Where goods are sold and delivered to a buyer with an option to return, the title passes to the buyer with a right in him to return them within the time agreed upon, or at least within a reasonable time if no time is agreed upon. In such a case, if the property is damaged or destroyed, the loss falls upon the vendee.30

If vendee puts it out of his power to return, as by selling or mortgaging the property, the sale becomes absolute.31 Sometimes instead of selling goods with an option to return, a buyer delivers them upon approval. In such case the title remains in the seller, and if the goods are damaged or destroyed without the fault of the buyer on approval, the loss falls upon the vendor. The buyer is not obliged to give his reason for returning the goods.32 He is the sole judge whether the goods suit him or not.33

§ 17. Illegal Sales. A sale is presumed to be legal until the contrary is shown. The illegality may be because the contract is regarded as against public policy or is expressly prohibited by statute. If, as has been said, a sale is valid at common law, it will be presumed valid wherever the common law prevails unless a statute exists to the contrary. But a sale based upon an illegal consideration or made illegal by statute is void; and if the sale is executory in character on both sides it cannot be enforced by either party. If the contract is executory on one side only, as, for instance, where a party has delivered goods or has paid money for goods to be delivered, it would seem that if the contract is void, an innocent party should be entitled to recover the money or the goods, and it has been so held where the illegal part of the agreement was wholly unexecuted. But after the sale is once fully executed, the courts will not be open to either party for relief, and will leave the parties where it finds them, at least where the illegality is malum in se. Again a sale may be of a thing lawful in itself, but if it is known that the thing is to be

80 Taylor v. Tillotson, 16 Wend. 494.

31 Lynch v. Willford, 57 Minn. 377, 59 N. W. 311.

82 Osborne v. Francis, 38 W. Va. 312, 18 S. E. 591. 33 Goodrich v. Van Nortwick, 43 Ill. 445.

used for an unlawful purpose, the contract of sale of it becomes void.34

In the case of Materne v. Horwitz,35 the facts were that both plaintiff and defendant were wholesale dealers in sardines. They entered into a written agreement by which the former was to sell and the latter to buy 400 cases of "Domestic Sardines", the individual boxes to have "fancy labels" upon them. By this was meant labels decorated in French style, containing a statement to the effect that the contents of the box had been packed in France in olive oil by the persons named on the label. Both the defendant and the plaintiff knew that the order was only for domestic sardines and that the French label was to be placed on the packages to make them appear to have been imported and hence make them salable at a higher price. When the plaintiffs came to deliver the goods, the defendant refused to receive them, and plaintiff sued to recover the price of the sardines. The court, by Miller, J., said:

"It must be assumed, we think, that the defendants knew when the agreement was made that they intended to purchase sardines of the kind that was tendered to them, and that the plaintiffs understood that the defendants knew it. It is also inferrable that the defendants entered into the agreement, to the knowledge of the plaintiffs, for the purpose of selling the goods to others in the condition in which they were when delivered. It is also evident that the labels were used to deceive the customers and not the contractors, and to obtain higher prices for the sardines. The plaintiffs procured and furnished the deceptive labels, after binding themselves by contract to do so, and this was done for an unlawful purpose, and with a view of furnishing goods for the market in a condition calculated to deceive the consumers who might purchase them. It is, therefore, apparent that it was part of the contract that an unlawful object was intended, of which both parties were cognizant, and that it was designed by them, under the contract, to commit a fraud and thus promote an illegal purpose by

34 Ruddell v. Landers, 25 Ark. 238, 94 Am. Dec. 719; Adams v. Couilliard, 102 Mass. 167.

85 101 N. Y. 469.

deceiving other parties. In such a case the courts will not aid either party in carrying out a fraudulent purpose."

Rule Where Illegality Is Statutory. If, however, the illegality consists in the violation of a statute, that is, if the illegality is not a malum in se but a malum prohibitum, it has been held that a vendor may seek relief in court. In Tracy v. Talmadge, 36 it appeared that the plaintiff had sold certain bonds to defendant, taking defendant's note therefor; that defendant was a corporation and was not authorized by law to purchase such securities, nor to give its notes in payment, and it appeared also that the bonds. were bought on speculation and that the plaintiff knew this situation. It was held that the mere knowledge of the plaintiff was not a good defense to an action for the price of the bonds, that the plaintiff and defendant were not in equal wrong, and as the transaction was not malum in se but merely malum prohibitum, the plaintiff was entitled to recover, Selden, Judge, saying:

"I consider it, therefore, as entirely settled by the authorities to which I have referred, that it is no defense to an action brought to recover the price of goods sold, that the vendor knew they were bought for an illegal purpose, provided it is not made a part of the contract that they shall be used for that purpose; and, provided, also that the vendor has done nothing in aid or furtherance of the unlawful design.

"The law does not punish a wrongful intent, when nothing is done to carry that intent into effect; much less, bare knowledge of such an intent, without any participation in it. Upon the whole, I think it clear, in reason as well as upon authority, that in a case like this, where the sale is not necessarily per se a violation of law, unless the unlawful purpose enters into and forms a part of the contract of sale, the vendee cannot set up his own illegal intent in bar of an action for the purchase money."

Sunday Sales. At common law, Sunday sales were not illegal. But statutes were early passed in England declaring such sales invalid. In the reign of James I., a statute 86 Pres., 14 N. Y. 162.

was passed forbidding any person: "To show, to intend to put to sale, any shoes, boots, buskins, slippers, or pantoffles on a Sunday upon pain of forfeiting 3s. and 4d. for every pair so sold or so shown or put to sale and also the value of the goods." The settlement of the New England States by people representing the Puritan movement in old England, whose idea of government was founded in large measure upon the Mosaic law, introduced strict observance of the Sabbath into this country.

The older States generally have statutes prohibiting labor and business on Sunday, and such statutes are still enforced to some extent. In the newer States there are either no statutes or they are regarded in many particulars as obsolete. Where a sale is fully executed on both sides on a Sunday and the property delivered and the money paid, the parties are held bound by the contract.

In some States there are statutory provisions requiring weights and measures used in sales to be sealed by a public official and there are regulations as to survey of lumber, or inspection of cattle before sale. In Massachusetts there are statutes forbidding the use of scales and measures not properly certified as correct and duly sealed by the proper official. Under such statutes there can be no recovery of the price of goods sold. In Massachusetts sales of articles like coal,37 meat,38 hay,39 and milk,40 have been held illegal when not in compliance with the statute and no recovery allowed thereon. In Georgia no contract for the sale of fertilizer is valid unless it is branded, tagged, and inspected according to the statute.41

The statutes of some States merely prohibit one from carrying on his "ordinary calling" on Sunday. Therefore, one may lawfully sell goods on Sunday, if such is not his regular business. If a Sunday sale is executory, in whole or in part, neither party to it can have any legal recourse against the other.

37 Levy v. Gowdy, 84 Mass. 320.
38 Smith v. Arnold, 106 Mass. 269.
39 Sawyer v. Smith, 109 Mass. 220.

40 Miller v. Post, 83 Mass. 435.
41 Sanders v. Johnson, 29 Ga. 526.

Option Sales, When Illegal. Sales of this character have come under popular condemnation because of their effect upon the normal market price of commodities. In all large cities, boards of trade exist, the members of which are supposed to be engaged in buying and selling commodities, such as wheat and corn and cotton. Some are, no doubt, legitimate traders, but others are nominal merchants, dealing in futures, which in reality are no more than bets that on a future day the price of a commodity will be a certain figure. Such "merchants" buy and sell on option contracts, which in form are contracts for the sale or purchase of commodities for future delivery at a fixed price. Each party to the contract has the option, instead of delivering or paying for the commodity, to pay the difference between the contract price and the market price on the day of delivery, the seller paying the difference if the market is higher than the contract price, and the purchaser paying it if the market price is lower. There is no delivery of goods and none is intended when the contract is made. Such a contract is a wagering contract and while not illegal at common law is generally made so today by statute. As such a contract is in form like a legitimate contract, extrinsic evidence is needed to show the real intention of the parties.

Under the prevailing weight of authority in this country, bona fide sales of goods for future delivery are not invalid, although the vendor at the time has neither title nor possession of the goods which he has contracted to sell, but which he expects to acquire before the time of delivery of the goods either by manufacture or purchase.