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the pledgee or mortgagee upon compliance with certain conditions. The distinction between a sale and a bailment will be more fully seen by reference to the chapter on Bailments. A contract of sale is also to be distinguished from a contract for work and labor. The distinction generally drawn by the courts is that if the contract contemplates the delivery of an article which is an ordinary and common article of commerce, although not in existence at the time the contract is made, the contract is one of sale; but if it is one for the manufacture of some unusual article, or one for a specific purpose, which is ordinarily not an article of commerce, and must be made for a particular occasion or transaction, then the contract is one for work and materials. Thus, a contract to build a carriage according to a certain design is a contract for work and materials and not one of sale. Again, a contract to deliver a thousand brooms of ordinary kind, although to be manufactured, is one of sale, whereas a contract to make lithographs of a certain kind, to be used to advertise a theatrical performance, is one for labor and materials. This distinction is often material in determining whether a contract comes within the provisions of the statute of frauds, as this statute applies to contracts of sale, but not to those for labor and materials.
It often happens that one who wishes to give security for the payment of a debt will transfer to his creditor property as security, but the form of the transaction is one of sale. Thus, A, who owes B a certain sum of money, may transfer to him absolutely certain personal property, with the understanding that if he pays his debt within a certain time he may have back his property. Such contracts are regarded by the courts as made for security only, and although the parties apparently effect a complete sale, if there was an express or implied understanding that it was made to secure a debt the apparent buyer does not obtain an absolute title. The apparent seller always has a right to redeem his property until his right of redemption has been foreclosed by some process authorized by law, even though he does not pay at the time agreed upon. On this principle, bills of sale of personal property, and deeds of real estate are often construed to be mortgages by the courts. There is nothing to prevent a debtor from transferring and turning over to his creditor property in payment of a debt absolutely, if such is the intention
of the parties, but the inclination of the courts is to treat such contracts as for security only, unless it clearly appears otherwise.
A gift is a transfer of property effected by immediate delivery, without consideration. A gift is not a contract, and therefore it is not a sale. The contract of sale, in order to be valid, must have all the requisites of a valid contract; there must be competent parties, mutual assent, a consideration and a legal subject matter of sale. A contract of sale, like any other contract, is made by an offer on one side, and an acceptance on the other, and the contract is not complete until the minds of the parties have met on the same thing. The law of contracts, as already discussed, and the law in regard to fraud and mistake in contracts, and illegal contracts applies to sales as well as to other forms of contracts, and need not be here repeated.
Statute of frauds.-The statute of frauds plays an important part in contracts of sale. Whenever a contract of sale for property exceeding in price fifty dollars is made, this statute should be borne in mind. It provides that every contract for the sale of any goods, chattels or things in action for the price of fifty dollars or more shall be void unless: 1) a note or memorandum of such contract be made in writing and be subscribed by the parties to be charged therewith, or 2) unless the buyer shall accept and receive part of such goods or the evidences or some of them of such things in action, or 3) unless the buyer shall, at the time, pay some part of the purchase money. This section is discussed at length in the chapter in the Statute of Frauds, to which reference should be made. It should also be borne in mind that a contract for the sale of anything which the law considers real estate must be in writing. A notable example of this is a sale of standing timber. Such a contract must be in writing. See the chapter on the Statute of Frauds.
What may be sold.-As a sale is a present transfer of a right of property in a thing, it follows that a person cannot sell a thing which he does not own at the time of sale. Therefore, when two persons make a contract of sale of a thing which both believe to be in existence at the time of sale, but it turns out subsequently that the thing had been destroyed by fire or otherwise at the time of sale, the contract is void, as there is no subject matter on which it can operate,
If the subject matter of the sale is partially destroyed and the parties contract in ignorance of such fact, the contract is voidable at the option of the buyer; he may take the property left, or in its damaged condition and deduct from the selling price the amount of the damage done, or refuse it altogether. It is not necessary to a valid sale that the seller have the actual possession of the thing sold; if the thing is in existence and he has an absolute right of property in it, he may sell it or any interest therein, irrespective of the possession. Thus, one who has rented personal property to another may sell it to a third while it is in the possession of the renter. There may also be a valid sale of property to come into existence in the future, providing such property has a potential existence. By this is meant that the party selling has already certain property out of which the property sold is to come, or has such property in his possession in an undeveloped condition, and the sale contemplates a delivery in some more developed form. There is, however, some conflict in the decisions of of the courts on this subject. It has been generally held that a person may sell a crop of wool to be grown on his sheep, or may sell his earnings arising from a certain employment which he holds. Most of the courts also hold that a person may sell the future crop of his farm. But such is not the law in Wisconsin. Thus, it has been held in Wisconsin that a chattel mortgage on a crop which had been sown but which had not yet grown was void. The court says: "In our opinion a chattel mortgage can operate only upon property in actual existence at the time of execution, and cannot be given, as was attempted to be done in this case, upon a crop before it can be said to be in existence." It is in existence after the seed sown has sprouted and made its appearance above ground as a growing crop. A chattel mortgage on a crop already growing is probably good, and also a sale thereof. In a case in Wisconsin a person gave a chattel mortgage on all his “stock of harnesses ...and other merchandise now on hand and manufactured, or such as shall be manufactured or bought and contained in the shop or store occupied by me.' The court held that the same rules of law as to what could be sold would apply to a mortgage, and held that a mortgage or sale of such after-acquired property as was mentioned in the mortgage would be void. This subject is further discussed in the chapter on Chattel Mortgages. A person cannot sell
what is not at least potentially in existence and under his control. Thus, one cannot sell the crop on a farm which he expects to purchase, or the wool to be grown from sheep which he does not own. The obvious reason for this is that one cannot pass a title to another in something to which he has no title himself. What has been said, however, applies only to contracts of sale which are executed. A person may agree to sell any kind of property which he does not own but which he intends to acquire after he makes the agreement to sell. This is an executory contract of sale. In such case the person passes no title in anything; he does not sell, but he agrees to sell. In such case, if the seller afterwards acquires the identical property which he has agreed to sell, it does not, by the act of acquiring it alone, become the property of the purchaser, but there must be a passing of title and delivery by the seller in pursuance to the terms of the sale. In other words, the buyer gets nothing under his contract except a promise on the part of the seller that he will deliver to him certain property in the future. Thus, a person may agree to sell grain in the future at the price agreed upon although he does not own it. Most of the contracts made on the board of trade are of this character. In the case of an executory contract of sale the buyer cannot, except in rare cases, enforce a delivery of the property agreed to be sold if the seller is not willing to deliver it, but his only remedy is to hold the seller liable for damages for breach of contract.
Passing of title.- The most important point to be noted about a contract of sale is that relating to the passing of the title. A great deal of litigation on the subject of sales is centered around the question as to whether title has passed or not, and it is sometimes very important in its bearings upon the rights of parties to ascertain the precise time at which the title has passed, if it has passed at all. If the contract is executory, no title passes; if it is executed, the title has passed. If the title has passed, the thing which is the subject of the contract becomes the property of the buyer, but not until then. It will be seen at once that up to the time that the title passes all the consequences which may attend the ownership of property remain with the seller, and thereafter they are with the buyer. In cases where the property is destroyed or damaged after a contract for its sale has been made but before it has passed into the possession of the buyer, this ques
tion is therefore frequently of importance. After the title has passed, the property is at the buyer's risk, and before that time, at the seller's. Of course the parties may make an express stipulation to the effect that either shall bear the risk of the property before or after the title has passed. Whether the title has passed or not depends upon the intention of the parties, as gathered from their words and acts. Usually the title does not pass while there remains anything to be done on the part of the seller to complete the sale. The parties may expressly contract otherwise, however. For instance, they may agree that title shall pass although the goods are still to be selected, or to be weighed. If a person should buy twenty-five books out of a lot of one hundred with the right to select any twenty-five, and the books should burn before he has had an opportunity to make his selection, the loss would fall on the seller; if he had made his selection and had set the books apart, the loss would fall on the buyer. The intention of the parties on the specific point of the passing of the title is rarely made a matter of express agreement and therefore such intention must be gathered from the terms of their agreement and their conduct. The rules of law governing the question of passing title are well established, and in most cases it is not difficult with the application of these rules to determine the question. The main rule of law to determine this question is that if something remains to be done by the seller before the property is ready for delivery to the buyer, the title does not pass. For instance, if property remains to be measured, weighed, selected or repaired before it can be delivered to the buyer, no title passes until this has been done. When goods are ordered which are to be shipped by a common carrier or otherwise, and there is no stipulation to the contrary, the title passes immediately upon delivery to the carrier, and all damage to the goods after that are at the risk of the buyer. If the buyer does not wish to assume this risk, he should specify that the delivery is to be made to him at a certain place. When an article which is ready for delivery is sold and the price agreed upon and nothing is said in regard to delivery, the title usually passes without a delivery if the article is paid for or credit is expressly extended. If it is agreed that there shall be payment on delivery then title ordinarily will not pass until payment. When nothing is said in regard to payment, the law