The second sub-section of the English statutory provision relating to the recovery of the price provides that the price may be recovered where it is payable on a day certain, irrespective of delivery, although the property in the goods has not passed. It is a matter of construction in every case whether the price is payable on a day certain, irrespective of delivery. The contract will rarely so provide in terms, and the proper construction must generally depend upon the relative time fixed by the contract for performance on one side and the other. The rules of construction applicable here are the same which are applied to contracts generally. Contracts to sell, indeed, present a typical case for the application of the doctrines of implied conditions. Unless there is ground for a contrary supposition, courts will assume that the payment of the price and the delivery of the goods were intended to be concurrent acts, and the obligation of each party to perform will be dependent upon the simultaneous performance by the other party. Even though a date be fixed for the performance on one side, and no date fixed for the counter-performance, the same principle will be applied unless there is something in the contract or surrounding circumstances to show that the performance for which the time was not fixed could not in its nature be given, or was not intended to be given on the same day as the performance for which the time was fixed. If, however, different times are fixed for the payment of the price and the delivery of the goods, the general rule, undoubtedly, is that adopted from Lord Holt's opinion in Thorpe v. Thorpe, that the act which is by the contract to be performed first is absolutely due on that day, while the performance which is to take place on a later day is not due unless as a condition precedent the prior performance has been rendered. Generally, if performance by either buyer or seller is to precede the performance

1 Cole v. Swanston, 1 Cal. 51; Merrill Furniture Co. v. Hill, 87 Me. 17; Haskins v. Warren, 115 Mass. 514, 533; Southwestern Freight Co. v. Stannard, 44 Mo. 71; Whitman Agricultural Ass'n v. National Ass'n, 45 Mo. App. 90; La Mont v. La Fevre, 96 Mich. 175; Walter v. Reed, 34 Neb. 544; Chapman v. Lathrop, 6 Cow. (N. Y.) 109; Wabash Elevator Co. v. First Nat'l Bank, 23 Oh. St. 311; Cleveland v. Pearl, 63 Vt.

127.

2 Morton v. Lamb, 7 T. R. 125; Brennan v. Ford, 46 Cal. 7, 16; Sanborn v. Shipherd, 59 Minn. 144; Dunham v. Pettee, 8 N. Y. 508.

3 12 Mod. 455. Lord Holt was considering only when the word "for" or its equivalent made a promise conditional, but the rules he laid down were adopted in Serjeant Williams' notes to Pordage v. Cole, 1 Wms. Saund. 3191, as applicable to all mutual promises irrespective of the word "for." Lord Mansfield's decision in Kingston v. Preston, 2 Dougl. 689, clearly warranted this extension.

of the other, it is the seller's performance that will come first. It is common for sellers to give credit for the price. It is not common for buyers to give credit for the goods. It may, however, happen in a particular case that the buyer promises to pay the price before acquiring the title or even the possession of the goods. In such a case the provisions of sub-section (2) are applicable, and the seller is by the terms of the contract entitled to recover the price.

Apparently under the English statute this right to recover the price would not depend in any way upon the prospective performance, or failure to perform, of the seller. There can be no doubt that by agreeing to pay the price before the transfer of the goods the buyer agrees to take the risk of the seller's subsequent performance under ordinary circumstances. Let it be supposed, however, that it becomes evident, before the time for payment of the price, that the seller will not perform when the day comes for the delivery of the goods. It is a manifest injustice if the buyer must pay the price knowing that all he will get is a right of action against the seller. It is true the buyer has agreed positively to pay on the day, but he made that agreement on the assumption that the seller was going to perform subsequently, an assumption which is no longer justified. The cases, therefore, rightly excuse the buyer from his obligation to pay the price under these circumstances. The ground of the excuse is, in substance, failure of consideration, although the consideration of the buyer's promise is not the seller's performance but the seller's promise. The parties contemplate a double exchange. They exchange promises when the contract is made and they plan to exchange performances later. The fact that the performances are not to be simultaneous does not alter the fact that one performance is regarded as the price or exchange of the other. Accordingly there is in justice as good reason for excusing the party from whom the prior performance is due, when he will not get the subsequent performance from the other party, as there is for excusing the latter party when default of his co-contractor has already taken place. Prospective failure to receive the promised exchange, if the prospect is sufficiently certain, therefore should be, and in fact is, held by the courts to be as good a defense as a failure which has actually occurred.

Several classes of cases illustrate this. If the party from whom the second performance is due becomes insolvent, this is an excuse

to the other party.1 So a voluntary transfer to a third person of the property to which the contract related is an excuse, and rightly, inasmuch as this indicates generally both an inability and an unwillingness to perform.2 It has been suggested in some cases that the seller might regain the property before the time for performance and, therefore, the buyer should not be excused. It is always a question of fact what the prospects for the re-acquisition of the property by the seller are, but in an ordinary case it would seem that the disposition of the property by the seller both indicates a repudiation of his obligation, and also puts him in a position where, even though willing to perform subsequently, he could not do so unless the third person who bought the property consented to resell it. This is a contingency not within the original contemplation of the parties and the risk of which the buyer ought not to be compelled to run. For the same reason any repudiation on the part of the party from whom the subsequent performance is due, will excuse the party from whom the prior performance is due. The whole doctrine of allowing suit on a contract before the time for performance has come, in case of repudiation, was based in the leading decision on the necessity of giving the innocent party an excuse for not perform

1 Ex parte Chalmers, L. R. 8 Ch. 289; Bloomer v. Bernstein, L. R. 9 C. P. 588; Morgan v. Bain, L. R. 10 C. P. 15; Mess v. Duffus, 6 Comm. Cas. 165; Re Phoenix Bessemer Steel Co., 4 Ch. D. 108; Robertson v. Davenport, 27 Ala. 574; Brassel v. Troxel, 68 Ill. App. 131; Rappleye v. Racine Seeder Co., 79 Ia. 220; Hobbs v. Columbia Falls Co., 157 Mass. 109; Lennox v. Murphy, 171 Mass. 370, 373; Pardee v. Kanady, 100 N. Y. 121; Vandegrift v. Cowles Engineering Co., 161 N. Y. 435; Diem v. Koblitz, 49 Oh. St. 41; Dougherty Bros. v. Central Bank, 93 Pa. St. 227; Lancaster Bank v. Huver, 114 Pa. St. 216. See also Sale of Goods Act, §§ 18, 41. Cf. Ex parte Pollard, 2 Low. (U. S.) 411; Stokes v. Baars, 18 Fla. 656; Chemical Nat'l Bank v. World's Columbian Exposition, 170 Ill. 82; C. F. Jewett Pub. Co. v. Butler, 159 Mass. 517; Bank Commissioners v. New Hampshire Trust Co., 69 N. H. 621. In all these cases the seller's performance was first due, but there can be no difference in result when the buyer is first to perform.

The German Civil Code provides, § 321: one who is bound to the prior perform. ance in a bilateral contract, if the solvency of the other party is materially diminished after the formation of the contract, by means of which the claim for the subsequent counter-performance is endangered, may refuse to perform the obligation due from him until the counter-performance is rendered or security for it furnished."

2 Fort Payne Co. v. Webster, 163 Mass. 134; Meyers v. Markham, 90 Minn. 230; James v. Burchell, 82 N. Y. 108; Broadhead v. Reinbold, 200 Pa. St. 618. See also Leonard v. Bates, 1 Blackf. (Ind.) 172; Russ Lumber Co. v. Muscupiabe Co., 120 Cal. 521.

3 Garberino v. Roberts, 109 Cal. 125; Webb v. Stephenson, 11 Wash. 342. See also Joyce v. Shafer, 97 Cal. 335; Shively v. Semi-Tropic Co., 99 Cal. 259. These cases, like those in the preceding note, relate to real estate.

4 Ripley v. M’Clure, 4 Exch. 345.

ing or preparing to perform his promise.1 Though the reason given does not warrant the conclusion reached that the innocent party must have an immediate right of action, there can be no doubt of the correctness of the reason itself.2

Another illustration of the fact that the liability of the party who is to perform first is not so absolute as to be wholly independent of anything which the other party to the contract may do, is shown by the fact that if the party from whom the prior performance is due does not in fact perform until after the time when performance by the other party is due, his liability immediately becomes conditional on the performance of the later promise. The commonest illustration of this, perhaps, is where goods are sold on credit, but delivery has not been made when the term of credit expires. In such a case the seller's lien revives, or, in other words, the obligation of the seller to deliver becomes conditional on the performance by the buyer of his promise to pay the price. This application of the principle is universally admitted, and by the weight of modern authority in this country, at least, the broader principle is laid down that wherever suit is not brought for the earlier performance until after the time for the later performance, the defendant's liability becomes conditional on performance or tender of performance by the plaintiff.*

Conditional sales, so called, present the only class of cases where it is at all usual for the buyer to agree to pay the price before he acquires title to the property. In such sales the practice is for the

1 Hochster v. De La Tour, 2 E. & B. 678.

2 Wald's Pollock, Contracts, 3 ed., 361.

3 Sale of Goods Act, § 41 (1) (b). The statutory provision is based on the decisions of New v. Swain, I Dans. & L. 193; Bunney v. Poyntz, 4 B. & Ad. 568. So in this country, Leahy v. Lobdell, 80 Fed. Rep. 665, 667 (C. C. A.); McElwee v. Metropolitan Lumber Co., 69 Fed. Rep. 302 (C. C. A.); Robinson v. Morgan, 65 Vt. 37.

4 Hill v. Grigsby, 35 Cal. 656; McCroskey v. Ladd, 96 Cal. 455; Irwin v. Lee, 34 Ind. 319; Soper v. Gabe, 55 Kan. 646; Brentnall v. Marshall, 10 Kan. App. 488; Beecher v. Conradt, 13 N. Y. 108; Eddy v. Davis, 116 N. Y. 247; Shelly v. Mikkelson, 5 N. D. 22; Boyd v. McCullough, 137 Pa. St. 7, 16; First National Bank v. Spear, 12 S. D. 108; Hogan v. Kyle, 7 Wash. 595. See also McElwee v. Bridgeport Land Co., 54 Fed. Rep. 627 (C. C. A.). But see contra, Weaver v. Childress, 3 Stew. (Ala.) 361; Hays v. Hall, 4 Port. (Ala.) 374, 387; White v. Beard, 5 Port. (Ala.) 94, 100; Duncan v. Charles, 5 Ill. 561; Sheeren v. Moses, 84 Ill. 448; Gray v. Meek, 199 Ill. 136, 139; Allen v. Sanders, 7 B. Mon. (Ky.) 593; Coleman v. Rowe, 6 Miss. 460; Clopton v. Bolton, 23 Miss. 78; McMath v. Johnson, 41 Miss. 439; Bowen v. Bailey, 42 Miss. 405; Biddle v. Coryell, 3 Har. (N. J.) 377. See also Loud v. Pomona Land Co., 153 U. S. 564, 580; Bean v. Atwater, 4 Conn. 3; White v. Atkins, 8 Cush. (Mass.) 367; Kettle v. Harvey, 21 Vt. 301.

buyer to be given possession of the thing purchased; the seller retaining title, however, until the price is paid. Sometimes none of the price is paid at the time the goods are delivered; more frequently an instalment of the price is payable then and the balance of the price is payable either in instalments or as a whole at a later time. Such a transaction is in its essence analogous to a transfer of title to the buyer, and a mortgage back by the buyer to the seller in order to secure the price. If the bargain related to real estate, it would probably take that form. When it relates to chattels, largely, perhaps, because the value of the subject matter of the bargain is not great enough to make desirable formalities usual with real estate, the parties, as a short cut to reach the same result, generally provide that the seller shall retain title. He retains it, however, merely as security. The beneficial interest in the property, so far as is not inconsistent with the security of the seller, is vested in the buyer.1

In conditional sales the buyer, relying on his possession of the goods as sufficient to secure him for such portion of the price as he may pay before title passes to him, is content to pay part of the price in advance. He does not, however, in any common case pay any part of the price until delivery. For this reason

1 In Carpenter v. Scott, 13 R. I. 477, 479, speaking of such a sale, the court said: "Under it the vendee acquires not only the right of possession and use, but the right to become the absolute owner upon complying with the terms of the contract. These are rights of which no act of the vendor can divest him, and which, in the absence of any stipulation in the contract restraining him, he can transfer by sale or mortgage. Upon performance of the condition of the sale, the title of the property vests in the vendee, or, in the event that he has sold or mortgaged it, in his vendee or mortgagee without further bill of sale. Day v. Bassett, 102 Mass. 445, 447; Crompton v. Pratt, 105 Mass. 255, 258; Currier v. Knapp, 117 Mass. 324, 325, 326; Chace v. Ingalls, 122 Mass. 381, 383." In Chicago Railway Equipment Company v. Merchants' Bank, 136 U. S. 268, 283, while referring to notes each of which contained a statement that it was given for personal property the title to which should remain in the payee until the note was paid, Harlan, J., who delivered the opinion of the court, said: "The agreement that the title should remain in the payee until the notes were paid . . . is a short form of chattel mortgage. The transaction is, in legal effect, what it would have been if the maker, who purchased the cars, had given a mortgage back to the payee, securing the notes on the property until they were all fully paid. . . . The suggestion that the maker could not have been compelled to pay if the cars had been destroyed before the maturity of the notes, is without any foundation upon which to rest. The agreement cannot properly be so construed. The cars having been sold and delivered to the maker, the payee had no interest remaining in them except by way of security for the payment of the notes given for the price."

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The common statutes requiring a conditional sale, like a chattel mortgage, to be re corded, show a general recognition of the similarity of the two transactions.