contractor wishes to sell the machine. The new buyer ought to have reasonable protection, and if he examines the records for recording or filing, has exercised reasonable diligence. The proprietor, the original seller, has not been diligent if he fails to record or file his contract in compliance with local requirements, and he loses his right to the machine.

This statement appears to put the matter right morally. The law, however, specifies what is necessary to be done, and in some States makes it criminal to unlawfully dispose of goods held under conditional sales. Whether he be seller or buyer, the engineer or engineering contractor should know the law in the State in question. In some States, there are "Factor's Acts" defining the legal status of goods in the hands of factors or agents, looking to the protection of third parties. In some States, possession is sufficient to give legal title against another in similar position without title.

WARRANTIES

Character of Warranty. An important subject connected with sales is that of "warranty," which is differentiated from a "condition" in that the latter goes to the substance of the contract and a breach vitiates it, while a warranty is a collateral undertaking or stipulation for the existence or truth of some fact relating to the thing sold. A failure or breach of the warranty does not void the sale; the buyer may hold the goods, and the seller have the right to the purchase money, subject, however, to the damages to which the buyer is entitled for the breach of warranty.

The warranty need not be in express terms; in determining whether a condition or a warranty, the best doctrine appears to be that technical and artificial rules shall give way to the intent of the parties as gathered from the contract, although this rule is not fully accepted.

Word not Essential. The word "warranty" is not essential; any statement of fact which the buyer relies upon as a material inducement serves the purpose. Statements of opinion, or puffing statements are held not to be statements of fact. Statements of value are opinions; but statements of selling prices are facts. Whether a sale by description involves fact or opinion is held one way by some courts, differently by others. Whether the seller's statement of fact is a warranty, depends upon the natural effect upon the mind of the buyer; if the seller declines to warrant, he saves the situation. The warranty need not, however, be the sole inducement in the sale.

Implied Warranties. Warranties may often be implied. There is an implied warranty of title, and engagement that the goods are, or that the goods when and if delivered, will be the property of the seller, free from encumbrance in favor of any third party, unless the contrary was

known to the buyer at the time of sale or of contracting to sell; also a guarantee of quiet enjoyment. In case of any disturbance of his title, a lawyer needs be consulted; the laws in different States vary as to status and remedy.

Goods by Sample or Description. In the case of sale by sample there is an implied warranty that the bulk shall correspond with the sample in quality and be free from defects not apparent on the reasonable examination previous to acceptance. Where goods are sold by description, there is an implied warranty that they answer the description; if by sample as well as description, the goods must conform to both sample and description. While reference has been made earlier to sales by sample and description, it should be understood that while goods may fail of acceptance if they are found not to be what was ordered, it often happens that the facts may not be at once obvious or discoverable in the ordinary course of business, and the implied warranty protects the buyer when the failure becomes evident, if the buyer has exercised due diligence.

Purpose of Article. In a similar way where the purpose of the article is known to the seller, whether a manufacturer or not, and the buyer relies upon the skill and judgment of the seller, there is an implied warranty of the fitness of the article for the purpose. In the purchase of machinery this is of importance, and the engineer may be interested, sometimes as buyer, sometimes as seller. Whether reliance was placed upon the seller or manufacturer and the purpose understood or properly conveyed, may sometimes present difficulties from the standpoint of evidence.

The custom and usage of the trade may provide such a warranty. There is an implied warranty that goods are of merchantable quality, and the warranty in some cases may extend to the future condition of the article. The warranty does not extend to sub-purchasers, and this is sometimes of importance.

On General Sale. Where articles on general sale are ordered by their customary or trade name, there is no such warranty, nor is there when the buyer has examined the goods, if such examination should have revealed the defect or unfitness; but otherwise if expert examination is necessary or if the buyer's inspection or examination was understood not to cover matters concerning which reliance was had on the seller's skill and judgment.

Remedy for Breach. While some States allow rejection and return of goods in case of breach of warranty, the rule is generally otherwise. The remedy is a suit for damages, and the measure of damages is the difference between the value of the actual article received and the value of the article as warranted.

In case of fraud, rather than breach of warranty, the contract will be void.

DUTIES OF BUYER

Title; Acceptance. Sometimes immediate title to goods seems desirable to the seller, but sometimes otherwise. The same is true as to the buyer. When the seller makes a tender of the goods, it is the duty of the buyer to accept and to pay the price on the terms agreed to; it is his duty to take the property at the agreed time, and time is often of the essence of the contract.

Acceptance gives title and cannot be revoked; in some States the buyer, however, may have a remedy for damages even after acceptance; this generally for defects not apparent at acceptance. In some cases acceptance of part is acceptance of all; it is a matter of intent, however.

Inspection. An opportunity, time, and place for inspection may be agreed upon; if there has been no specific agreement there must be a reasonable opportunity both as to time and place. Commonly the place of delivery is the place of inspection.

Objections; Delay. If formal and deliberate objections to acceptance in certain respects are made, other objections are held to be waived. If objections prove groundless, the title is then the buyer's. Rejection, if made, must be prompt; delay may be equivalent to acceptance. If goods are rejected the buyer is not under obligations to return the goods. When the buyer is to call for the goods, he must act within a reasonable time; if not, the seller may, at his option, at least rescind the contract. When title has vested, it is the buyer's duty to take the goods away. There is some question as to the remedy if he fails to do so.

Failure to Accept. A failure to accept goods when duly tendered gives the seller a right to damages, and in some States a right to the price from the buyer, the seller holding the property as trustee for the buyer while the title passes to buyer; a suit may be brought at once after the buyer repudiates his contract.

The measure of damages for non-acceptance is, ordinarily, the difference between the contract price and the market price at the time and place of delivery, if the latter be the lesser, unless an abnormal market price makes this improper.

Where there is a breach of contract to accept articles in process of manufacture, the measure of damages is the estimated profit on the completed articles less the profit on the incomplete article; a loss is algebraically a minus profit. When material has been secured but no work has been done, the difference between the estimated cost and the price is the

measure.

Seller's Lien. Sometimes the seller has what is called a seller's lien on goods sold. Since it is a misnomer for him to have a lien on his own

goods, title must have passed, the goods must be in the seller's possession or equivalent control, and the price must in some way be due, in whole or in part, except in case of bankruptcy. Possession of part only of the goods gives a lien on that part. A seller's lien may be in favor of a factor or agent and enforced by him as well as by his principal.

The lien may be waived, whether unwisely or not does not matter; sometimes this is done by giving credit, sometimes on the guaranty of some third party. Even in these cases, however, insolvency of the buyer revives the lien, and it is revived if the term of credit expires. If at any time the buyer tenders the price, the lien ceases.

Stoppage in Transit. In a somewhat similar way, the seller has the right of stoppage in transit; the right, fundamentally, rests on "the custom of merchants"; it is now well established. It is an unusual sort of right. It attaches after the seller has delivered the goods to the carrier, and thus parted with possession; it can be exercised only on the insolvency of the buyer. This is not necessarily insolvency in the technical sense, equivalent to bankruptcy, or a near equivalent. Insolvency here means inability to meet debts as they come due in the ordinary course of business. When it is clear that the buyer will be unable to pay when the price falls due, the right of stoppage in transit may be exercised.

The right ceases when the buyer, the consignee, obtains possession; and an arrangement between the buyer and the carrier by which the latter holds the goods as warehouseman, constitutes a control by the consignee which serves the purpose of possession; sufficient so that the right ceases.

Superior to Right to Attach. The seller's right of stoppage in transit is held superior to the right of creditors of the buyer to attach the goods; their right is no better than the buyer's; the same is true of a re-sale by the buyer during transit; the purchaser has no better right than the original buyer. But if the seller transfers to the buyer a bill of lading, the latter may then convey by re-sale a title better than the original seller then has; the delivery of the bill of lading has somewhat of the quality of a delivery of the goods, enough at least to protect the third party if the goods were transferred in good faith and for value. Such transference is also effective when made as a pledge or mortgage for security; the extent of the right which the original seller retains in the goods is then limited to such interest, if any, as the original buyer still retains in the goods pledged or mortgaged.

Termination of Transit. The termination of transit puts an end to the seller's right of stoppage, and it is not always a simple matter to fix the termination. The seller's right of stoppage applies only to a transit caused by the seller. A later transit caused by the buyer may follow the termination of the original transit. This original transit is ended when the goods

reach the buyer's possession or are in an equivalent control by the buyer. Delay by the carrier, or refusal to deliver, prolongs it; the end of the journey with the carrier does not terminate it in all cases, for placing the goods in a warehouse in the name of the seller, or subject to his order, leaves them still under his control. If the goods are placed in the name of the buyer, however, the transit is ended. In a bonded warehouse, it is a question of fact and status whether the goods have passed from the control of the seller; the courts tend to favor the seller in this matter. The buyer may tender performance of his obligation and thus terminate the right of the seller.

Exercise of Right. The right of stoppage in transit may be exercised by the seller by taking actual possession, by changing the consignment of goods, or by notice to the carrier or other party in temporary control of them. If the seller exercises his right of stoppage in transit, he must pay the costs of transportation of the goods in question, including redelivery if he orders this.

The exercise of this right simply restores the goods to the possession of the seller, subject to such further action as he may deem proper, or subject to tender by the buyer. In the case of perishable goods, the seller must take action to protect the interests of the buyer, and sell at once without notice; and he may do the same with other goods if the buyer is already in default. Authorities differ as to whether, under other circumstances, notice to the buyer is necessary before re-sale. It is the part of wisdom to be on the safe side and to give notice of time and place of re-sale, if practicable, and also to have at hand evidence as to the facts which justified the stoppage in transit. An entirely legal re-sale gives good title.

Delay by Buyer. Unreasonable delay on the part of the buyer, rejection of goods which conform to contract, refusal to receive goods after title has passed, all justify a rescission of contract by the seller, and may thus give the seller his right of stoppage in transit. The seller may rightly prefer to retain the goods rather than to re-sell at once, as this leaves him the remedy of damages against the buyer. Sometimes the buyer rejects goods which really conform to contract, refuses to receive them, or takes measures to prolong transit, doing this to protect the seller rather than other creditors, and the courts have sometimes commended such action.

THE RISK

Relation to Title. The risk of loss or damage normally goes with the title; but, by agreement, the title and the risk may be separated. In general, however, unless otherwise agreed, the risk is in the seller until the