An agreement, other than a sale, which requires for its performance the existence of a specific thing would doubtless be governed by the same principles. § 1561. A sale of specific goods is void if goods not in exist ence. In regard to the correctness of the principle of law stated in the first subsection of the statute just quoted there can be no doubt where the statute has not been enacted as well as where it is in force. There are not many decisions exactly in point,98 but no question has ever been raised in regard to the result, though different reasons have been suggested for treating the sale as void. Sometimes the result is put upon the ground of impossibilty, sometimes upon the ground of mistake, and sometimes on the lack of mutual assent owing to the mistake. So far as the existence of a sale is concerned, that is, the actual transfer of title to property, of course there is absolute impossibility. The real question, however, is whether the buyer and seller are excused from all liability. Even though there is no sale the seller may be liable on an obligation of warranty or contract," and similarly the buyer might be liable on an obligation to pay the price. No such obligation, however, exists on either side. Though the essential elements of a contract-mutual assent and consideration-exist, the promise of each party is subject to an excuse of which it must be assumed without acthe rest of the section is without analogy in the English Act. Hastie v. Couturier, 9 Ex. 102; s. c., on appeal, Couturier v. Hastie, 5 H. L. C. 673; Strickland v. Turner, 7 Ex. 208; Gibson v. Pelkie, 37 Mich. 380; Bates v. Smith, 83 Mich. 347, 47 N. W. 249. In the case first cited the parties purported to make a sale by means of bills of lading of a cargo of corn. In fact at the time the bargain was made the corn, owing to fermentation, rendering its future preservation impossible, had already been sold at an intermediate port by the ship's captain. It was held that the bargain was void and the purchaser not bound for the price. In Strick It was land v. Turner, the parties pur- 99 See infra, § 1934. tion on his part that he will necessarily wish to avail himself, so that the bargain is in effect void. The seller is excused from any such obligation by the doctrines both of impossibility and mistake. As the obligation would relate to a specific thing, the nonexistence of the thing, without his fault, excuses him.1 Apart from the doctrine of impossibility the mutual mistake under which the parties labored would excuse the seller from any obligation. On the part of the buyer there is no question of impossibility. It is entirely possible for him to pay the price. If the promise, however, was expressly or impliedly conditional upon the transfer of title, which would generally be the case, the nonperformance of this condition, for whatever reason, would necessarily excuse him. Even though his promise to pay the price was not conditional, the destruction of the goods for which the price was to be paid would be such failure of consideration as to excuse him from paying the price if he had not already paid it, and would justify him in recovering it if he had already paid it. The doctrine of mutual mistake would also excuse the buyer as well as the seller. It is not accurate, however, to say that there is no mutual assent; the parties do, in fact, assent to the same thing. The mistake which they make is ground for excusing them from the bargain they made. is not a ground for saying they never made a bargain." It § 1562. Partial destruction of the goods prior to the sale. The English Sale of Goods Act makes no provision in regard 1 Taylor v. Caldwell, 3 B. & S. 826. See also The Tornado, 108 U. S. 342, 2 S. Ct. 746, 27 L. Ed. 747; Arthur v. Blackman, 63 Fed. 536; Fresno Milling Co. v. Fresno C. & I. Co., 126 Cal. 640, 59 Pac. 140; School District v. Dauchy, 25 Conn. 530, 68 Am. Dec. 371; Terry v. Bissell, 26 Conn. 23; Walker v. Tucker, 70 III. 527; Price v. Pepper, 13 Bush, 42; Pinkham v. Libbey, 93 Me. 575, 45 Atl. 823, 49 L. R. A. 693; Wells v. Calnan, 107 Mass. 514, 9 Am. Rep. 65; Thomas v. Knowles, 128 Mass. 22; Gilbert & Co. v. Butler, 146 Mass. 82, 15 N. E. 76; Goldman v. Rosenberg, 116 N. Y. 78, 22 N. E. 259; Stewart Strickland v. Turner, 7 Ex. 208. to the case of deterioration or partial destruction of the goods unknown to the parties at the time they entered into a sale. The principles which govern the case are, moreover, not so simple as those which relate to total destruction. Several cases may be supposed, the simplest of which is that a portion of the goods is destroyed. In such a case it is impossible for the buyer to fulfil his whole bargain; and impossibility, without his fault, should excuse him, as in case of total destruction. The buyer also should be excused from liability to pay the price for the same reasons as those given in the preceding section. It may be, however, that the buyer wishes to take the goods that remain, in spite of the destruction of the remainder. If he so desires, he should have the right. Here it becomes important to observe that mutual mistake as to the existence of the subject-matter does not necessarily make the transaction void, but entitles the parties only to such relief as may be equitable. So, likewise, impossibility can excuse the seller no further than the impossibility in fact exists. The only doubt is, upon what terms the buyer may proceed. If a separate price was originally agreed upon for the goods which now remain, there seems no reason why the buyer should not be entitled to them upon paying this price, and so the Sales Act provides. To be sure the seller never agreed to sell those goods separately, though he agreed on a divisible price, but as the remaining goods which were the subject of the bargain are destroyed, the seller cannot well be put in a worse position than contemplated by the bargain if he is obliged to give up the remainder; he is not left with goods on his hands undisposed of. The buyer, however, even though the contract was divisible is not bound to take the goods unless he wishes. A part of the goods may not serve his purpose. Therefore, he has an option to take the goods or reject them. If the price for the goods which remain is not fixed by the contract, while the buyer may also claim the goods, he can claim them only according to the terms of the contract. The French Civil Code allows him to take them at a valuation, but this seems to force upon the seller a bargain which he did not make. See Scott v. Littledale, 8 E. & B.815, stated infra, n. 13. 7 Code Civil, Art. 1601. § 1563. Inferior quality of the goods. 8 Chalmers, (5th ed.), 20. Sale of Goods Act A more troublesome case arises where none of the goods are totally destroyed but all, or a material part of them, are inferior in condition to what the parties supposed when the bargain was made. In regard to such a case it has been said that "the only question is whether the article has been so far destroyed as no longer to answer to the description of it given by the contract," and this statement is warranted by the language of the leading English case. This language, however, was used at a time when the doctrines of implied warranty had not been developed. More than ten years later the same eminent judge who wrote the opinion in that case was unwilling to lay down broadly as a general rule of law that a seller impliedly ant that he had power to transfer her as a ship at the time of executing the deed was not broken." This decision may be supported. The action was upon a covenant and the decision depended simply on the question whether the defendant had broken that covenant. No question of mistake or failure of consideration could enter into the case. The language of Parke, B., however, goes farther than the case required. He said: "In the bargain and sale of an existing chattel, by which the property passes, the law does not (in the absence of fraud) imply any warranty of the good quality or condition of the chattel so sold. Parkinson v. Lee, 2 East, 314Keilw. 91; 1 Rolle's Abr., Action sur case (P.), pl. 4, p. 90. The simple bargain and sale, therefore, of the ship does not imply any contract that it is then seaworthy or in serviceable condition." At the present day it is clear that there would be a warranty of quality if the buyer had no opportunity of inspection, as was the case here. It seems also clear that the fact that the ship was aground at the time of the bargain was so material that the buyer could have rescinded the transaction on account of mistake. 'Barr v. Gibson, 3 M. & W. 390. In this case the defendant sold to the plaintiff, in England, by deed poll, a vessel, and covenanted that he had then "good right, full power, and lawful authority" to sell the same. At the time the transaction took place the ship was aground on the coast of the Prince of Wales island, and had been left by the crew. She was five feet above water on one side and with her masts standing. Her bulk ends were strained. If there had been facilities at hand, and it had been a different season of the year, she might have been got off and repaired. The captain, in fact, sold the ship as she lay for £10 three days after the sale to the plaintiff. The plaintiff sued the defendant in an action of covenant for breach of the covenant quoted above. The court held that the question was whether the subject of the transfer bore the character of a ship and held that "the ship did continue to be capable of being transferred as such at the time of the conveyance though she might be totally lost within the meaning of a contract of insurance. The covenant . . . of the defend warranted title to the goods sold, 10 and it was not until 1868 that the English court clearly stated the modern law of implied warranty of quality." The ground of implying a warranty of quality must be that the buyer is justified in assuming that the seller represents that the goods to which the bargain relates are merchantable, and such an implication is now made in many cases. At the present time, therefore, it seems clear that the test of whether an article answers the description of it given by the contract is not adequate. The description may be in such general terms as to be accurate and yet the quality of the goods may be materially inferior to what the buyer is entitled to expect. If no representation can be implied but both parties justifiably suppose that they are dealing with goods in ordinary merchantable condition, and the goods are not in such condition, whether because of some accident or because they never were in good condition, even though the circumstances are such that the seller is not liable as a warrantor, at least there is a mutual mistake of a material fact, which should excuse the seller from liability and justify the buyer in rescinding the transaction. It may well be that even under the English statute nearly this result would be reached by treating goods as having "perished" within the meaning of the Sale of Goods Act, "not only if they were physically destroyed, but also if they had ceased to exist in a commercial sense; that is, if their merchantable character as such has been lost." 12 It seems better, however, to reach the desired result directly than by putting an artificial meaning 10 Morley v. Attenborough, 3 Ex. 500. The case related to a sale by a pawnbroker and Parke, B., distinguished it from the case of an ordinary shopkeeper selling goods. "Jones v. Just, L. R. 3 Q. B. 197. 12 This suggestion is made in Benjamin, Sale (5th Eng. ed.), 140, citing several cases where freight was held not payable under a charter party requiring delivery of the goods as a condition, when the goods were SO deteriorated as to be unfit for the purposes for which such goods are ordinarily used. Duthie v. Hilton, L. R. 4 C. P. 138; Asfar v. Blundell, [1896] 1 Q. B. 123. See also Nickoll v. Ashton, [1901] 2 K. B. 126. This result was reached in Rendell v. Turnbull, 27 N. Zealand, L. R. 1067, under the New Zealand Sale of Goods Act (which is identical with the English Act in the section in question), where a lot of potatoes unknown to the parties at the time of the bargain had started "second growth" to such an extent as to be unfit for human food. See also infra, §§ 1569, 1570. |