that B shall authorized C to sell. There are two inconsistent provisions, have title, and that C shall sell and give good title. The latter must prevail as to an innocent purchaser from C. 10. B sells goods to C, who gives B in payment a bill of exchange accepted by X. It turns out that the bill is fictitious, no such person as X being in existence. C resells and delivers the goods to D, and B then seeks to recover the goods from D. He cannot do so. B has a right to rescind the contract with C for fraud and recover the goods while in C's hands. But he cannot recover them from D, who has purchased in good faith from C. 11. B, claiming to act as agent for C, buys goods of D for C, and they are shipped to C. B had no authority and was an impostor. When the goods arrive, B, claiming to act for C, obtains them of the carrier, and then himself sells them to C and receives the price. D now asks C to pay him and C refuses. D then brings an action to recover the goods. It is held (1) D sold to C if to any one, not to B; (2) as B had no authority to act for C, and as C refuses to ratify B's unauthorized act, there was a sale by D to no one; (3) as B never had any title to the goods he could confer none on C, and therefore D may recover the goods. 12. B is induced by fraud to sell goods to C, who then transfers them to D in payment of a prior debt owing by C to D. B rescinds the contract with C and seeks to recover the goods from D. In New York B may recover, as it is held that D is not a purchaser for value. In England D is held to be a purchaser for value and B cannot recover the goods. 4. For a money consideration called the price. A sale differs from a barter in that in a sale the consideration must be in money, while in a barter it may be other goods, labor, or the like. It is not necessary that the price should be fixed by the contract. It is enough if it is ascertainable, and it may be ascertained by the ordinary market price, or left to some third person to fix or determine. 5. Bill of sale. A bill of sale is a formal document, corresponding to a deed of real property, whereby the seller transfers to the buyer the title to specified goods and (usually) warrants the title. It is used in sales of any considerable amount, but may be used in any sale. 46. Statute of Frauds. The seventeenth section of the Statute of Frauds provides that contracts for the sale of goods of the value of £10 ($50) or more must be evidenced either (1) by the acceptance and receipt of the goods or part of them, or (2) by the payment of some part of the purchase price, or (3) by some note or memorandum in writing signed by the party to be charged or by his lawful agent (see sec. 22 ante). 1. What are goods? The English statute uses the phrase "goods, wares, or merchandise." Under this it was held that the sale of choses in action, that is, shares of stock, contract claims, etc., need not comply with the statute since they were not "goods, wares, or merchandise." The holding in the United States has been generally to the contrary. In many states the statute now expressly names "choses in action," and in many the term "personal property" is substituted. 2. Distinction between contract of sale and contract for work and labor. It is sometimes difficult to tell whether a contract is one of sale or one for work and labor. If the former, it must satisfy the statute; if the latter, it is not within the statute at all. Example 1. A goes to B's carriage factory and orders B to make a carriage according to a certain description, for which A agrees to pay $250. When it is finished A refuses to take it and pleads the Statute of Frauds. Is this a contract of sale? If so, B cannot recover against A because there has been no receipt of goods, no part payment, and no note or memorandum in writing. Or is it a contract for work and labor? If so, B may recover against A because such a contract is not mentioned in the Statute of Frauds and is therefore good however made or evidenced. There are three different rules that have been applied to solve this problem. (a) The English rule is that if the contract results in the transfer of title to a chattel it is a sale. Under this rule the contract specified is a sale and the statute is a good defense. (b) The Massachusetts rule is that if the article is such as the vendor in the ordinary course of his business manufactures for the general market the contract is one of sale; but if made to a special order for a special purchaser, and not for the general market, the contract is for work and labor. Under this rule the contract specified would be for work and labor and the statute would not be a defense. (c) The New York rule is that the chattel must be in existence when the contract is made in order that the contract should be a sale, and that although work may remain to be done upon it to adapt it to the buyer's needs, it is still a sale. Under this rule the contract specified would be for work and labor, because the chattel was not in existence when the contract was made. The English rule looks to the time of performance. The New York rule looks to the time of the formation of the contract. The Massachusetts rule looks to the nature of the contract itself. 3. Distinction between personalty and realty. It is also sometimes difficult to tell whether articles attached to lands or buildings are personal property or real property; for example, crops, trees, ice, fixtures, etc. In general, crops raised annually by labor are treated as personalty, while trees, perennial crops, and the like are treated as interests in land. Mineral products generally are realty, but ice has been held to be personalty. If the article sold is treated as realty, then whatever its value there must be a writing. If it is treated as personalty, there need be no formality unless it is of the value of $50, and then a writing may be dispensed with if there be part acceptance and receipt or part payment (see secs. 163, 164 post). Examples: 2. B sold C by parol a growing crop of five acres of turnips for $25, no present payment. B gathered the turnips when ripe and C claimed them. B pleads the Statute of Frauds. The statute does not apply. The turnips while growing, as well as when gathered, are personalty, and not an interest in lands. They are an annual crop, known to the law as emblements. 3. B sold a growing crop of hay to C by parol for $25, with no payment down. B gathered the hay. C claims it. B pleads the Statute of Frauds. Hay is not an emblement or annually planted crop. It is therefore an interest in land, and the contract is unenforceable for want of a memorandum under the fourth section. (But had the contract specified that the title was to pass when the hay was severed, this would have been an agreement to sell personalty, for it contemplated personalty as the subject-matter.) 4. Acceptance and receipt. One way of satisfying the Statute of Frauds is by an acceptance and receipt of the goods or a part of them, although this is not necessary to pass title. Both acceptance and receipt are necessary. Acceptance is signifying that the goods are in conformity with the contract. Receipt is taking the goods actually or constructively into the custody of the buyer. Examples: 4. B buys a quantity of wheat of C, who takes a load to B's warehouse, where it is inspected by B and accepted. B afterwards refuses to take the rest, and when sued pleads the statute. His acceptance and receipt of one load satisfies the statute and C may prove the contract for the whole. 5. Acceptance may take place without receipt. Thus, B inspects the wheat in C's granary and expresses his assent to becoming the owner. If this wheat be then delivered to a common carrier, as a railway company, for transportation to B by his direction, there is both acceptance and receipt because the carrier is regarded as agent of the buyer to receive, although not to accept. 5. Part payment. If one, instead of accepting and receiving the goods, pays any part of the purchase money, this also satisfies the statute, and he is bound by the contract. In a few states, among them New York, the payment must be made at the time of the making of the contract, but generally payment at any time is sufficient. 6. The note or memorandum. There need not be a full and detailed written contract. It is enough if it contain the names of the parties, the subject-matter of the sale, and the agreed price. It may be printed or written, and may be in pencil. It is best that both parties should sign it, for it is uncertain which may seek to avoid the performance. But it is enough that the one who is sought to be charged has signed. Example 6. B buys of C 20,000 feet of lumber at $10 a thousand feet. B signs the memorandum but C does not. C may maintain an action against B in case he refuses to take the lumber, but B could not maintain an action against C in case he refused to deliver it. If both had signed, then each could have enforced the contract against the other. An authorized agent may sign for either party. An auctioneer is the agent of both buyer and seller for the purpose of making the memorandum. The note or memorandum may be contained in two or more papers or letters constituting a connected series. It may be made at any time, and need not be made at the time the contract is formed. Some states require the memorandum to be subscribed, that is, signed underneath the writing. FORM OF CONTRACT OF SALE THIS AGREEMENT, made this fifth day of September, 1905, between John Doe, of Ithaca, N.Y., and Richard Roe, of the same place, WITNESSETH, that the said John Doe, in consideration of the agreement hereinafter contained, to be performed by the said Richard Roe, agrees to sell and deliver to the said Richard Roe, at the farm of the said John Doe, five hundred bushels of potatoes of good marketable quality, on the twentieth day of October, 1905. And the said Richard Roe, in consideration thereof, agrees to pay to the said John Doe the sum of sixty cents a bushel for the said potatoes, immediately upon the completion of the delivery thereof. IN WITNESS WHEREOF, the said parties have affixed hereto their respective signatures the day and year first above written. JOHN DOE. A much simpler form would satisfy the Statute of Frauds, which requires only a note or memorandum. For example: John Doe has sold to Richard Roe five hundred sixty cents a bushel, to be delivered Oct. 20, 1905. Ithaca, N.Y., Sept. 5, 1905. bushels of potatoes at JOHN DOE. If only Doe signed, he would be bound but Roe would not, and vice versa. II. THE TITLE 47. When does title pass? It is important to ascertain the time when title passes from the seller to the buyer. From that moment the risk of loss is on the buyer; he is also entitled to any gain or increase. In case of his death his executor or administrator is entitled to the goods; during his life his creditors may attach the goods. He alone has the full power to sell them and give a good title to the buyer; he may maintain actions of replevin or trover in case of conversion or unlawful detainer by the seller or any other person. On the other hand, the seller, in case title passes to the buyer, may maintain an action for the price of the goods; whereas, if title has not passed, the seller's action would be for damages for breach of the contract to receive and pay for the goods. In determining the question as to when title passes it is necessary to classify goods into (1) specific or ascertained goods, that is, goods upon which the minds of the parties meet, and (2) nonspecific or unascertained goods, that is, goods described but not actually chosen or specifically indicated. Example. (1) B purchases all the wheat in C's granary; these goods are specific. (2) B purchases of C one thousand bushels of wheat (no particular wheat indicated); these goods are unascertained. Title to the wheat in the granary would ordinarily pass to B as soon as the contract is |