SALE OF PERSONAL PROPERTY.

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1 SALE OF PERSONAL PROPERTY.

SALE OF PERSONAL PROPERTY. BOOK I. OF THE CONTRACT OF SALE: ITS FORMATION. CHAPTER I. DEFINITIONS. 1. Sale defined. 2. -- Forms of bargaining. 3. -- Effect of intention. 4. -- Essential elements. 5.

2 SALE OF PERSONAL PROPERTY. BOOK I. OF THE CONTRACT OF SALE: ITS FORMATION. CHAPTER I. DEFINITIONS. 1. Sale defined Forms of bargaining Effect of intention Essential elements. 5. Further of the definition - Executory or executed sales Bargain and sale. 7. Absolute and conditional sales. 8. Voluntary ancl forced sales. 9. Judicial sales. 10. Public and private sa:les. 1. Sal e defined.- A sale of per on al property is the transfer, in pursuance of a valid agreement, from one party, called the seller, to another, called the bityer, of the general or absolute title to a specific chattel, for a price, or a consideration estimated, in money \fr. Benjamin, ales, 1, says: another, in consideration of a sum "It may be defined to be a transfer of money to be paid by the vendee of the absolute 01 gene1 al property to the vendor." Long on Sales, 1. in a thing for a price in money." Story (W. W.) says: "A sale is a Black. tone defines it as "a trans- transfer of the absolute title to propmutation of property from one man erty for a certain agreed price." to another in con ideration of some Story on Sales, 1. price." 2 Bl. Com Kent de- Tiedeman defines it as" a contract fines it as "a contract for the trans- or agreement for the transfer of the fer of property from one person to absolute property in personalty from another for a valuable consideration." one person to another for a price in 2 Kent's Com. 46. money." Tiedeman on Sales, 1. Long's definition is "a tran fer- Engli h Sale of Goods Act : ring of property from one person to "1.- (1) A contract of sale of goods 3

3 1.J L.A. W OF SALE. [BOOK I. The essential elements here involved are that there must be (1) a transfer, of (2) the general or absolute title, to (3) a specific chattel, for (4) a price in money or a consideration estimated in money. Sale is pre-eminently the transfer of the title. This transfer may ensue at once as the immediate effect of the present agreement of the parties; or it may be the postponed result to ensue in future from the present agreement of the parties aided or completed by some subsequent act or event, such as the lapse of time or the performance of precedent conditions. In either case the sale takes place only when the title passes. Sale means, moreover, the transfer of the absolute or general title. There may be other transfers, of limited interests, such as the right of possession or some special property in or lien upon the goods; but these, as will be seen, 1 do not constitute a sale. There can clearly be no present sale until the specific chattel has been ascertained and identified. There may be bargainings concerning the future sale of a chattel not yet in existence, or not yet ascertained; but these bargainings, as will also be seen, 2 cannot ripen into sale until in some way the particular chattel has been ascertained. There may be transfers of title for some other consideration f than a price in money; but no transfer, as will further be seen,3 is entitled to be denominated a sale unless it be for a price in money, or at least a consideration estimated in money. is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price. There may be a contract of sale between one part-owner and another. (2) A contract of sale may be absolute or conditional. (3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale; but where the transfer of the 4 property in the goods is to take place at a. future time or subject to some condition thereafter to be fulfilled, the contract is called au agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred." 1 See post, ch. II. 2 ee post, Book II, ch. IV. 3 See post, ch. V.

CH. 1.J DEF!!TIO S. [ 2, 3. 2. -- Forms of bargaining.-the bargainings of parties respecting a transfer of title may take a variety of forms.

4 CH. 1.J DEF!!TIO S. [ 2, Forms of bargaining.-the bargainings of parties respecting a transfer of title may take a variety of forms. Thus, (1) there may be an agreement whose legal effect is the immediate transfer of the absolute or general title. This is a sale, called sometimes for the purpose of further distinction, a present sale, an executed sale, or a bargain and sale. Or (2) there may be an agreement whose legal effect is that the title shall not pass until a future time, either because, in the case of an ascertained chattel, something remains to happen or be performed which the parties have treated as precedent, or because the particular chattel whose title is to be so transferred has not yet been ascertained. This is an agreement to sell, called often, for purposes of further distinction, an executory sale. I t does not become a sale until the precedent event has happened or the condition has been performed. It then becomes a sale by force of the present agreement aided or completed by the happening of that event or the performance of that condition. Or (3) there may be still another form of agreement, namely, the parties may now agree that at some future time stated they will come together and enter into another specified agreement either for a then present sale or for a then future sale. In this case it is not the intention of the parties that the title shall now or then pass as the legal result of the agreement now made, but only that they will then enter into another specified contract which shall operate to pass the title either then or at some other time agreed upon. In other words, adopting the distinction adverted to above, there may be either (1) a present sale, or (2) a present agreement for a future sale, or (3) a present agreement for a certain future agreement to sell. I n all of the forms of bargaining here referred to, however, it is clear that one result is aimed at, namely, the transfer of the title, or a sale E ffect of intention.-whether in any given case the bargainings of the parties shall amount to a present sale, or only to an agreement to sell, depends often and largely 5

5 4.J J,A W OF SALE. [BOOK I. upon the intention of the parties. There are, however, certain conditions or circumstances which conclusively determine their intention, while others raise a primafaoie presumption concerning it. Thus, where the contract has reference to a chattel not then designated, it cannot, in the very nature of the case, fall within the category of present sales, and no title will pass until the chattel has been ascertained. 1 But where the contract has reference to a chattel then existing, designated and ready for deli very, a presumption arises that a present sale was contemplated and the title will therefore be presumed to pass at once. 2 This presumption, however, is not conclusive, and it may be shown that the parties intended that the title should not pass until some future time or the performance of some future act, and their intention will be given effect. 4:. -- Essential elements.-the essence of the bargainings concerning sale is, therefore, the agreement or assent of the parties to the present or future transfer of the title to a chattel either now designated or afterwards to be ascertained. Unlike the case of real estate, no deed, conveyance or other formality is, in general, necessary to give effect to the intention of the parties; when the contlitions are ripe for the transfer, the law itself executes their intention by deeming the transfer as made in conformity to their assent. This assent, moreover, need not be express, but may be inferred from the acts and conduct of the parties. Another element, often appearing in conjunction with this element of assent, is that of the surrender of the possession of the chattel by the seller and the assumption of that possession by the buyer - constituting what is commonly spoken of as the delivery of the chattel. This element, though very common, and apparently often regarded as e sential, is by no means indi pensable; for there may clearly be a completed sale of the property, though the seller retains the po s ssion; and there may also be a complete change of possession without any corresponding change of title. 1 See post, Book II, ch. IL 2 See post, Book II, ch. IV. 6

6 CH. I.] DEFINITIONS. [ 5. A third element, also, often appearing with the others, is that of payment. But payment is by no means a necessary concomitant of the transfer of the title; for the property may be paid for before the title passes, or contemporaneously with its transfer, or at any time thereafter. 5. Further of the definition - Executory or executed sales.-the word sale, remarked the supreme eourt of the United States in a leading case, 1 "is a word of precise legal import, both at law and in equity." Unfortunately, however, this precision of meaning is a condition rather to be desired than as yet actually attained, for it seems impossible for courts and text-writers to agree either as to the meaning of the word or as to the essential elements of the idea it represents. According to some, the sale is the tranifer of the title; according to others, it is the agreement to transfer. 2 In the case of the agreement for a present transfer, where the law executes the agreement by deeming the title as transferred accordingly, it can be matter of small moment whether the word be applied to the agreement or to the transfer, because the making of the former operates at once to effectuate the latter; but where time, or the performance of conditions, is to intervene between the agreement and the transfer, it is necessary to have appropriate words to indicate these two ideas. It is, indeed, true here that the effectual thing upon which the law operates to produce the transfer is still the agreement of the parties; but before the law so operates, the agreement of the parties requires to be aided, supplemented or completed by the lapse of time or the performance of conditions precedent, and during this interval the attitude or relation of the parties needs often to be de.finitely determined. That the difference in lega~ffect between a mere agreement to transfer title hereafter an~a present transfer of it, is radical l Williamson v. Berry (1850),8 How. which the buyer pays or promises to ( 49 U. S.) 495, 544. "It means at all pay to the seller for the t hing bought times," continued the court, "a con- and sold." tract hetween parties to give and to 2 Compare the definitions collected pass rights of property for money- in the note to the preceding section. 7

6.] LAW OF SALE. (BOOK I. requires no argument to establish. "By an agreement to sell," it has been said, " a j us in persona;m is created; by a sale afus in rem is transferred.

7 6.] LAW OF SALE. (BOOK I. requires no argument to establish. "By an agreement to sell," it has been said, " a j us in persona;m is created; by a sale afus in rem is transferred. If an agreement to sell be broken the buyer has only a personal remedy against the seller. The goods are still tho property of the seller, and he can dispose of them as he likes; they may be taken on execution for his debts, and if he becomes bankrupt they pass to his trustee. But if there has been a sale, and the seller breaks his engagement to deliver the goods, the buyer has not only a personal reme<ly against him, but also the usual proprietary remedies against the goods themselves, such as the action for conversion and detinue. In most cases, too, he can follow the goods into the hands of third parties. Again, if there be an agreement for sale and the goods perish, the loss falls on the seller; while, if there bas been a sale, the loss, as a rule, falls on the buyer, though the goods have not come into his possession." Bargain and sale.-the common law clearly recognized these two forms and applied to each a well-known name. Thus, "if, by the terms of the agreement, the property in the thing sold passed immediately to the buyer, the contract was termed in the common law' a bargain and sale of goods;' but if the property in the goods was to remain for the time being in the seller, and only to pass to the buyer at a future time, or on the accomplishment of certain conditions, as, for example, if it were necessary to weigh or measure what was sold out of the bulk belonging to the vendor, then the contract was called in the common law 'an executory agreement.'" 2 The attempt to distinguish these forms has frequently been made by applying the term" executed sale" to the former and "executory sale" to the latter; but this attempt bas not proved entirely satisfactory, not only because the terms have not always been used in the same sense, but because even the socalled "executed sale " may be executed in part only; that is, so far as to pass the title, while it remains executory in part, as where delivery or payment is postponed. 1 Chalmers on Sale, 3. 2 Benjamin on Sales (6th Am. ed.), 4. 8

8 CH. r.j DEFINITIONS. [ 7. The English Sale of Goods Act of 1893 distinguishes thus: "Where, under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called a sale; but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred." 1 This phraseology is probably as satisfactory as any, and is substantially that herein adopted. Assuming the general meaning of the term to be thus agreed upon, it may be convenient, before going further, to consider briefly certain special forms or classifications of sale, and to determine whether they lie within or without the scope of the present treatise. Thus - 7. Absolute and conditional sales.-a variety of classifications may be made, based upon the absolute or conditional character of the contract of sale. Thus, in accordance with one basis of distinction - which is really that at the foundation of the distinctions made in the preceding sections between a sale and a contract to sell, between executed and executory sales-a sale is said to be absolute" which has been completed or perfected; a sale outright;" while a conditional sale is one which " takes e:ff ect or is to become complete on the performance of a condition." 2 But this so-called absolute sale may be ubject to a condition subsequent, as where there is a "completed or perfected" change of title, i. e., ''a sale outright," subject to be defeated by the non-performance of some annexed condition. There may clearly, also, be an absolute contract to sell, as well as a conditional contract to sell. There is also a form of contract, more fully to be discussed 1 Sec. 1, par. 3 and 4. "The fund~ it does not." Blackwood v. Cutting mental difference between a sale, properly so called, and an agreement to sell is that in the former case the Packing Co. (1888), 76 Cal. 212, 18 Pac. R. 248, 9 Am. St. R Anderson's Law Dictionary, 915. title passes, while in the latter case 9

9 8, 9.J LAW OF SALE. (BOOK I. hereafter,1 popularly known as a "conditional sale," which is really a contract to sell upon the performance of certain conditions by the purchaser, the most usual of the conditions being the payment of the price. 8. Voluntary and forced sales.- Sales are also often further classified as voluntary or forced. A voluntary sale, as its name implies, is one which is voluntarily made, as when it is made by or under the authority of the owner of the goods. A forced or involuntary sale is one made, not of the volition of the owner, but by the authority and jn pursuance of the law. 2 Of this kind are the great variety of sales made by public officers, such as sheriffs', guardians' and executors' sales, as well as the judicial sales which will be hereafter defined. A sale, though made by a public officer, is not a forced sale when it finds its authority in the consent of the owner, as where a sale is made under a power of sale expressly created by a mortgage; 3 or where the owner consents to the sale of that which could not lawfully be sold without his consent, as when he consents to the sale of exempt property upon an execution Judicial sales.- Closely allied to the distinctions of the last section is the subject-matter of this one. A judicial sale is one made by virtue and in pursuance of an order or decree of a court of competent jurisdiction, and by its duly authorized officer. 5 1 See post, Book II, ch. III. 2 In Sampson v. Williamson (1851), 6 Tex. 102, 55 Am. Dec. 762, it is said: "A forced sale has been defined to be a ale made at the time and in the manner prescribed by law, in virtue of an execution issued on a judgment already rendered by a court of competent jurisdiction: Dufour v. Camfranc, 11 Mart. (La.) 610, 13 Am. Dec. 360; Donaldson v. Rouzan, 8 Mart. N. S. 163; Macdonough v. Elam, 1 La. 491, 20 Am. Dec. 284; or, in other i.vords, a forced sale is one which is 10 made under the process of the court and in the mode prescribed by law. Civ. Code La., arts. 2580, 2594, 2595." 3 Patterson v. Taylor (1875), 15 Fla Cf. Sampson v. Williamson, siipra. 4 Peterson v. Hornblower (1867), 33 Cal :>Lawson v. De Bolt (1881), 78 Ind. 564; Terry v. Cole (1885), 80 Va. 701; Williamson v. Berry (1850), 8 How. (U. S.) 507; Moore v. Shultz (1850), 13 Pa. St. 98, 53 Am. Dec. 446.

10 CH. I.] DEFINITIONS. [ 10. The law governing judicial sales constitutes a separate title of the law, and most of it lies outside the scope of this treatise, although some aspects of it will be considered hereafter. 10. Public and private sales.-a public sale is one made at auction to the highest bidder. A private ::;ale is one not made by public auction but by private negotiation. Private sales are al ways voluntary, but forced sales are always public. A voluntary sale may also be public at the pleasure of the owner. 11

c t SALE OF GOODS ACT

c t SALE OF GOODS ACT PLEASE NOTE This document, prepared by the Legislative Counsel Office, is an office consolidation of this Act, current to November 1, 2003. It is intended for information and reference