"If parties intend that a debt shall be contingent, as in respondentia or bottomry contracts, then it will be so held by the Court. If, on the contrary, they intend that the debt shall be absolute, and fix upon the future event as a convenient time for payment merely, as where a drover purchases cattle, promising to pay for them on his return from market, overlooking the contingency that he may never return, then the debt will not be contingent; and, if the future event does not happen as contemplated, the law will require payment to be made within a reasonable time. The parties having neglected to provide for such a contingency, the law in this, as in many other cases, supplies the omission by implying such a promise as is necessary to do justice between the parties, such as we may fairly presume would have been made in fact, if the contingency had been thought of. In each case, the intention of the parties to make the debt contingent or otherwise, must be gathered from the language used, the situation of the parties, and the subject-matter of the contract, as presented by the evidence." 68 Cases where the risk of loss is thrown on a conditional buyer of chattels and (in some jurisdictions) on one who has contracted to buy real estate may also be considered in this connection; 69 since the buyer is there charged with the payment of a debt though a condition precedent to payment under the terms of the contract has not been complied with. So a party to a negotiable instrument whose liability is conditional on demand upon a prior party and notice of dishonor to himself may on occasion become liable when these conditions for good reason have not been complied with.70 156 Cal. 322, 104 Pac. 432, 25 L. R. A. (N. S.) 609. 68 DeWolfe v. French, 51 Me. 420, 421. See also Hogan v. Globe Mut., etc., Assoc., 140 Cal. 610, 74 Pac. 153; Ahlgren v. Walsh, 173 Cal. 27, 158 Pac. 748, Ann. Cas. 1918 E. 751; Rose v. McLeod, 2 Bay, 108; Langdell, Summ. Cont., § 36. Cf. Johnson v. Lyon, 75 Mich. 477, 42 N. W. 993; Bigler v. Hall, 54 N. Y. 167, 171, and see criticism of the latter case infra, § 1946, n. 69 See infra, §§ 928, 965. 70 See infra, §§ 1168, 1187. First Nat. Bank v. McConnell, 103 Minn. 340, 114 N. W. 1129, 14 L. R. A. (N. S.) 616, 123 Am. St. 336. Here, however, it may be said that the possible qualifications of the condition are implied in the original contract. § 800. Effect of a condition requiring valuation-Transfer of property. A common form of contract to buy and sell makes the price payable that which a certain valuer or valuers shall fix. The requirement of valuation is in such a case an express condition, or a condition implied in fact, qualifying the obligation of the buyer to pay the price. Instead of promising to pay a specified price or a reasonable price, he promises to pay such price only as the valuers shall fix. In the nature of the case this promise cannot be performed unless the valuation first takes place. Such a condition has sometimes been called a necessary condition, or an inherent condition.71 The valuation may also be a condition precedent to the transfer of the property in the goods. This, however, is not necessarily the case.72 Many sales are made without a fixed price, the law construing the contract as providing for a reasonable price. When a man orders a barrel of flour or a suit of clothes without bargaining about the price the title to the goods may pass and the goods be consumed before the price is determined. So a seller may transfer the property where the contract provides for valuation, though the price has not yet been fixed by the valuers. The question is one of intention.73 If an immediate transfer of the property was agreed upon, the buyer being credited for the price, the property will, therefore, pass. If, however, the seller's promise was executory, 71 James, L. J., in Ex parte Collins, peculiar to Roman jurisprudence, L. R. 10 Ch. 367, 372. 72 Williston on Sales, § 167. "There are, indeed, a few expressions in the cases which are at variance with the statement in the text that the property may pass. See Elberton Hardware Co. v. Hawes, 122 Ga. 858, 50 S. E. 964, and cases cited. These are based upon a misunderstanding of the Roman Law. In that law it was held that until the price was fixed by valuation the sale was null. This doctrine, however, was based on two rules of the Roman Law, neither of which exists in the Common Law. In the first place, for reasons there could be no sale without a fixed price. In the second place, no mere agreement of sale under the Roman Law transferred title to the property. Not only delivery but actual payment of the price was essential. Consequently, a sale in the Roman Law meant an executory contract, not a transfer of the property; and when the Roman lawyers say that the sale is null where no valuation has been made, they are not referring to the question of transfer of the property at all, but to the question of whether a valid contract to sell exists. it will generally be subject to a condition that the price be paid simultaneously with the transfer of the property. If such a condition exists, whether expressed or implied, it is obvious that no liability on the part of the seller can arise until the price is not only fixed by the valuation, but is also tendered. One may suppose a case, however, where the promise of the seller though executory is not subject to such a condition. For instance, if the seller agreed to deliver on a fixed date, the buyer to have thirty days' credit for the price, which should be determined by valuation. Even in such a case if it became evident before the time for the delivery of the goods that the valuation was not going to take place for any reason, the seller would be excused from performing his promise.74 Frequently it will not be apparent from the terms of the bargain at what moment the parties intended the property to pass, and for this reason resort must be had to rules of presumption. In England it is a rule of presumption that where the seller is bound to do some act in reference to the goods for the purpose of ascertaining the price, the property does not pass until such thing be done.75 This rule prevails in substance in many of the United States,76 and where it prevails it seems that the conclusion is justified that "strong proof would no doubt be required to show that an immediate sale was intended, for the transaction should be considered prima facie as an agreement to sell by analogy to that rule." " This rule of presumption, however, has been abolished in some of the United States,78 and has not been included in the American Uniform Sales Act. Accordingly, in jurisdictions where the rule is not in force, either because of the passage of the Sales Act or otherwise, the broad general presumption would be applicable that where there is an unconditional contract to sell specific goods in a deliverable state, the property in the goods presumably passes to the buyer when the contract is made. It may be argued that this is not an unconditional contract until the valuation is made, but the condition of valuation 74 See infra, § 875. 75 English Sale of Goods Act, § 18, rule 3. See Williston on Sales, § 266. 76 Williston on Sales, § 269. "Benjamin, Sale (5th Eng. ed.), 145. 78 Williston on Sales, § 269. seems properly attached to the obligation to pay the price rather than to the contract to sell the goods. The qualification of the seller's promise is simply that dependency which habitually exists in a contract to sell, namely, that failure of the buyer, actual or prospective, to fulfil his obligation will excuse the seller from his obligation.80 § 801. Failure of valuation without fault of either party. If the valuation fails without fault of either party, it must naturally follow that an obligation conditional upon such valuation cannot be enforced. A question may indeed be raised as to the meaning of the condition, and this has been suggested in the Civil Law, namely, whether the contract in naming a particular valuer fairly means more than to designate a "reasonable man" and, therefore, whether it is not within the terms of the contract to substitute another reasonable man for the one specially designated. Both the Roman Law 81 and our law have answered this question in the negative, and with reason. It must be assumed that the parties laid weight on the particular individuality of the valuer. Accordingly if the valuer either dies,82 or refuses to act,83 the buyer cannot be compelled to pay the price because of the condition in his obligation, and the seller, similarly, if he has not already transferred the property, cannot be compelled to do so, either because his promise to transfer is itself expressly conditional, or because the present or prospective failure on the part of the buyer to pay the price excuses the counter-obligation to transfer the property in the goods. If already transferred to the buyer before it appears that the valuation cannot be made, either party to the bargain should have the right to rescind it if the other party can be put in the same position which he was in See infra, §§ 812 et seq. 81 Justinian's Institutes, 3, 24, 1; Code, 4, 38, 15. See Moyle, Contract of Sale, 70. So Pothier, Contract of Sale, § 24, and the French Civil Code, Art. 1592. 82 Firth v. Midland R. R. Co., L. R. 20 Eq. 100. Thurnell v. Balbirnie, 2 M. & W. 786; Elberton Hardware Co. v. Hawes, 122 Ga. 858, 865, 50 S. E. 964; Stern v. Farah, 17 N. Mex. 516, 133 Pac. 400. See also Cooper v. Shuttleworth, 25 L. J. Ex. 114; Vickers v. Vickers, L. R. 4 Eq. 529; Milnes v. Gery, 14 Ves. Jr. 400; Wilks v. Davis, 3 Mer. 507; Hutton v. Moore, 26 Ark. 382; Fuller v. Bean, 34 N. H. 290. before the bargain was made.84 It may, however, happen that the buyer has made use of the goods or otherwise has become unable to restore them. In such a case the seller is entitled on principles of quasi-contract to recover the fair value of the goods.85 § 802. How far the valuation is conclusive upon the parties. In the absence of fraud or mistake, the price fixed by agreed valuers is conclusive upon the parties. In the Civil Law "if the valuer named fixed an outrageously unfair price, it is very generally held that it could be rectified by recourse to an action."86" § 803. Failure of valuation owing to the fault of either party. In any case where from its nature a contract requires some action by one party or the other, or the coöperation of both, there is an implied promise to perform the act or to give the coöperation even though the promise is not expressed.87 Accordingly if either party was to select a valuer or notify a man selected for a valuer, or submit property to valuation, and fails to do so, he has broken his contract. He is, therefore, liable 84 Benjamin, Sale (5th Eng. ed.,) 145. 85 Clarke v. Westrope, 18 C. B. 765; Alberton Hardware Co. v. Hawes, 122 Ga. 858, 865, 50 S. E. 964. See also Deyo v. Hammond, 102 Mich. 122, 60 N. W. 455, 25 L. R. A. 719. In that case plaintiff sold the defendant a horse for $800 cash, and an agreement by the defendant to pay an additional $100 if the horse could trot as fast as one owned by the defendant within ninety days; the test to be made by one M. The trial did not take place owing to the sickness of the horses. It was held, nevertheless, that the defendant was liable to pay the additional $100, it appearing from the evidence that the horse sold could trot faster than the other one, although no test had been made by M. or any one else since the sale. In this case it is to be observed that the defendant kept the horse beyond the period of ninety days, and also that the agreement itself showed the parties considered an additional $100 a reasonable amount if the horse had the speed which the evidence showed it to possess. The decisions in this note make it evident that there is no difficulty in title being transferred though the valuation does not and cannot take place. 86 Norton v. Gale, 95 Ill. 533, 35 Am. Rep. 173; New England Trust Co. v. Abbott, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271; Wilcox v. Young, 66 Mich. 687, 33 N. W. 765. 86a Moyle, Sale in the Civil Law, 70. So Pothier, Contract of Sale, § 24. But Bechman, Der Kauf, II, § 217, holds otherwise. 87 See infra, § 1293. |