclose their intention on this subject, if a litigation ensues, it must be decided. Accordingly, courts have found it necessary to adopt and adhere to certain rules in determining whether cases before them fall within one or the other of these classes; and, if they belong to the second class, at what time title passes to the buyer. In England these rules have been codified. In this country they are to be deduced in most jurisdictions from the decisions of their courts,2 although some States have codified them.3 One of these rules was applied in the preceding chapter; the others will now be considered.

91. Goods to be made deliverable by the Seller. - Under the rule considered in the preceding chapter, we saw that a stipu

1 Sale of Goods Act, 1893, § 18.

2 Barber v. Thomas, 66 Kan. 463; 71 Pac. 845 (1903).

3 The Uniform Sales Act, Arizona L. 1907, ch. 99; Conn. L. 1907, ch. 212; Md. L. 1910, ch. 346; Mass. L. 1908, ch. 237; N. J. L. 1907, p. 312; N. Y. L. 1911, ch. 571; Ohio L. 1908, p. 413; R. I. L. 1908, ch. 1548; Wis. L. 1911, ch. 549.

Prior to this staute, the following States had codified this topic to some extent: Cal., Ga., La., Mont., N. D., S. D.

4 See especially ¶ 84.

lation for the future delivery of specific goods in a deliverable state does not raise a presumption that the parties intend to postpone the passing of title. Such a presumption is created, however, when the seller engages to do something to the goods for the purpose of putting them into a deliverable state. The reason for this presumption has been stated as follows: "In general, 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 still 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. It is, therefore, reasonable that where by the agreement the vendor is to do something before he can call upon the purchaser to accept the goods as corresponding to the agreement, the intention of the parties should be taken to be, that the vendor was to do this before he obtained the benefit of the transfer of the property."

5

7

Accordingly, if the seller, before the goods are deliverable, is under obligation to sever the trunks of certain trees,2 or to fatten animals,3 or to gin, bale, and bag cotton, or to trim and paint a vehicle, or to finish the tanning of hides, or to put fish on flakes and further dry them, or to complete the burning of charcoal, or to pay off all charges or liens upon the goods, or to shell corn,10 the title will be deemed not to pass until the seller's performance of the stated condition," unless other facts 1 Blackburn on Sales (2d ed.), 175.

8

2 Acraman v. Morrice, 8 C. B. 449 (1849); Burdick's Cases on Sales, 130.

'Rourke v. Bullens, 8 Gray (Mass.), 549 (1857); Restad v. Engemoen, 65 Minn. 148; 67 N. W. 1146 (1896); Burdick's Cases on Sales, 131. 4 The Elgee Cotton Cases, 22 Wall. 180 (1874).

5 Halterline v. Rice, 62 Barb. 593 (1863). But the parties may contract for the present sale of unfinished wagons and for their completion by the seller after the passing of title. Paine v. Young, 56 Md. 314 (1881). Pritchett v. Jones, 4 Rawle (Pa.), 259 (1833).

7 Foster v. Ropes, 111 Mass. 10 (1872).

Hale v. Huntley, 21 Vt. 147 (1849).

• Malone v. Minn. Stone Co., 36 Minn. 325; 31 N. W. 170 (1887). 10 Thompson v. Conover, 32 N. J. L. 466 (1865).

11 Sempel v. Northern Hardwood L. Co., 142 La. 586; 121 N. W. 23 (1909), containing a full citation and discussion of authorities. Wesoloski v. Wysoski, 186 Mass. 495; 71 N. E. 982 (1904), onions to be screened to