may be, it should be borne in mind, parts of larger contracts; and every contract is either executed or executory. A contract is executed when nothing more remains to be done. It is executory when something remains to be done in the future, to complete the contract. A contract may be executed on one side and executory on the other. Now, there is usually more to a sale than transferring titlesomething additional has to be done on one side or the other, or both. Therefore, an executed contract of sale may still be an executory contract. For instance, if A says to B, "I will sell you this horse for $100 and deliver him to you at your residence tomorrow noon, if you will pay me $100 on delivery," and B says, "I accept," that is an executed contract of sale, and title to the horse vests in B. But each party has something yet to do. A must deliver the horse at B's residence by the next noon, and B must then and there pay the $100. So that, although the sale of the horse is complete and title has passed, the entire contract, of which the contract of sale was but a part, is finally complete only upon the delivery of the horse and the payment of the price.

§ 12. Absolute and Conditional Sales. A contract of sale may be absolute or conditional. An absolute sale is one in which title passes at once, as in a bargain and sale. A conditional sale is one made upon condition. Conditions in a sale may be express or implied. Express conditions may be oral or in writing. Implied conditions may arise from the conduct or acts of the parties without words. Sometimes "acts speak louder than words," and "silence gives consent." If A sells to B as his own a horse belonging to C, who is standing by silent, C thereafter will be estopped from claiming title to the animal. Sales made over a bargain counter are upon the implied condition of cash upon delivery.

§ 13. Cash Sales and Credit Sales. A cash sale of specific goods is regarded as a bargain and sale and not a sale upon condition of immediate payment, though Kent22 holds

222 Kent Comm. 496.

the contrary, declaring "where no time is agreed on for payment, it is understood to be a cash sale, and the payment and delivery are concurrent acts, and the vendor may refuse to deliver without payment, and if the payment be not immediately made, the contract becomes void." The more widely accepted view is that the vendor can only rescind the sale, the contract being voidable only. By a custom of trade, there may be an implied condition on the purchase of goods that they shall be delivered free by the seller, as in the case of household supplies. Until this is done, the customer is not obliged to pay for the goods.

Where there is a sale upon credit of specific goods ready for delivery, the title may be reserved by the vendor until the price is paid, although the goods may be delivered. At common law, if such goods were subsequently sold again, the second vendee did not get good title against the owner.

§ 14. Conditional Sales. Tiedeman defines a conditional sale as "one by which the right of property in chattels is made to vest, to be modified or defeated upon the happening or not happening of some event." 23 No particular words are necessary to create a conditional sale, if the intention appears from appropriate words. The conditions in a sale may be precedent or subsequent.

Sale upon Condition Precedent. In conditional sales made upon condition precedent, no title vests until the condition is fulfilled; such, as has already been stated, is the method of selling goods upon the installment plan. Also in the case of a sale of goods upon approval, the title remains in the seller until the buyer signifies his approval, either expressly or impliedly. If he fails after a reasonable time to signify his approval, he will be regarded as having approved of the goods, and title will vest in him. If A takes B's automobile "on ten days' trial and approval", the title remains in B until ten days have elapsed, unless A sooner expresses his approval of the machine and signifies his acceptance of it. If he continues to keep the machine after ten days, although he give no expression of

23 Tiedeman on Sales, § 200.

his approval, the title will, nevertheless, vest in him.24 This is a common form of sale today.

Sale upon Condition Subsequent. In a sale upon a condition subsequent, title at once passes, but may later be divested. A contract of "sale or return" is of this character. A sells B an automobile, with a condition that if B shall find, within thirty days, that it is not suitable or adequate for his business, he may return it. The option granted to the vendee produces this effect.25

The distinction between a sale upon condition precedent and a sale upon condition subsequent was thus expressed in the case of Hunt v. Wyman:20

"An option to purchase if defendant liked is essentially different from an option to return a purchase if he should not like. In one case the title will not pass until the option is determined; in the other the property passes at once subject to the right to rescind and return."

A sale of personal property on condition that the vendee may return the article in a specified time, becomes absolute, if the vendee so misuse the property during that time, as materially to impair its value; and the vendor may recover the price in general assumpsit for goods sold.

The case of Ray v. Thompson involved the sale of a horse which became disabled in the possession of the defendant who subsequently desired to exercise his option to return.27 The court said:

"The sale was on a condition subsequent; that is, on condition he did not elect to keep the horse, to return him within the time limited. Being on a condition subsequent, the property vested presently in the vendee, defeasible only on the performance of the condition. If the defendant, in the meantime, disabled himself from performing the condition-and if the horse was substantially injured by the defendant by such abuse, he would be so disabled-then the

24 Delamater v. Chappel, 48 Md. 244; Forsaith Machine Co. v. Mengel, 99 Mich. 280, 58 N. W. 305.

25 Buswell v. Bicknell, 17 M. 344.

26 100 Mass. 198.

27 12 Cushing (Mass.) 281.

sale became absolute, the obligation to pay the price became unconditional."

§ 15. Conditional Sales and Chattel Mortgages. Numerous sales of goods today are made upon the installment plan of payments, that is, small partial payments at stated intervals. To secure such payments as well as to preserve the vendor's claim on the goods and to prevent their sale by the vendee, it is customary for the vendee after purchase to execute a chattel mortgage back to the vendor.

In the theory of the common law, a mortgage of personal property was an absolute transfer of the property with a condition subsequent. The condition subsequent was the payment of a precedent debt owing from the grantor to the grantee, to secure which the mortgage was given. If the debt was not paid at the appointed time, then the title vested absolutely in the grantee, although the property might be worth more than the amount of the debt. The injustice of allowing a grantee to secure title to valuable property in this manner on default of payment led in time to the intervention of courts of equity. Such courts, looking at the heart of the matter, construed the transfer as a conditional sale, and allowed the mortgagor a right of redemption of his property. The period of redemption is regulated by statute so that no fixed time of redemption can here be stated.

While a chattel mortgage is in the nature of a conditional sale, it is in a class by itself, and is distinguished from other conditional sales in that the consideration is in the shape of a debt, and also in the right of the mortgagor to redeem his property on the payment of the debt, which as a general rule is less than the value of the property mortgaged.

At common law a chattel mortgage was not required to be in writing, but the seventeenth section of the Statute of Frauds makes a writing necessary, if the amount involved is large enough, because a sale under a chattel mortgage is regarded as a species of conditional sale. Statutes of the various States have added to this condition of

a writing the further condition that the writing be recorded in a book of public record to make it binding on third persons in the way of notice.

Effect of Recording Chattel Mortgage. When recorded a chattel mortgage is notice to all the world of the conditional transfer of the property to the transferee. The mortgage must follow the prescribed form of the statute, both in its contents and in the manner of its recording. When it is duly drawn and recorded, a purchaser of the property from the mortgagor takes no paramount title to it, as he is presumed to have taken with knowledge of the mortgage.

Another effect of recording the instrument is to enable the mortgagor to retain the property in his possession without raising the presumption of fraud that existed at common law when the property was retained by a vendor.

Under the common-law view of a chattel mortgage, the mortgagee was entitled to possession of the mortgaged property theoretically upon the execution and delivery of the mortgage. But as the mortgage was intended as a security only, the intention of the parties was that the property should remain in the hands of the mortgagor. It was generally provided by stipulation that the mortgagor should retain the right of possession until default or foreclosure. This is the general rule today, and the mortgagee is entitled to possession only after default of the mortgagor, and then not until after he has foreclosed the mortgage, that is, barred the mortgagor's right to redeem the property, or until he has exercised his right of sale, if the mortgage confers that right.2

28

§ 16. Sale on Approval and Sale or Return. Sales on approval and sales or return are sales made respectively on conditions precedent and conditions subsequent. Their nature has already been indicated.

In the absence of an agreement to do so, the buyer is not obliged to return goods sold on approval or with right to return.29

28 See Article on Mortgages.

29 Ex. Vent. Co. v. Ch. M. & St. P. Ry. Co., 69 Wis. 454, 34 N. W. 509.