T 1913 THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW j?fc^ZZZi-~~^z- <^(Z- J*S* /'*/. f '^.fowCfi*" 9 ^JL*~f 3 /;j/- -- \ HORNBOOK CASE SERIES ILLUSTRATIVE CASES . » _ . ONj - . . i> THE LAW iofeSALES By ROGER W. COOLEY, LL. M. hi Professor of Law, University of North Dakota Author of 'Briefs on the Law of Insurance,' "Law of Municipal Corpora- tions," "Illustrative Cases on Persons and Domestic Relations," "Illustrative Cases on Damages," "Illustrative Cases on Insurance" and "Illustrative Cases on Municipal Corporations" A COMPANION BOOK TO TIFFANY ON SALES (2d Ed.) St. Paul, Minn. WEST PUBLISHING CO. 1913 Copyright, 1913 BY WEST PUBLISHING COMPANY (Cooley Cases Sales) cnMs 1913 THE HORNBOOK CASE SERIES It is the purpose of the publishers to supply a set of Illustrative Casebooks to accompany the various volumes of the Hornbook Series, to be used in connection with the Hornbooks for instruction in the classroom. The object of these Casebooks is to illustrate the prin- ciples of law as set forth and discussed in the volumes of the Horn- book Series. The text-book sets forth in a clear and concise manner the principles of the subject; the Casebook shows how these princi- ples have been applied by the courts, and embodied in the case law. With instruction and study along these lines, the student should se- cure a fundamental knowledge and grasp of the subject. The cases on a particular subject are sufficiently numerous and varied to cover the main underlying principles and essentials. Unlike casebooks prepared for the "Case Method" of instruction, no attempt has been made to supply a comprehensive knowledge of the subject from the cases alone. It should be remembered that the basis of the instruc- tion is the text-book, and that the purpose of these Casebooks is to illustrate the practical application of the principles of the law. West Publishing Company. (iii)* 729229 TABLE OF CONTENTS FORMATION OF THE CONTRACT Page I. Sale Distinguished From Other Transactions 1 II. Who Can Sell 10 III. Subject-Matter of Sale 25 FORMATION OF CONTRACT— UNDER THE STATUTE OF FRAUDS I. What Contracts are Within the Statute 41 1. Contracts for Work, Labor, and Materials 41 2. Contract for Resale 51 II. What Are Goods, Wares and Merchandise 55 1. Incorporeal Property 55 2. Interest in Land — Fourth Section of the Statute 56 III. Acceptance and Receipt 59 1. Acceptance 59 2. Actual Receipt 02 IV. Earnest or Part Payment 67 V. The Note or Memorandum — Agents Authorized to Sign 70 VI. Effect of Noncompliance with the Statute 74 EFEECT OF THE CONTRACT IN TASSING THE PROPERTY— SALE OF SPECIFIC GOODS I. In General TO II. Rules for Ascertaining Intention S5 III. Reservation of Right of Possession of Property 86 1. Conditional Sales 86 J. I ; 1 5k of Loss KM IV. Bale on Approval or Trial 103 V. Sale or Return 105 EFFECT OF CONTRACT IN PASSING THE PROPERTY- SALE OF GOODS NOT SPECIFIC I. In General 10S II. Subsequent Appropriation m l. In General ,n '_'. Appropriation by Act of Seller 118 III. Reservation of Right of Possession or Property 124 FRAUD AND RETENTION OF POSSESSION I. Contract or Sale Induced by Fraud 131 II. Remedies of Defrauded Party ,; :i l. Bona Fide Purchasers from Fraudulenl Buyer L31 •j. Fraudulenl Impersonation 139 in. i raud on Creditors ' 1: - IV. How far Delivery is Essential to Transfer Property Agalnsi Cr< tors and Purchasers Il1 Com i , ' (v) Vl TABLE OF CONTENTS ILLEGALITY Page I. Rales Prohibited by Common Law 148 II. Sales Trobibited by Statute 152 III. Effect of Illegality 15S CONDITIONS AND WARRANTIES I. In General 166 II. Warranties 172 III. Implied Warranty of Title 185 IV. Implied Warranty in Sale by Description 191 V. Implied Warranty of Quality 197 VI. Implied Warranty in Sale by Sample 204 PERFORMANCE OF CONTRACT I. In General 209 II. Delivery of Wrong Quantity 211 III. Delivery by Installments 212 IV. Delivery to Carrier 221 V. Buyer's Right to Examine Goods 225 VI. Acceptance 227 VII. Excuses for Nonperformance of Conditions 228 1. Renunciation of Contract 228 2. Insolvency of Buyer 236 RIGHT OF UNPAID SELLER AGAINST THE GOODS I. Seller's Lien , 237 II. Stoppage in Transitu 246 1. Against Whom Right May be Exercised 246 2. Termination of Transit 249 III. Right of Resale 254 IV. Right to Rescind 260 ACTIONS FOR BREACH OF CONTRACT I. Remedies of the Seller — Damages for Nonacceptance 264 II. Remedies of the Buyer — Damages for Nondelivery 266 III. Breach of Warranty — Rights after Acceptance 269 1. In General 269 2. Rescission 272 3. Breach of Implied Warranty 275 4. Diminution of Damages — Recoupment 2S2 TABLE OF CASES Page Adam, Meldrum & Anderson Co. v. Stewart 131, 136 Andrews v. Cheney 116 Bagby v. Walker 44, 227 Becker v. Hallgarten 251 Bergan v. Magnus 84 Blackmore v. Fairbanks, Morse & Co 1S3, 202 Blunienthal v. Stahle 266 Bridges v. Bridges 159 Brigham v. Hibbard 120 Brownfield v. Johnson 10S, 211 Canham v. Piano Mfg. Co 272 Carleton v. Lombard, Ayres & Co 176, 202 Case Plow Works v. Niles & Scott Co 172, 20S Commercial Bank of Selma v. Hurt 10 Commonwealth v. Fleming Ill Coyle v. Baum 197 Cresswell Ranch & Cattle Co. v. Martindale 214 f'rummey v. Raudenbush 243 Cundy v. Lindsay 131, 139 Davis v. Gilliam 209 Diem v. Koblltz 236, 254 Dorsey v. Pike 62 Dunham v. Ilootman 70 I tanlop, In re 161 Dunlop v. Mercer 161 Dustan v. McAndrew 259, 260 Edgar v. Joseph Bre. v. Crosby '.»!» Piano Mfg. Go. v. Ellis 169 Vlll TABLE OF CASES Page Pope v. Allis 166 Providence Coal Co. v. Coxe 212 I testad v. Engemoen S5 Koehm v. Horst 228 Sattler v. Hallock 1 Schloss v. Fel t us 131 Seollans v. Rollins 17 Singer Mfg. Co. v. Draper 158 Singer Mfg. Co. v. Looney 158 Smith v. Edwards 118 Snider v. Thrall 65 Spooner v. Curumings 97 State v. Stockman 6 Page Stuart v. Pennis 56 Symns v. Schotten 249 Talbot Pav. Co. v. Gorman.. .279, 282 Tift v. Wight & Weslosky Co 74 Tompkins v. Sheehan 59 Tufts v. Griffin ioi Underwood v. Wolf 282 Unexcelled Fireworks Co. v. Po- ntes 264 Weir v. Hudnut 68 Wheelnouse v. Parr 221 Wigton v. Bowley 124 HORNBOOK CASES ON SALES FORMATION OF THE CONTRACT I. Sale Distinguished From Other Transactions 1 SATTLER v. HATXOCK. (Court of Appeals of New York, 1899. 1G0 N. Y. 291, 54 N. E. 667, 46 T* R. A. 679. 73 Am. St. Rep. 686.) Action by Theodore Sattler, assignee, against George W. Hallock and others, for conversion. From a judgment of the appellate division af- firming a judgment entered on a verdict in favor of defendants and an order denying a new trial (44 N. Y. Supp. 543), plaintiff appeals. Martin, J. On the 21st day of February, 1895, 25 farmers, resi- dents of the town of Smithville, L. I., were the owners of a building or premises used as a pickle factory, situated in that town. On that day they entered into a written agreement with the firm of John A. Meier- diercks & Sons, in relation to the production, manufacture, and sale of pickles, sauerkraut, and other like products. So far as material to the question involved, the contract was sub- stantially as follows : The parties agreed to organize a responsible com- pany or corporation for the purpose of conducting or aiding in the pro- duction and manufacture of the articles referred to in the contract. It then provided that the farmers were to prepare and deliver to the plain- tiff's assignors, at the factory, pickles, cabbage, dill, etc., to be raised upon an acreage which was given, and at prices stated therein. If the building proved insufficient, the farmers were to provide an additional one at a cost not to exceed $300, to be paid by the assignors and de- ducted from the net profits at the end of the season, they guarantying that such profits should amount to at least that sum. If they were more than the cost of the building, then the farmers were to receive 20 per cent, thereof, to be divided between them according to the amount of produce furnished by each. The as ignors were to take the pickles, cabbage, and other produce, pay the prices named at the times and in the manner stated, furnish the labor, machinery, barrels, tanks, salt, spices, * For discussion of principles, see Tiffany, Bales (2d Kd.) § 5. Cooley Cases Balm — 1 2, FORMATION OF THE CONTRACT and other necessary material, and pay the freight and cartage. These expenses were to he deducted from the gross receipts of the sales of the pickles, sauerkraut, and other goods so manufactured. A list was then given of the number of acres of each kind of produce which was to he furnished by each of the 25 farmers named. To receive products at the factory, the assignors were to furnish one man and the farmers an- other, who were to attend to their reception, and decide all matters of dispute in relation to them. The representative of the farmers was to be given full and complete data of all the produce delivered, and all barrels, salt, spices, and utensils furnished, and all the goods of every description received and shipped by the assignors, so as to show the gross receipts and expenses for the year. The agreement then pro- vides : "The manufacture and sale of all the products of the Long Island Farmers' Co. shall be done by J. A. Meierdiercks & Sons. * * * It is hereby agreed by the undersigned, of the Long Island Farmers' Company, that at any time should the business of the Long Island Farmers' Company cease, and the property, including buildings, utensils, bbls., etc., be sold or bartered, the members of the Long Island Farmers' Company, other than J. A. Meierdiercks & Sons, guaranty to J. A. Meierdiercks & Sous 35 per cent, of the amount realized." This agreement was signed by the 25 farmers mentioned, and by the plaintiff's assignors. Subsequently, the Long Island Farmers' Company was organized in accordance with the contract. By-laws were passed, and the defendants were elected as its managing officers. Soon after the execution of the contract, the plaintiff's assignors went to the factory, proceeded to man- ufacture the produce which was delivered under it, and continued that business until they made a general assignment to the plaintiff. The keys of the factory were retained by, and continued in the possession of, a representative of the farmers, who, after the produce was deliv- ered at the factory and manufactured, shipped it to various purchasers. During the continuance of this business, the executive officers of the farmers' company, or some of them, were usually present at the factory, and engaged in looking after the business there transacted. They gave directions, passed judgment upon the quality of the produce, and were often consulted by the assignors' representative in regard to affairs con- nected with the business. Although the manufactured products were sold by the plaintiff's assignors, they were billed, "J. A. Meierdiercks & Sons, Agents Long Island Farmers' Company." These bills were sent, and checks drawn to the order of the company were received, when the assignors requested the committee of the company to give them a power of attorney to indorse them, which it refused to do. On the 17th of September, 1896, the firm of John A. Meierdiercks & Sons made a gen- eral assignment to the plaintiff for the benefit of its creditors. Subse- quently the plaintiff went to the factory at Smithtown, and demanded all the products, manufactured and unmanufactured, claiming that they SALE DISTINGUISHED FROM OTHER TRANSACTIONS O were owned by the assignors at the time of the assignment, and were a part of the assets of that firm. With this demand the managers of the company refused to comply, claiming that by the terms of the agree- ment the company and the farmers it represented were the lawful own- ers of such products. This action was to recover their value at the factory at the time of the assignment, upon the ground that the defendants had wrongfully converted them to their own use. The defendants alleged title in the Long Island Farmers' Company, and that they, as its representatives, were entitled to the possession of the property. Thus is it obvious that the single question involved is whether, under the contract between the parties, the title to the property in suit vested in the plaintiff's as- signors and was transferred to him by the assignment, or whether it remained in the farmers' company or the farmers furnishing it. On the trial the court held that the contract imported a sale, but submitted to the jury the question whether, under the facts and circumstances proved, including the acts of the parties, the contract had been substan- tially altered, so that the title rested in the defendants or the company or persons they represented. The jury found for the defendants. The appellate division, however, held that the evidence was not sufficient to justify the submission of that question to the jury, but that the con- tract between the parties was one of bailment or partnership, and not of sale, and hence the plaintiff was not entitled to recover, and judg- ment for the defendants was properly rendered. With this situation, it is obvious that the determination of the courts below can be sustained only in case the transaction between the parties a bailment or joint enterprise. If it was a bailment, manifest- ly the defendants were entitled to retain the possession of the prop- erty. If it was a joint enterprise, the plaintiff could not recover in an action for the conversion of the property, as the defend- ants were entitled to its possession, as against the plaintiff, un- til the matters arising under the contract were adjusted. We fully agree with the learned appellate division that there was no evidence to justify the trial court in submitting to the jury the question of an alteration or modification of the original .agreement. Therefore the real question we are called upon to decide is whether the agreement of the parties imported a sale of the property to the plaintiff's assignors, [f it did. and the title passed, then the plaintiff is entitled to recover; if not, then the judgment is right, and should be affirmed. In the construction of contracts, where there is no ambiguity, it is the duty of court to determine their meaning. Moreover, where the terms and language of the contracl are not disputed, its legal effect is a question of law, to he determined by tin- court. It is always the duty of a court, in construing a written instrument, if possible, to ascertain the inten- tion of the parties; and, iii order to determine its proper construction, rt musl hi- had to the instrument as a whole, and effect musl he 4 FORMATION OP THE CONTRACT given to every clause and part thereof, when it can be done without vio- lence. Ripley v. Larmouth, 56 Barb. 21. With these principles in mind, we approach the question whether, un- der the provisions of this contract, the plaintiff's assignors were bailees of the property, or whether the contract was one of purchase and sale. One of the distinctions between a bailment and a sale is correctly pointed out in the dissenting opinion of Bronson, C. J., in Mallory v. Willis, 4 N. Y. 76, 85, as follows : "When the identical thing delivered, though in an altered form, is to be restored, the contract is one of bailment, and the title to the property is not changed." Foster v. Petti- bone, 7 N. Y. 435, 57 Am. Dec. 530. There are, however, other prin- ciples applicable to the question. Thus, when property in an unmanu- factured state is delivered by one person to another, upon an agreement that it should be manufactured or improved by his labor and skill, and when thus improved in value should be divided in certain proportions between the respective parties, it constitutes a bailment, and the orig- inal owner retains his exclusive title to the property until the contract is completely executed, although the labor to be performed by the bailee may be equal or even greater in value than that of the property when received by him. Beardsley, J., in Gregory v. Stryker, 2 Denio, 631. Again, the relation is that of bailor and bailee, where the property is thus delivered to be manufactured or improved, and afterwards there is to be a sale and a return or a division of the proceeds. Stewart v. Stone, 127 N. Y. 500, 28 N. E. 595. In Hyde v. Cookson, 21 Barb. 92, there was a written agreement between the plaintiffs and one Osborn in relation to tanning a quantity of hides. The hides were to be furnished by the plaintiffs on a commission of 5 per cent, for buying and 6 per cent, for selling the leather. Osborn was to take the hides to his tan- nery, manufacture them into' hemlock sole leather, and return it to the plaintiffs, who were to sell it in their discretion. When sold, the ac- count was to be made up, and the net proceeds of the sales, after de- ducting the costs of hides, commissions, interest, insurance, and other expenses, were to be the profit or loss to accrue to Osborn in full for tanning the hides ; and it was held that this was not a contract of sale, but of bailment, and that the title remained in the plaintiffs. In Pierce v. Schenck, 3 Hill, 28, logs were delivered at a sawmill under a contract with the person running the mill that he would saw them into boards, and that each party should have one-half. It was held that the trans- action was a bailment; that the bailor retained his general property in the logs until they were all manufactured in pursuance of the con- tract; and that, as between the parties, the bailee acquired no interest in any of the boards manufactured by mere part performance within the time. In Mallory v. Willis, 4 N. Y. 76, the plaintiffs agreed to de- liver merchantable wheat at a flour mill carried on by the defendant to be manufactured into flour. The defendant agreed to deliver 196 SALE DISTINGUISHED FROM OTHER TRANSACTIONS 5 pounds of superfine flour, packed in barrels to be furnished by the plain- tiffs, for every 4 bushels and 15 pounds of wheat. He was to be paid 16 cents per barrel, and 2 cents extra in case the plaintiffs made 1 shil- ling net profit on each barrel of flour. The defendant was to guaranty the inspection. The plaintiffs were to have the offals or feed, which the defendant was to store until sold. This court held in that case that the contract imported a bailment, and not a sale. The doctrine of that case was indorsed in Foster v. Pettibone, 7 N. Y. 433, 57 Am. Dec. 530. In Mack v. Snell, 140 N. Y. 193, 35 N. E. 493, 37 Am. St. Rep. 534, the parties entered into a contract by which the plaintiff agreed to manu- facture for the defendant 1,000 pairs of pruning shears, to be in all re- spects like a sample furnished, the defendant to furnish the rough cast- ings for the handles, and the plaintiff to furnish the blades. It was held that the contract was one of bailment, and not of purchase and sale, so that the title to the shears manufactured was at all times in the defendant. Applying these principles to the contract under consideration, we think it is quite obvious that it was one of bailment, and not of purchase and sale. Under its terms, the parties represented by the defendants were to furnish certain specified amounts of farm produce, which was to be delivered at a factory owned by them, and manufactured into pickles, sauerkraut, and other similar articles. It was to be received jointly by a representative of the plaintiff's assignors and a representa- tive of the farmers. The plaintiff's assignors were to pay the prices named for the produce furnished, to furnish the labor, machinery, and materials, such as salt, spices, barrels, and other necessary articles and utensils, and to pay the freight and cartage. The amount thus ex- pended was to be deducted from the gross receipts of the sales of the articles manufactured, and the representative of the farmers was to be furnished with a full account of all of the transactions connected with the business. The manufacture and sale of the products of the Long Island Farmers' Company were to be done and made by the plaintiff's assignors, and the net proceeds were to be divided by paying 20 per cent, to the farmers or for their benefit, and the assignors to have 80 per cent. Thus the produce was to be furnished by the persons repre- sented by the defendants, was to be manufactured by the plaintiff's assignors, to be sold as the products of the Long Island Farmers' Com- pany, and the net profits divided. The raw material, which was owned by parties the defendants represent, was delivered to the plaintiff's as- signors, to be improved by their labor and skill. It was then to be sold, and the net value divided in the proportions named. So that, rly within the principle of the Gregory and other kindred cases, the owners of the prodmc thus delivered retained their title to the prop- erty until the contract had been completely executed, and this without regard to the value of the labor performed upon it by the plaintiff's as- G FORMATION OF THE CONTRACT signors as such bailees. We think, when this entire contract is exam- ined and understood, it clearly imports a bailment, and not a sale. It is also quite manifest that the parties understood such to be the nature of the agreement between them. This is shown by the facts that the property, after it was manufactured, was shipped from the factory by the company; that the plaintiff's assignors, acting under this con- tract, in selling the manufactured produce, caused the bills to be sent to purchasers in the name of the company, with their names thereon as agents ; that checks were taken therefor drawn to the order of the company, in accordance with the bills sent; that the assignors asked for a power of attorney authorizing them to indorse the same; that the representatives of the farmers were present at the factory, and that they gave directions as to the management of the business there car- ried on. All these facts tend to show with convincing certainty that the plaintiff's assignors, as well as the other parties to the contract, under- stood it to be one of bailment, where the property was to be furnished by the latter, improved by the former, and the net profits divided. If this contract is to be regarded as somewhat indefinite or ambiguous, we may resort to the surrounding facts and circumstances as they ex- isted when it was made to aid us in its interpretation, and also consider the practical construction which the parties have given it. Its interpre- tation by them is a consideration of importance. As was said by Swayne, J., in Insurance Co. v. Dutcher, 95 U. S. 269, 273 (24 E. Ed. 410) : "The construction of a contract is as much a part of it as any- thing else. There is no surer way to find out what parties meant than to see what they have done." Woolsey v. Funke, 121 N. Y. 87, 24 N. E. 191. It follows from the conclusion we have reached as to the character of the contract and the relation existing between the parties that the judgment must be affirmed, as the agreement between them consti- tuted a bailment of the property in question, and the plaintiff's as- signors acquired no such title as would enable them to maintain an ac- tion for its conversion. The judgment should be affirmed, with costs. All concur. Judgment affirmed. STATE v. STOCKMAN. (Supreme Court of Oregon, 1S96. 30 Or. 36, 46 Pac. S51.) John R. Stockman was convicted of a violation of the act commonly known as the "Warehouse Act" by shipping wheat, stored in a ware- house of which he was the manager, without the written assent of the holder of the receipt therefor, and he appeals. Bean, J. The defendant was convicted of a violation of section 4 of the act of 1885, commonly known as the "Warehouse Act," being section 4204 of Hill's Annotated Laws, by shipping wheat, stored in SALE DISTINGUISHED FROM OTHER TRANSACTIONS < a warehouse of which he was the manager, without the written assent of the holder of the receipt therefor. The facts are that at the time of the commission of the alleged crime the defendant was the manager of the Red Crown Roller Mills, a corporation owning and operating a flouring mill in Albany, Or., and engaged in the business of manufac- turing flour and other mill products for sale. A part of the mill build- ing was used for the storage of wheat belonging to the company, and such as it might receive f om the neighboring farmers. The wheat so stored was all mixed in one common mass, from which the company drew from day to day for the purpose of its business. In September, 1894, one E. D. Barrett delivered to it 2,19S 15 /so bushels of wheat, for which a receipt in the following form was issued to him : "Red Crown Mills, "No. 1,078. Albany, Oregon, Sept. 18, 1894. "Received of E. D. Barrett, by self, two thousand one hundred ninety-eight 15 /oo bushel No. 1 merchantable wheat, subject to sacks and storage, .OS cents per bushel, if withdrawn from mill. "Red Crown Roller Mills. "2.198 15 /6o Bu. Lyons." Immediately upon the receipt of the wheat, it was, with the knowl- edge and consent of Barrett, mixed and mingled with the other wheat on hand at the time, and was subsequently manufactured into flour by the mill company, and sold for its own use and benefit. No storage was paid or demand made for the wheat until after the failure of the company in March, 1895, when Barrett demanded the then market value thereof, which, being refused, he tendered the storage, and de- manded a return of the wheat, and obtaining neither, commenced this prosecution. The indictment charges that the defendant, as the manager of a warehouse for the storage of grain, received for storage therein the wheat in question, issued a receipt therefor, and afterwards sold, ship- ped, transferred, and removed the same from such warehouse, and bc- d his control, without the written assent of the holder of the re- ceipt. In order to sustain this charge, it was incumbent upon the state rove that the wheat in question was in fact placed in a warehouse, within the meaning of thai term as used in the statute, and, in addition thereto, that it was placed therein on storage. A failure of proof in either particular would arily he fatal i" the prosecution. Upon the receipt i- ued to Barrett affords no solution of either "f tioi . for it i^ silenl as t<> whether the building was in fact a warehouse, and as to whether the wheat w; eived on stor; or \< parol evidence to ascertain the true character of the bu iness in which the mill company was engaj well as the terms on which the wheat d. Lyon v. Lenon, 106 tnd. 567, 7 X. !•".. 311. Upon the trial, evideno ; en and offered tending to show, and 8 FORMATION OF THE CONTRACT from which the jury could have found, that the mill company did not receive grain for storage or safe-keeping, but that, according to its usual course of business, known to its customers, and particularly to Barrett, all wheat received by it was mixed with, and became a part of, the consumable stock of the mill, and was manufactured into flour and other mill products, and sold and disposed of by the mill company in the usual course of business, and that it satisfied its obligation to the depositors by paying them the market price when demanded, or by returning a like quantity and quality of other wheat. In the former case no storage was charged or paid, but in the latter a charge of eight cents a bushel was made for sacks and storage ; and this accounts for the provision in the receipt to Barrett concerning the payment of stor- age if the wheat should be withdrawn from the mill. Assuming these facts to be true, as we must for the purposes of this appeal, the question of law is presented as to whether the transaction comes within the provisions of the act of 1885. And, as its solution involves the merits of the entire theory upon which the cause was tried in the court below, we shall proceed to examine it without incumber- ing the opinion with a statement of the various ways in which the question was raised during the progress of the trial. It is conceded by counsel for the state, as we understand them, that if, assuming the facts stated to be true, the corporation of which defendant was the manager was not engaged in the warehouse business, or if the wheat was not received on storage, within the meaning of the statute, the judgment from which this appeal was taken is erroneous, and should be reversed. The statute in question (Laws 1885, p. 61 ; 2 Hill's Ann. Laws Or. § 4201 et seq.) is entitled "An act to regulate warehousemen, wharfin- gers, commission men and other bailees, and to declare the effect of warehouse receipts," and makes it the duty of every person owning or operating "any warehouse, commission house, forwarding house, mill, wharf or other place where grain, flour, pork, beef, wool or other produce or commodity is stored," to deliver to the owner thereof a warehouse receipt, which "shall bear the date of its issuance and shall state from whom received, the number of sacks if sacked, the number of bushels or pounds, the condition or quality of the same and the terms and conditions upon which it is stored"; prohibits the issuance of fraudulent receipts, or for a commodity "not actually in store at the time of issuing such receipt"; prohibits the bailee from mixing commodities of different qualities or grades ; provides that no person operating "any warehouse * * * or other place of storage" shall sell, incumber, ship, transfer, or remove, beyond his custody or control, any grain or other produce, for which a receipt has been given by him, without the written consent of the holder of the receipt; makes all checks or receipts given by any person operating "any warehouse * * * or other place of storage," for any grain or other commodity SALE DISTINGUISHED FROM OTHER TRANSACTIONS V "stored or deposited," and all bills of lading and transportation receipts of any kind, negotiable ; provides that the same may be transferred by indorsement, which shall be deemed a valid transfer of the commodity represented thereby ; that on the presentation of the receipt given by any person operating "any warehouse * * * or other place of storage" for grain or other produce, and payment of all the charges due thereon, the owner shall be entitled to the immediate possession of the "commodity named in the receipt" ; that it shall be the duty of the warehouseman or bailee to deliver the same to him; and the violation of any provision of the act is thereby made a penal offense, punishable by fine, or imprisonment, or both. From this summary, it is apparent that the statute, as its title and contents clearly indicate, is designed to cover the special business of warehousemen, wharfingers, commission men, and other bailees who are engaged in receiving and storing the goods of others as a business. Its principal object is to make warehouse receipts negotiable, and to protect the rights of the holders thereof, by requiring the warehouse- man or bailee to keep constantly on hand the specific goods stored, or a sufficient portion of the bulk of which they become a part, to satisfy his outstanding receipts. In short, it was designed to compel a ware- houseman or other like bailee, under the penalties of a criminal pros- ecution, to live up to and abide by the contract of bailment. But the evil sought to be remedied by this legislation and the remedy sought to be applied alike show that it never was within the legislative mind that it should apply to a case where the bailee has the right, under the contract, express or implied, to sell or use the goods committed to his care. In such case, in the very nature of things, there can be no stor- age or bailment ; but the transaction is, in essence, a sale of the com- modity, and an extension of personal credit to the bailee. There is an inherent difference, recognized by all the authorities, between a bailment and a sale. In the one case, the property remains in the depositor, and the bailee is but the custodian of the thing, with no right to use or dispose of it in any way; while, in the other, he may use it as his own, the depositor relying upon his personal credit for its value, either in money or kind. A warehouse, therefore, within the meaning of this statute, is a place where any of the commodities enumerated therein is received on storage for the owner, by some person or corporation engaged in the general business of receiving such go •ore for compensation or profit. Bucher v. Com., 103 Pa. 528; Fishback v. Van Dusen, 33 Minn. Ill, 22 X. W. 244; State v. Bryant, '.Id. 66. Under the rule in this state, wheat stored with a ware- houseman i e to 1"- a bailment, within the meaning of this act, because it is, by the consent of the depositor, mixed with other wheal of like grade and quality (McBee v. Ceasar, 15 ( )r. 62, 13 Pac. 652); hut. when it is delivered and received under an agreement, • " implied from the COU1 of dealing, that the person to whom it is delivered may use it as a part <>f his consumable stock, and fulfill 10 FORMATION OF THE CONTRACT his obligation to the owner by either paying its market value when de- nied or returning an equal amount of other wheat of like grade and quality, the transaction is not a bailment or storage, within the mean- ing of the statute, and the depositee cannot be convicted of a crime for doing that which he is permitted to do by the very terms of his con- tract. Lyon v. Lenon, 106 Ind. 567, 7 N. E. 311; McCabe v. Mc- Kinstry, 5 Dill. 509, Fed. Cas. No. 8,667 ; Andrews v. Richmond, 34 Hun, 20; Johnston v. Browne, 37 Iowa, 200; Nelson v. Brown, 44 Iowa, 455. Now, as already suggested, there was evidence in this case tending to show (1) that the company of which the defendant was the manager was not engaged in the business of receiving grain on storage for the owner, and so was not a warehouse keeper, within the meaning of the statute ; and (2) that, if it was keeping a warehouse for the storage of grain, the Barrett wheat was not so received. The case, therefore, should have been submitted to the jury, with a direction that they could not convict unless they were satisfied, from the evidence, that the place where the grain was deposited was, in fact, a warehouse for the storage of grain, and that it was received there on storage, and not on an agreement, express or implied, that the mill company might use it in the course of its business. And, because these questions were not so submitted to the jury, the case must be reversed, and a new trial or- dered. II. Who Can Sell 2 COMMERCIAL BANK OF SELMA v. HURT. (Supreme Court of Alabama, 1892. 99 Ala. 130, 12 South. 568, 19 L. It. A. 701, 42 Am. St. Rep. 3S.) Action of detinue by H. H. Hurt against Phillips & Parish for eight bales of cotton, to which the Commercial Bank of Selma in- terposed claim. There was judgment for the plaintiff, and claimant appeals. Walker, J. 3 The claim of the appellant, the Commercial Bank of Selma, to the cotton involved in this suit rests upon a transfer and delivery by the H. C. Keeble Company of warehouse receipts therefor as collateral .security for a note made by that company to the bank. The H. C. Keeble Company was a corporation engaged in business as a cotton factor and grocery merchant in the city of Selma. The appellee, who was the owner of the cotton, had had it shipped to that company, with instructions not to sell it until or- 2 For discussion of principles, see Tiffany, Sales (2d Ed.) § 11. 3 The statement of facts is abridged and part of the opinion is omitted. WHO CAN SELL 11 tiered to do so. The consignee had the cotton stored in the ware- house of Phillips & Parish, and took the warehouse receipts there- for in its own name. No advances were made to the appellee on this cotton, and there is no evidence that he authorized the consignee to store it and take the warehouse receipts in its own name, or to pledge the cotton itself, or the warehouse receipts. Under the com- mon law, a factor or commission merchant has no implied authority to pledge the goods of his principal for his own use. Unless the re- sult is controlled by some statute, the attempted pledge does not work a divestiture of the title of the principal, and the party receiv- ing such a pledge and advancing his money acquires no right to the property as against the principal, whether he knew he was dealing with a factor or not. Bott v. McCoy, 20 Ala. 578, 56 Am. Dec. 223 ; Voss v. Robertson, 46 Ala. 483; Allen v. Bank, 120 U. S. 20, 7 Sup. Ct. 460, 30 L. Ed. 573 ; 1 Lawson, Rights, Rem. & Pr. § 229. * * * If the H. C. Keeble Company, instead of having the cotton stored in the warehouse of Phillips & Parish, had retained possession of it until, without any authority or license from the appellee, the cotton itself was delivered to the bank in pledge to secure the payment of the note of the H. C. Keeble Company, it is plain that the bank would not have acquired any greater title to the property than that company had to confer, and the appellee would have been entitled to recover the cotton from the bank, or to hold the bank liable for its conversion. But it is claimed that the factor, having stored the cotton in a warehouse, and obtained warehouse receipts therefor to itself, was enabled, by the transfer of those receipts, to confer upon the bank a claim to the cotton which must prevail against the title of the true owner. Section 1178 of the Code is relied upon as giving this effect to the transfer of warehouse receipts by the persons to whom the}- are issued. The clause of that section upon which this claim is ba ed is in the following words: "The receipt of a ware- houseman, on which the words 'Not negotiable' arc not plainly wril ten or stamped, may be transferred by the indorsement thereof, and any person to whom the same is transferred must be deemed : taken to be the owner of the things or property therein sp< cified, so far as to give validity to any pledge, lien, or transfer made or created by such person." ons 1175, 1177-1179, of the Code, arc based upon an act ap proved Februar 28, 1881, entitled "An act to prevent the issue of ipts, and to punish the fraudulent transfer of property bv warehousemen, wharfiii and others." Acts Ala. 1880-81, p. In the proa of codification the provisions of thai stal re redrafted, and . hat modified. But the provisions of the four ins above mentioned are all in furtherance of the main e purpose, which was indicated in the title and in the cor ponding sections of th< inal act. So far as v ise re • tied, the pur] I i tatute is, in the first place, 12 FORMATION OF TUE CONTRACT to prevent the issue of such receipts, unless the property therein described has been actually received, and is in the possession of the person issuing the receipt. This purpose is manifested in section 1175 of the Code. The purpose, in the next place, is to give defi- nite legal recognition to such receipts as true tokens of the posses- sion of the property described in them ; and to regulate the manner in which the holder of .such a token of possession may, by an as- signment of it, convey his interest in the property described as ef- fectually as he could by a transfer and delivery of the property it- self. The provisions to this end are embodied in sections 1177- 1179. Undoubtedly it was the intention of the legislature to facilitate and throw safeguards around dealings in personal property by the use of paper representative of it. To this end the holder of a warehouse receipt is so far treated as the possessor of the property mentioned in it that his transfer of the receipt, in the mode prescribed by the statute, operates in the same manner as the direct delivery of the property itself would do. The transfer of the receipt is given ef- fect as a symbolical delivery of possession. The statute does not undertake to make the receipt better evidence of title than the actual possession of the property itself. We cannot conceive that it could have been within the contemplation of the legislature that the pro- visions of the statute would enable a thief, by depositing the stolen property with a warehouseman, and obtaining a receipt for it in due form, to confer upon an innocent purchaser for value and in good faith a claim to the property which would prevail against that of the true owner. In Collins v. Ralli, 20 Hun, 246, it was held that a New York- statute substantially identical with the provision above quoted did not protect the purchasers for value and in good faith of warehouse receipts, when the possession of the cotton they represented by the person to whom they were issued had been larcenous. After quot- ing the statute, the court said : "The learned counsel for the de- fendants insist that the provisions of this section afford them com- plete protection against a recovery in this action; that, having purchased the cotton upon the faith of the negotiable warehouse re- ceipts, and paid therefor full market value, this case falls within the spirit and the letter of the section. All the other sections of this act, except the last, which is unimportant, prohibit the issue of false receipts, etc., and prescribe the penalty for a violation of their pro- visions. The scope and object of the act, therefore, seems to be to protect the mercantile community against fraudulent practices by warehousemen, wharfingers, and others, in respect to these receipts for goods stored or represented to be stored with them. That this is the purpose is shown by the title of the act. * * * The clause 'warehouse receipts given for any goods * * * stored or de- posited with any warehouseman' means receipts given for goods so WHO CAN SELL 13 stored or deposited by any person having the title thereto, real or apparent, or authority of such person therefor. This section of the act proceeds upon the assumption that the receipt is so issued. Any other construction would enable warehousemen to issue receipts for goods, known by them to be stolen, and so convey title to them, or even themselves to commit larceny, and, by issuing receipts for the stolen property, defraud the plundered owner of all title to and power of reclaiming it. Such a construction would work a change in the law hardly contemplated by the legislature when the act un- der consideration was passed, and yet the construction insisted upon by the defendants would accomplish precisely this result. Courts often have to look bevond the mere words of a statute in determin- ing its meaning, and give to it such an interpretation as the mischief sought to be cured and the evident intention of the legislature indi- cate." The judgment in that case was affirmed by the court of ap- peals, (Collins v. Ralli, 85 N. Y. 637,) and the decision has been approved in subsequent cases, (Hentz v. Miller, 94 X. Y. 64; Soltau v. Gerdau, 119 X. Y. 380, 23 X. E. 864, 16 Am. St. Rep. 843). To put it in the power of a factor to give effect to an unauthor- ized pledge of the property of his principal by resorting to the de- vice of pledging a receipt for the property instead of the property itself, would as clearly be an abridgment of the common-law rights of the owner as it would be to allow a thief, by using a receipt for the stolen property instead of the property itself to defeat the common- law right of the owner to reclaim the stolen property in whosesoever hands it may be found. The statute under consideration does not purport to deal with the right of the owner of personal property to recover it from the one who claims under a disposition of it which was unauthorized by the owner. The object in view being to recog- nize dealings in personal property by the use of certain tokens of its possession, to prevent the issue of such tokens except when the property mentioned in them has actually been received by t he per- s issuing them, and to regulate the transfer of the property by assignment of the token, as a substitute for actual delivery of the property. The statute was framed on the assumption that the pos- session of the property by the person to whom the token was issued was accompanied by ownership and a right to dispose of it, and questions presented by the assertion of a paramount claim to the property were not dealt with by the statute, but were left to be de termined by existing laws governing the right of tin- true owner of property to follow and reclaim it in the hands of persons claiming under an unauthorized disposition *>\ it by one nut the true owner, but in actual posse sion of it. There is evidence in section 1178 of the Code of the absence <>f any intention to enable the holder of a warehouse receipt, by ;i tran of it by indorsement, to confer any better claim to the property than 11 FORMATION OF THE CONTRACT he could if he had not stored the property with a warehouseman, but had invested the person with whom he dealt with actual posses- sion of it. Immediately after the clause already quoted from that section is the following provision: "But this section must not be so construed as to affect or impair the lien of a landlord on such things or property for rent or advances, or to affect or impair any lien thereon created by contract, of which notice is given by registra- tion in the manner prescribed by law." It is not to be supposed that the legislature was more solicitous to protect the rights of lienhold- ers than those of the owners of the property. The assumption is that it is the owner who has had the property stored and obtained a warehouse receipt for it, and the provision just quoted simply makes it plain that he cannot, by a transfer of the receipt, any more than he could by a disposition of the property accompanied by an ac- tual delivery of possession, affect or impair liens upon it. It is further provided in the same section that, "in the event of the loss or destruction of such receipt, the warehouseman, not having notice of the transfer thereof by indorsement, may make delivery of the things or property to the rightful owner thereof ; and if the things or property, or any part thereof, be claimed or taken from the custody or possession of the warehouseman under legal process, the surrender thereof may be made without delivery or cancellation of such receipt, or without indorsement thereon." The first of these two clauses shows that it was assumed that the receipt was issued to the rightful owner of the property. The second of them shows that it was no part of the legislative intention to make the fact that his receipt is outstanding a protection to the warehouseman against paramount claims to the property, or to displace, in the case of the issue of a warehouse receipt to another, the common-law rules gov- erning the rights of the owner to recover his property from a stran- ger claiming under a disposition of it not binding on him. The apparent object of the statutory provisions in reference to warehouse receipts is to give them, for purposes of commerce, recog- nition and credit as substitutes for the property described in them, and to give dealings in them the same effect as similar dealings with the property itself. We think that they are made negotiable only in the sense that in their passage through the channels of commerce the law regards the property which they describe as following them, and gives to their regular transfer by indorsement the effect of a manual delivery of the things specified in them. No intention is disclosed to give dealings in them any more controlling effect upon the title to the property they represent than would be given to similar dealings with the property itself. At last they are mere tokens of possession, and no guaranties of title by the persons issuing them. The warehouseman holds himself out as the custodian for the legal holder of the receipt of the property mentioned in it, but he does not WHO CAN SELL 15 warrant the title of the property against the claims of strangers to the contract of storage. * * * In Shaw v. Railroad Co., 101 U. S. 557, 25 L. Ed. 892, it was recognized that a statute declaring that bills of lading "shall be ne- gotiable by written indorsement thereon and delivery, in the same manner as bills of exchange and promissory notes," should not, in the absence of language clearly evidencing such an intention, be con- strued as effecting such an innovation upon the common-law right of the owner of property to protection against its misappropriation by others that such misappropriation could be successfully made by the use of a symbol or representative of the property, when it would not prevail against the claim of the owner if the possession of the property itself had been acquired in a similar manner. In National Bank o'f Commerce v. Chicago, B. & N. R. Co., 44 Minn. 224, 46 X. W. 342, 560, 9 L. R. A. 263, 20 Am. St. Rep. 566, the proposition was stated and applied that it is always a good defense to a carrier, even against an innocent indorsee of the bill of lading, that the property was taken from its possession by one having a paramount title ; and it was decided that the correctness of this proposition was not affected by a statute which provided that bills of lading or re- ceipts for any goods, wares, merchandise, etc., when in transit by cars or vessels, "shall be negotiable, and may be transferred by in- dorsement and delivery of such receipt or bill of lading, and any person to whom the said receipt or bill of lading may be transferred shall be deemed and taken to be the owner of the goods, wares, or merchandise therein specified." * * * Our conclusion is that it would be a perversion of the manifest purpose of the statute to construe it as having the effect of putting the symbol of the property upon a higher plane, as an evidence of title, than the actual possession of the property it describes. The tute does not undertake to make the transfer and delivery of the symbol more than the equivalent of an actual transfer and delivery of the pn iperty itself. ■ needing that the clause in the contract of pledge, "which cotton has been advanced upon by us to its full value," dues not show that the ] I< dj or' character as a factor was recognized in the transaction, and that it was the intention of the parties to limit the operation of ■ to the pledgor's actual interest in the cotton by rea of advance-, made upon it, we have, then, the simple case of a pl< • r of the property of his principal for his own use. The warehouse receipts which he obtained are to be regarded i elf which he held in the capacity of an agenl to sell. We have no "factoi ' a t" to raise up a statutory estoppel againsl the owner, based upon his acl in intrusting the factor with posses ion of the goods, or documentary evidence of ownership and right of • d, and thereby leading innocent third persons to deal with the factor on the faith of hi' apparenl ownership. There is nothing to 16 FORMATION OF THE CONTRACT take this case out of the influence of the common-law rule, which pro- tects the owner of personal property against an unauthorized pledge of it by one who held it merely as factor or as agent to sell. The original defendants, the warehousemen, having disclaimed all interest in the suit, the plaintiff was entitled to recover his cotton, and the claim of the bank, based upon the attempted pledge by the H. C. Keeble Company, presented no legal obstacle to the plaintiff's recovery. * * * Affirmed. GUINZBURG v. H. W. DOWNS CO. (Supreme Judicial Court of Massachusetts, 1S96. 165 Mass. 467, 43 N. E. 195, 52 Am. St. Rep. 525.) Bill by William Guinzburg against the H. W. Downs Company to establish plaintiff's ownership of shares in defendant corporation, and to enforce his rights as stockholder. Reserved for the consideration of the supreme judicial court. Allen, J. A pledgee, on default in the payment of his debt, may sell the pledged property at public auction, giving to the pledgor no- tice of the time and place of sale. Washburn v. Pond, 2 Allen, 474; Union Cattle Co. v. International Trust Co., 149 Mass. 492, 501, 21 N. E. 962. But in making such sale he is bound to exercise reasonable skill and diligence in order to get the value of the property. Newsome v. Davis, 133 Mass. 343; Clark v. Simmons, 150 Mass. 357, 23 N. E. 108. This includes the fixing of a reasonable time and place of sale. Markham v. Jaudon, 41 N. Y. 235, 243. The facts reported in the present case are somewhat meager. For instance, we do not know what public notice was given of the sale, nor whether the price obtained was much, if any, below the value of the shares. We are much inclined to think the place of sale was an un- reasonable one. The pledged property consisted of over one-third of the whole number of shares in a small Massachusetts corporation, whose whole capital stock was only $16,000. None of the stock had ever been sold at auction in New York, and it was not listed. It did not appear that it was known in New York. The note for which the stock was pledged was made and delivered in Massachusetts, and was payable here, and the pledge was made here. The pledgee was a New York corporation. Under these circumstances, it would have been better to make the sale in Massachusetts. But it appears that the Downs Company, which was the pledgor, and its officers, whose names were also on the note, all received notice of the proposed sale on July 20, 1894, and the sale was fixed for July 24th; and the pledgor and its officers, after the receipt of the notice, did not communicate with the pledgee, or take any action in regard to the said notice or the pro- posed sale. Since all the parties whose names were on the note had notice for this length of time, and omitted to make any protest or ob- WHO CAN SELL 17 jection to the place or time of sale, and took no action whatever in re- gard to the notice or proposed sale, we think this omission and silence amounted to a waiver of objection on this score, and that they cannot now be heard to complain that the place was unreasonable. See Met- calf v. Williams, 144 Mass. 452, 455, 11 N. E. 700. The fact that there was only one bidder does not render the sale invalid. Learned v. Geer, 139 Mass. 31, 29 X. E. 215. On the facts reported, the sale was valid, and the plaintiff is entitled to a decree in his favor. Decree for the plaintiff. SCOLLANS v. ROLLINS. (Supreme Judicial Court of Massachusetts, 1S99. 173 Mass. 275, 53 N. E. SG3, 73 Am. St. Rep. 2S4.) Actions by T. J. Scollans against E. H. Rollins & Sons. There were judgments for defendants, and plaintiff excepts. Barker, J. The documents for the conversion of which these ac- tions are brought are described in the bill of exceptions and in the several declarations as bonds of the city of Boston. Upon inspection of the copy which is part of the bill, although the documents bear upon their faces the words "Registered Bond," they do not appear to have been under seal. Each document certifies that there will be due from the city, payable at the office of the city treasurer on the 1st day of April. 1913, to William Scollans, the sum of $1,000, with interest at 4 per cent, per annum, payable on the 1st day of April and October in each year. Each also bears upon its face a statement that it is trans- ferable only at the office of the city treasurer. From this it results that, whether technically bonds or promissory notes, the documents were not negotiable paper, and could not be made negotiable by any act or indorsement of William Scollans, the payee. When, intending to part with the property in the documents and in the rights of which they were the evidence, William Scollans delivered them to the plain- tiff in payment of a debt, the property in the documents and in the rights passed to the plaintiff. When so delivered to the plaintiff, each document bore upon its reverse side a stamped writing, signed by Wil- liam Scollans, and acknowledged by him before a justice of the peace to be his free act and deed. This stamped writing was of the follow- ing tenor: "Value received, I assign * * * tbe within certificate of the city of Boston stock, and hereby authorize the transfer thereof on the books of the city treasury." These Indorsements neither made purported to make the documenl itiable securities within the meaning of the law merchant. The documents remained in the same condition when they w< r< ti, or feloniou ly embezzled, by a person who delivered them in the same condition to a hank' as pledgee, and when they were sold at auction by that hank to the defendants, who (Juki i. , ' . -12 IS FORMATION OF THE CONTRACT thereupon filled in with their firm name the blank in each indorse- ment, and presented the documents to the city officials for cancellation, and received in return new certificates payable to themselves. Under our decisions the property of the real owner of documents of the nature of those now in question is not devested by a sale to a pur- chaser in good faith and for value from one who has got them feloni- ously from the true owner, nor by any subsequent dealing of such a purchaser with the documents, but the property remains with the true owner, from whom they were feloniously taken. The real ownership in such documents follows the general rule as to the ownership of chattels, the only exception to which is as to property which consists of the currency of the country, or securities which, by the law mer- chant, are negotiable. OTIerron v. Gray, 168 Mass. 573, 575, 47 N. E. 429, 40 L. R. A. 498, 60 Am. St. Rep. 411. See, also, Dame v. Baldwin, 8 Mass. 518; Jarvis v. Rogers, 13 Mass. 105; Id., 15 Mass. 389; Mason v. Waite, 17 Mass. 560; Wheeler v. Guild, 20 Pick. 545, 32 Am. Dec. 231 ; Stanley v. Gaylord, 1 Cush. 536, 48 Am. Dec. 643 ; Worcester County Bank v. Dorchester & Milton Bank, 10 Cush. 488, 57 Am. Dec. 120; Riley v. Power Co., 11 Cush. 11; Wyer v. Bank, 11 Cush. 51, 59 Am. Dec. 137; Chapman v. Cole, 12 Gray, 141, 71 Am. Dec. 739; Gilmore v. Newton, 9 Allen, 171, 85 Am. Dec. 749; Heckle v. Lurvey, 101 Mass. 344, 3 Am. Rep. 366; Spooner v. Holmes, 102 Mass. 503, 3 Am. Rep. 491; Hinckley v. Railroad Co., 129 Mass. 52, 37 Am. Rep. 297; McCann v. Randall, 147 Mass. 81, 94, 17 N. E. 75, 9 Am. St. Rep. 666; Bank v. Simmons, App. Cas. (1892) 201, 215; Bank v. Cady, 15 App. Cas. 267; Earl of Shef- field v. Bank, 13 App. Cas. 333 ; London & County Banking Co. v. London & River Plate Bank, 20 Q. B. Div. 232 ; Cole v. Bank, L. R. 10 C. P. 354; Crouch v. Credit Foncier of England, 8 Q. B. 374; Shaw v. Railroad Co., 101 U. S. 557, 25 L. Ed. 892; Knox v. Eden Musee Americain Co., 148 N. Y. 441, 42 N. E. 98S, 31 L. R. A. 779, 51 Am. St. Rep. 700; Barstow v. Mining Co., 64 Cal. 388, 1 Pac. 349, 49 Am. Rep. 705 ; Power Co. v. Robinson (C. C.) 52 Fed. 520. As the plaintiff is yet the true owner of the documents which the defendants have surrendered for cancellation, and for which they have in return received new certificates, payable to themselves, the defend- ants cannot sustain the verdicts which were ordered in their favor, except by showing that the evidence offered would, as matter of law, show that the plaintiff is estopped from setting up his true ownership as against them. Such an estoppel must bear looking at from two sides. The indorsements upon the documents, when the defendants took them, contained a blank the presence of which made it uncertain whether the payee had parted with his title. The presence of the blanks informed the defendants that the instruments passed to them must be other than they were to give the defendants a right to sur- render them for cancellation, and to receive new certificates in ex- change. Such blank transfers are consistent with the continued own- WnO CAST SELL 19 ership of the person who has executed them, and are also consistent with the ownership of some other person than the hearer; and where they do not purport, in terms, to confer ownership upon the bearer, the most which can be predicated of them, in the absence of evidence of custom or usage, is that they are made in aid of the true title, and not to defeat it, and that they are to be used only to help the true owner in procuring for himself the right of registration and the other rights of which the documents so indorsed are the evidence. See France v. Clark. 26 Ch. Div. 257. There was no evidence in the pres- ent case that such certificates with blank assignments pass in fact from hand to hand, like negotiable instruments, without inquiry as to the right of the bearer to dispose of them. Without such evidence we cannot assume that these documents were "in order," so as to make the act of taking them without inquiry as to how the title, originally in the payee, had come down to the bank of which the defendants bought "the act of a reasonable man reasonably dealing with matters of busi- ness." See Williams v. Bank, 38 Ch.' Div. 400, and Bank v. Cady, 15 App. Cas. 267, 270. Unless it is the custom to regard such docu- ments so indorsed as equivalent to securities to bearer, the blanks should have put the defendants upon inquiry, and they would not be in a position to contend that the true owner is estopped from asserting his title. Again, examining this contention of title by estoppel in the light of the plaintiff's own conduct, we are of opinion that it cannot be said, as matter of law, upon the evidence, that his conduct has been such as to prevent him from asserting his title against any one. The plaintiff has neither himself made, nor knowingly allowed to be made, any representation that the bearer of these documents with their assign- ments could transfer the property in them. If the possession of the certificates by the bank with the blank assignments indorsed enable 1 the bank of which the defendants bought to make in substance such a representation to the defendants, the giving of that possession was not the act of the plaintiff, and was possible only because of the commis- ; of a felony against him, of which he was not cognizant, and for which he was not re ble. The only other possible ground for an estoppel is negligence. While the plaintiff intrusted these documents to persons whose business it bankers and brokers, to sell securities, lie did not intrust them to the dep for sale or to pledge, hut simply for safe-keeping; and he had good rea on to suppose thai the documents remained in a afe, in an envelope marked with his own name, and sealed. The fact that the custodians of hi- securities were bankers and broki r . he no; intrusting the »ecuriti< !■• them in that capacity, did not make him ible for an unauthorized sale, possible only through the com mission of a felon}-. See Cole v. Bank, L. R. 10 C. I'. 369; Wood v. Rowcliffe, 6 Hare, 183; Urnb v. Attenborough, 1 Besl & S. 831 ; He} man v. Flewker, 13 C. B, 'X. S.) 51''; [enkyns v. Usborne, 7 Man. & 20 FORMATION OF THE CONTRACT G. 678; McEwan v. Smith, 2 H. L. Cas. 309; Kingsford v. Merry, 1 Hurl. & N. 503; Hardman v. Booth, 1 Hurl. & C. 803. If, therefore, he was negligent, either in intrusting the certificate to his depositaries for safe-keeping, or in not withdrawing them when he found that he had been credited with the certificates in account, and was falsely informed that they were still in the safe, or in continuing to trust to the honesty and integrity of his depositary, that negligence would seem not to have entered into the transaction by which the defendants bought and paid for the certificates, and not to have been a proximate cause of their purchase. See O'Herron v. Gray, 168 Mass. 573, 577, 47 N. E. 429, 40 L. R. A. 498, 60 Am. St. Rep. 411, and cases cited. See, also, Bank v. Stowell, 123 Mass. 196, 25 Am. Rep. 67 ; White v. Duggan, 140 Mass. 18, 20; Lumber Co. v. Eldridge, 171 Mass. 516, 51 N. E. 9, 14, 41 L. R. A. 617, 68 Am. St. Rep. 446. However this may be, we are of opinion that it cannot be held as matter of law that the plaintiff, upon the evidence offered, was guilty of negligence. He had at least the right to have that question passed upon by a jury. Exceptions sustained. O'CONNOR'S ADM'X v. CLARK. (Supreme Court of Pennsylvania, 1S95. 170 Pa. 318, 32 Atl. 1029, 29 L. E. A. 607.) Replevin by John O'Connor's administratrix against John Clark. Judgment for plaintiff, and defendant appeals. Sterrett, C. J. If there is nothing more in this case than the facts recited by the learned trial judge in the excerpt from his charge quoted in the first specification of error, the instructions therein given to the jury to find for the plaintiff if they believed the testimony would be substantially correct. The only facts of which this instruc- tion is predicated are (1) that the wagon in question was the proper- ty of John O'Connor, the original plaintiff; and (2) that Tracy, with- out his permission, took it, and sold it, or attempted to sell it, to the defendant as his own. But these are not the only facts of which there was evidence before the jury. On defendant's behalf, it is contended that the testimony tended to prove, and the jury, if they had been permitted, would have been warranted in finding, that defendant purchased the property in ques- tion from Tracy in the honest belief that he was in fact the owner thereof; that the name and occupation of Tracy — viz. "George Tracy, Piano Mover" — were on the wagon when he offered it for sale, and that fact was referred to as indicating his ownership of the property, etc. ; that, Tracy being a stranger, defendant was specially careful to inquire and inform himself that the person who was in possession of and offering to sell the wagon was the George Tracy whose name and occupation were painted thereon ; that Tracy's narnc WHO CAN SELL 21 and occupation were put upon the wagon with the knowledge of O'Connor, the original plaintiff, and himself, and by direction of the former, for the purpose of creating the impression and inducing the public to believe that the property belonged to Tracy, and was being used by him in his business as a piano mover, in which he had there- tofore been engaged. Without attempting to summarize the testi- mony relied on by the defendant, it is sufficient to say that it tends to prove substantially the state of facts above outlined, and especially that the original plaintiff, for his own gain and benefit, was a party to the arrangement whereby Tracy's name was put on the wagon for the purpose of misleading the public into the belief that the property was his, and that defendant, acting with due caution and in good faith, was thus misled as to the ownership of the property, and purchased the same from Tracy. While the soundness of the general rule of law that a vendee of personal property takes only such title or interest as his vendor has and is authorized to transfer cannot for a moment be doubted, it is not without its recognized exceptions. One of these is where the owner has so acted with reference to his property as to invest anoth- er with such evidence of ownership, or apparent authority to deal with and dispose of it, as is calculated to mislead, and does mislead, a good-faith purchaser for value. In such cases the principle of estoppel applies, and declares that the apparent title or authority, for the existence of which the actual owner was responsible, shall be re- garded as the real title or authority, at least so far as persons acting on the apparent title or authority, and parting with value, are con- cerned. Strictly speaking, this is merely a special application of the broad equitable rule that, where one of two innocent persons must suffer loss by reason of the fraud or deceit of another, the loss should fall upon him by whose act or omission the wrongdoer has been enabled to commit the fraud. Assuming, in this case, that a jury, under the evidence, should find — as we think they would be warranted in doing — that such marks of ownership were placed on the property by direction of O'Connor, the real owner, as were not only calculated to deceive, but actually Intended to deceive, the public, and that by reason thereof, and with- out any fraud or negligence on his part, the defendant was misled into the belief that Tracy was the real owner, and he accordingly boughl and paid him for the property, can there be any doubt, as be- tween the real owner and the innocent purchaser, that the loss should fall upon the former, by whose acl Tracy was enabled to thus fraud ulently jell and receive the price of the property? We think not. In Barnard v. Campbell, 55 X. Y. 456, 14 Am. Rep. 289 j Id., 58 N. Y. 73, 17 Am. Rep. 208,- a well considered case, involving sub stantially the same principle, it was held thai to create an estoppel by which an owner is prevented from a serting title to and is di prived of his property by the acl of a third person, without his 22 FORMATION OF THE CONTRACT sent, two things must concur: "(1) The owner must have clothed the pnsou assuming to dispose of the property with the apparent title to or authority to dispose of it. (2) The person alleging the estoppel must have acted and parted with value .upon the faith of such apparent ownership or authority, so that he will be the loser if the appearances to which he trusted are not real." Without further consideration of the questions involved, we think the testimony to which reference has been made tended to prove facts which, if found by the jury, would have brought the case with- in the principle of estoppel above stated, and that the learned judge, by the instructions above complained of, virtually withdrew the ef- fect of that testimony from the consideration of the jury. In defend- ant's second point, he was requested to charge : "If the jury rind from the evidence that the plaintiff's intestate allowed Tracy to put his name on the wagon, and made no effort to efface it, and thereby allowed the defendant to be misled, their verdict must be for the de- fendant." This was refused, with the remark that he had already instructed them that their verdict ought to be for the plaintiff in the event of their believing the testimony. It follows from what has been .said that the first and third specifi- cations should be sustained. The second specification is dismissed. As presented, defendant was not entitled to an affirmance of the point therein recited. Judgment reversed, and a venire facias de novo awarded. JETTON v. TOBEY. (Supreme Court of Arkansas, 1896. 62 Ark. 84, 34 S. W. 531.) Replevin by A. P. Jetton against Franklin Tobey. There was a judgment for defendant, and plaintiff appeals. Battle, J. 4 Three creditors of David B. Looney, to wit, Fleet- wood Morris, R. M. Jetton, and J. P. Falconer, brought three sepa- rate actions against him before a justice of the peace of Sebastian county, each one suing for himself, and causing an order of attach- ment to be issued in his case. A. P. Jetton was duly appointed spe- cial constable to serve process in the action instituted by R. M. Jetton. A mare and other property of the defendant were attached, the mare being first attached in the suit instituted by R. M. Jetton, and thereafter in the other two actions. After this the attaching creditors met to divide the property among themselves, some wit- nesses say, for the purpose of saving costs, and to hold subject to the attachments, and another says, for the purpose of paying the debts of the defendant to themselves, the brother of the defendant, who had possession of the property at the time it was attached, assenting. 4 Part of the opinion is omitted. wno CAN SELL 23 In the division the mare was delivered to Falconer, who carried her to Franklin county, and sold her to Franklin Tobey on a credit. Thereafter A. P. Jetton, who served the order of attachment sued out by R. M. Jetton, demanded the mare of Tobey, and, he refusing to comply with the demand, brought this action against him for her possession in Franklin county. The property sued for was delivered to the plaintiff. In the meantime David B. Looney, having been ab- sent, returned, and compromised and paid his indebtedness to Mor- ris and R. M. Jetton ; and the three actions against Looney were dismissed, the attachments were discharged, and the mare was re- turned to him (Looney) by A. P. Jetton, who had previously gained possession of her by the suit against Tobey. The dismissal of the action of Jetton against Looney and the discharge of the attach- ment therein were subsequent to the institution of the suit against Tobey. There does not appear to have been any payment of the indebtedness of Looney to Falconer. In the trial of the issues in the action against Tobey the foregoing facts were shown by the evidence. It was further shown that Tobey had no notice of any defect in the title of Falconer to the mare at the time he purchased her. * * * The jury returned a verdict in favor of the defendant. A judg- ment was rendered accordingly, and the plaintiff appealed. The jury were virtually told by the instructions of the court that if Tobey purchased the property in controversy in good faith, with- out any notice of any defect in the title of his vendor, he was entitled to recover, notwithstanding the person from whom he purchased had and was entitled to nothing more than possession. That is not true. A general rule of the law of personal property is that no man can sell that which he has not, and is not authorized by the owner to transfer, or confer a better title than that he has. An honest pur- chaser under a defective title cannot hold against the true propri- etor, o '>ne can transfer to another a better title than he has himself, is a maxim," says Chancellor Kent, "alike of the common and civil law, and a sale ex vi termini imports nothing more than that the bona fide purchaser succeeds to the rights of the vendor." To this rule, however, there are exceptions. Among them are enumerated the following: Transfers of money, bank bills, checl and notes payable to bearer, or transferable by delivery in the or- dinary course of business to a person taking them bona fide and paying value for them (Fawcetl v. Osborn, 32 111. 411, 83 Am. Dec. i; bona fide pui from fraudulenl buyers, or others hav- ing a voidable or defeasible title; and, in England, sales in market overt, an exception which do< nol prevail in this country. * * * Ti ion of personal property, withoul other evidem of title, or authority from the owner to ell, will nol enable the pos ■ • confer a better title than he actually has. As said by Chief 24 FORMATION OF THE CONTRACT Justice Brickell in Leigh v. Railroad Co., 58 Ala. 178: "Possession is prima facie evidence of the ownership of all species of personal prop- erty. It is but prima facie, and whoever deals alone on the faith of it must accept it as such, and in subordination to the paramount title, which would prevail over it if the possession was not changed by the transaction into which he enters. If this be not true, a felon acquir- ing possession by theft could, by a sale to an innocent purchaser, di- vest the true owner of his property. A naked bailee, intrusted with possession, could dispose of goods to the prejudice of his principal. A case does not fall within the exception unless the owner confers on the vendor other evidence of ownership, or of authority to dispose of the goods, than mere possession." As an example take the case of Simpson v. Shackelford, 49 Ark. 63, 4 S. W. 165. The owner in that case conditionally sold and delivered a corn mill, with the understand- ing that the title would remain in him until the purchase money was paid. The vendee sold to another without any notice of any defect in his title, and delivered possession. The purchase money of the first sale was not paid, and the original vendor sued for the property, and recovered it; the court holding that the second vendee, though a bona fide purchaser, acquired no title as against him. McMahon v. Sloan, 12 Pa. 229, 51 Am. Dec. 601 ; Andrew v. Dieterich, 14 Wend. (N. Y.) 31; Covill v. Hill, 4 Denio (N. Y.) 323. If, in this case, Falconer did not acquire title to the mare in con- troversy by purchase from Looney, or an agent authorized to dis- pose of her in payment of his debts, he was a mere custodian of her at the time he sold her to Tobey, and held her subject to the right of the special constable to take possession. He could have acquired no other right from A. P. Jetton in his official capacity; and, conse- quently, if this was all the claim he had, transferred no title by the sale to Tobey. Another fact that defeats Tobey's right to the claims of a bona fide purchaser is, he purchased on a credit, and never paid the pur- chase money. A. P. Jetton, as special constable, acquired a special property and right to the possession of the property when he seized under the or- der of attachment, and had the right to institute this action. He was liable to David B. Looney for her when the attachments were dis- charged, if Looney was then her owner, and, of course, was entitled to her possession for the purpose of discharging that obligation. * * * Reversed. SUBJECT-MATTER OF SALE 25- III. Subject-Matter of Sale 5 HALL v. GLASS et al. (Supreme Court of California, 1899. 123 Cal. 500, 56 Pac. 336, 69 Am. St. Rep. 77.) Commissioners' Decision. Action by Ernest E. Hall against Albert W. Glass and others. Judgment for plaintiff, and defendants Albert W. Glass and Jane Roe Glass appeal. Prixgle, C. Appeal from judgment, with bill of exceptions. Action brought to foreclose a chattel mortgage upon crops growing and to be grown. Mortgage made to secure the payment of a note for $1,550, bearing date, January 24, 1895, payable one day after date, and also such other sums as the mortgagee might advance to the mortgagor during the continuance of the mortgage, provided that such advances shall be at the exclusive discretion and option of the mortgagee. The mortgage covers "all the crop and products of what- ever nature which are now standing or growing, or which shall or may hereafter at any time be sown, planted, cut, or harvested by the said party of the first part during the continuance of this mortgage, on the following described lands and premises, and every part and portion thereof, to wit." Now follows description of two parcels of land, one owned by the mortgagor, A. W. Glass, and known as the "Glass Ranch," and the other held by him under lease. "This mortgage is intended to cover all the land farmed by the said A. W. Glass." The mortgagor covenants that "he will carefully tend, take care of, and protect the said crop while growing and until fit for har- vesting, and then faithfully and without delay harvest, thresh, clean, and sack all the grain of every description raised upon said premises, and bale all the hay raised thereon in bales of approved and merchant- able sizes, and put all the other products raised upon said premises in shape for market, and immediately deliver all said products into the possession of the party of the second part in the town of Pleasanton, v etc. A. W. Glass, the mortgagor, filed his petition in insolvency on Oc- tober, 23, 1895, and was discharged from his debts on March 11, "Prior to the filing of the petition in insolvency, but subsequent to the making of note and mortgage," I.. I'.. Glass made a declaration of homestead upon the Glas ranch, and the same was set apart as homestead by the insolvency court by order of December 7, 1895. A. W. Glass has always continued in po i ion of the Glass ranch. In the foreclosure proceeding receiver was appointed to take pos- session and manage the crops of the year 1895; and another receiver o For i [on of principles, see Tiffany, Bales (2d Ed.) §§ 11%-13. 26 FORMATION OF THE CONTRACT was appointed to take possession and manage the crops of 1896. A decree was entered in favor of the plaintiff, directing the receivers to apply the proceeds of the crops of those two years in their hands towards the payment of the amount found due to plaintiff. No other relief is granted. Appeal from the judgment is taken by A. W. Glass and L. B. Glass, who answered, as the wife of A. W. Glass. The de- fendant Veale, sued as sheriff of Contra Costa county, and appointed assignee in insolvency of A. W. Glass, does not appeal. There is no contest over the proceeds of the crop of the year 1895. The conten- tion of the appellants is that the mortgage is not a lien upon the crop of 1896. The first point made by the appellants is that the crops to be grown after 1895 are not designated with sufficient certainty to create a lien thereon, against the homestead right of the appellants or the insolvency of A. W. Glass. There is no serious contention that a chattel mort- gage cannot cover crops unplanted. That point was directly decided in Arques v. Wasson, 51 Cal. 620, 21 Am. Rep. 718. The contention is that the subject of the mortgage must be clearly defined, and that this mortgage does not define same with sufficient certainty, there being no defined limit to the continuance of the mortgage during which the lien is to continue. In support of this position, counsel cite several cases from Iowa and one from Nebraska. The leading case in Iowa is Pennington v. Jones, 57 Iowa, 37, 10 N. W. 274. The mortgage covered sundry acres of grain of different kinds, "to be sown and raised on the land leased of Barber McDowell, and now occupied by said W. A. McDowell (the mortgagor), lying and being in section 17," etc. The court held the mortgage invalid, because it did not state "that all the crops to be grown for any specified number of years were mortgaged," saying that "before a mortgage on crops to be sown or planted can be regarded as valid, as against third persons, the year or term the crops are to be grown must be stated." In Muir v. Blake, 57 Iowa, 622, UN. W. 621, the mortgage said: "All the crops raised by me in any part of Jones county for the term of three years." The court held that this was a "roving description, with nothing in the way of identification to suggest inquiry where the crops may be found except the body of the county." In Eggert v. White, 59 Iowa, 465, 13 N. W. 426 : "All and the entire crop of flax and wheat and other grain or produce raised on the east half of. * * * " Held invalid, "because the year the same was to be grown is not stated." In Cole v. Kerr, 19 Neb. 554, 26 N. W. 598: "Seventy-five acres of corn to be planted, fifty acres of broom corn to be planted, tended, and de- livered in June," etc. Held, that "to be planted" would apply to all corn "which might thereafter be found in Adams county." In all of these cases there are elements of uncertainty, either in the place or time of the planting. In the present case the description of the premises is specific. The alleged element of uncertainty is the term "during the continuance of the mortgage." SUBJECT-MATTER OF SALE 27 The appellants contend that the provision in the mortgage that it is intended to secure any future advances which mortgagee may make to mortgagor introduces an element of uncertainty, in this: That by such advances the mortgage may be kept alive indefinitely beyond the statutory time of the note. There is, however, under our decisions, a limit to the continuance of a mortgage as against subsequent pur- chasers or incumbrancers. In a line of cases in this court, beginning with Lord v. Morris, 18 Cal. 482, it has been well settled that subse- quent purchasers or incumbrancers may rely upon the apparent ex- piration of the mortgage, and will hold against a prior mortgage in spite of an extension or renewal of the debt beyond its statutory life. By the same reasoning, subsequent advances, although contracted for by the mortgagor, cannot extend the apparent maturity of the mort- gage against subsequent purchasers. This rule, in reference to future advances, as laid down in the cases, is a limit to the life of a mortgage. It is said in Tapia v. Demartini, 77 Cal. 387, 19 Tac. 641, 11 Am. St. Rep. 288, that, where a mortgage is given to secure future advances, the mortgagee cannot safely make such advances where he has actual notice of a sale or incumbrance made by the mortgagor. And in Jones, Chat. Mortg. (3d Ed.) § 97, it is said: "The general rule is that a prior mortgagee is affected only by actual notice of a subsequent in- cumbrance, and not by constructive notice ; but there are numerous authorities which hold that if the mortgagee has the option to make the advances or not, as he chooses, the mortgage, as to each advance made upon it, is to be regarded as a fresh mortgage, and is subject to the lien of any incumbrance which has been duly recorded at the time the advance is made, whether the mortgagee has actual notice of it or not. " In view of these authorities, the term "during the continuance of mortgage" has a defined meaning. It cannot be said, as claimed by the appellants, that the mortgage could be continued ad infinitum. in any event, the mortgage is good to the extent of the crops planted during the life of the note. The uncertainty of description insisted upon by appellants is in the doubtful period beyond the life of the note. There can be no question that the mortgage may be good to the extent .hat is certain and definite, even if it be bad for the rest. In one of tin' i ited by the appellants (Luce v. Moorehead, 7$ Iowa, X. W. 598 1 5 Am. St. Rep. 695]), it was said: "An instrument .- be valid as to the property sufficiently described, and void for the uncertainty of the description of oilier property." This view ni!.' lent to sustain the ruling of the court below, w hii li nly to the crops <>f the first two years. Anoth tention of the' appellants is that, the proceedings in in v having been in tituted in L895, there was then no lien u] the 6 which were then unplanted, and, the debl being dis- ci by tl . there was no debl to sustain any lien to er when the crop began to have an existence. They cite 28 FORMATION OF THE CONTRACT the case of Mayer v. Taylor, 69 Ala. 403, 44 Am. Rep. 522, to the effect that the lien actually attaches only when the property comes into existence. But the case recognizes the equitahle lien attaching to the potential existence, by virtue of which the mortgage of an unplanted crop is valid. The case holds that this equitable mortgage was su- perior to a subsequent mortgage made after the crop was planted. And our case of Arques v. Wasson, supra, rests upon the same ground, — that there is in such cases a potential existence which sustains the lien of the mortgage. After this lien is created, insolvency proceedings cannot affect the debt to the impairment of the lien. In Arques v. Wasson this lien prevailed against an attachment and execution. In Mayer v. Taylor it prevailed against a mortgage made after the crop was planted. Certainly, proceedings in insolvency have no stronger legal or equitable force than purchasers for valuable consideration. But, say the appellants, this is a contract for continuing personal services ; and they cite the case of Mooney v. Detrick, 85 Cal. 549, 22 Pac. 1111, 26 Pac. 280, which holds that the debt due by one who engages the time and services of another is discharged by the insol- vency. Conceding, without deciding, that the converse of this is sound, — that a covenantor is released from his contract for service by insolvency, — yet the personal services in this case are not ' the debt or of the essence of the debt. The covenant of this mortgage that the mortgagor should tend, protect, and take care of the crop, and deliver it to the mortgagee, is merely collateral to the real indebted- ness, and for the better enforcement of the lien. By virtue of the debt and the lien, the mortgagee is entitled to hold all the crops grown and tended by the mortgagor; and the mortgagor covenants to tend and protect the crops, and deliver them to the mortgagee. That his serv- ices in that respect are not the debt which the mortgage secures, nor of the essence of the debt, is made clear by the fact that provision is made in the mortgage that, in case of his breach of this covenant, the mortgagee might enter upon the premises, and take all measures nec- essary for the protection of the crops and products, and expressly appointing the mortgagee the attorney of the mortgagor for that pur- pose. The covenants in that respect are very significant: "And the party of the first part does hereby covenant and agree to and with the said party of the second part, its successors and assigns, that he and they will carefully tend, take care of * * * ; that, in default of any or either of the above acts to be done by the said party of the first part, the party of the second part, his successors or assigns, may enter into or upon the said premises, and take all measures necessary for the protection of said crops or products or his interest therein,, etc. * * * And the said party of the first part does, for the pur- pose aforesaid, make, constitute, and appoint the said party of the second part, or his successors or assigns, his true and lawful attorney irrevocable, with full power to enter upon said premises and take pos- session of said crops and take care of, protect, thresh, clean, and SUBJECT-MATTER OF SALE 29 sack or bale the same in case of any default on the part of the cove- nants herein contained." It would be unreasonable to hold that a release of the mortgagor from these subsidiary services would de- stroy the lien which is so carefully guarded against any injury to arise from the absence of the subsidiary services. And the case is stronger, if possible, against an insolvent who himself institutes pro- ceedings to disqualify himself. Substantially the same argument is urged by appellants in reference to the declaration of homestead made after the mortgage, and before the crop of 1896 was planted. But the argument has no greater force in favor of a homestead right than in favor of a sale for value or proceeding in insolvency. Establish the fact that there is sufficient potential existence in the coming crops to sustain a legal or equitable lien upon them, and the lien must prevail against subsequent pur- chasers of every kind; otherwise, it is no lien at all. The objection made in all the cases to the descriptions is that they are not sufficient to impart notice. In one of the cases cited by appellants the certainty of description required is said to be "sufficient if it be such as to en- able third parties, by inquiries, which the instrument itself indicates and directs, to identify the property covered by it." Muir v. Blake, 57 Iowa, 665, UN. W. 623. As the alleged element of uncertainty in this case was the continuance of the mortgage, the fact that it was in force in 1895 and 1896 was within the knowledge of one homestead claimant, and easily ascertained by the other. Appellants insist that there is error in not making a specific finding that L. B. Glass is the wife of A. W. Glass. But her rights were protected. She was a party to the action. She answered as the wife, declaring herself to be his wife. It is found that she made a declara- tion of homestead upon his property; and she set up in her answer the homestead which she had declared upon the land of her husband. Under these circumstances, the absence of a special finding has done her no harm. Criticism is made of the form of the decree, the point of objection being that it contains the usual clause that the defendants and those claiming under them are barred and foreclosed of all equity of re- demption in or claim to "the mortgaged property," but that no sale of property is ordered. The operative words of the decree are that the moneys which have come into the bands of the receivers from the s of the crops of 1895 and 1896 be applied towards the payment of the ascertained debt. These sales appear to have been made by the ivers under orders of court presumably correct, as no objection to them appears in the records. The clause by which the defendants are barred and foreclosed of any right of redemption "in the moi property" cannot he appropriately applied to any future crops nol sold or ordered to he sold, hut may properly he referred to what have been sold by the receivers, and the proceeds of which are ordered to be applied towards the payment of the debt. The respondent, in his 30 FORMATION OF THE CONTRACT points and authorities, declares that he "is satisfied with the decree"; and, as there is nothing in the decree reserving any right to further proceedings in the action, the jurisdiction is exhausted, and the clause in question, if error, is not prejudicial. I advise that the judgment be affirmed. PER Curiam. For the reasons given in the foregoing opinion, the judgment is affirmed. GRANTHAM v. HAWLEY. (Court of King's Bench, 1619. Hobart, 132.) Robert Grantham brought an action of debt upon an obligation of forty pounds against Edward Hawley, the condition whereof was, that if a certain crop of corn growing upon a certain piece of ground, late in the occupation of Richard Sankee, did of right belong to the plaintiff, then the defendant should pay him for it twenty pounds. Now the case upon the pleading and demurrer fell out thus ; that one Sutton was seised of the land, and 30 Ehz. in April, made a lease of it to Richard Sankee for twenty-one years by indenture, and did thereby covenant, grant to and with Sankee, his executors and assigns, that it shall be lawful for him to take and carry away, to his own use, such corn as should be growing upon the ground at the end of the term. Then Sutton conveyed the reversion to the plaintiff ; and John Sankee, executor to Richard, having sowed the corn, and that being growing upon the ground at the end of the term, sold it to the defendant. And it was argued by Hutton for the plaintiff, that it was merely contingent whether there should be corn growing upon the ground at the end of the term, or not. Also, the lessor never had property in the corn ; and therefore could not give nor grant it, but it sounded properly in covenant; for the right of the corn standing in the end of the term being certain, accrues with the land to the lessor ; and it was said to be adjudged. And it was agreed by the court that if A., seised of land, sow it with corn, and then convey it away to B. for life, remainder to C. for life, and then B. die before the corn reapt; now C. shall have it, and not the executors of B., though his estate was uncertain. Note, the reason of industry and charge in B. fails ; yet judgment in this case was given against the plaintiff, that is, that the property and very right of the corn, when it happened, was past away; for it was both a covenant and a grant. And therefore if it had been of natural fruits, as of grass or hay, which run merely with the land, the like grant would have carried them in property after the term. Now though corn be fructus industrialis, so that he that sows it may seem to have a kind of property, ipso facto, in it, divided from the land; and therefore the executor shall have it, and not the heirs; yet in this case, all the colour that the plaintiff hath to it, is by the SUBJECT-MATTER OF SALE 31 land which he claims from the lessor which gave the corn. And though the lessor had it not actually in him, nor certain, yet he had it po- tentially ; for the land is the mother and root of all fruits. There- fore he that hath it may grant all fruits that may arise upon it after and the property shall pass as soon as the fruits are extant, as 21 H. 6. A parson may grant all the tithe wool that he shall have in such a year; yet perhaps he shall have none; hut a man cannot grant all the wool that shall grow upon his sheep that he shall huy here- after; for there he hath it neither actually nor potentially. And though the words are here not by words of gift of the corn, but that it shall be lawful for him to take it to his own use, it is as good to transfer the property; for the intent and common use of such words, as a lease without impeachment of waste, for the like reason, and not ex vi termini, gives the trees. HOLROYD v. MARSHALL,. (House of Lords, 1SG2. 10 H. L. Cas. 191.) James Taylor carried on the business of a damask manufacturer at Hayes Mill, Ovenden, near Halifax, in the county of York. In 1858 he became embarrassed, a sale of his effects by auction- took place, and fhe Holroyds. who had previously employed him in the way of his business, purchased all the machinery at the mill. The machinery was not removed, and it was agreed that Taylor should buy it back for £5,000. An indenture, dated the 20th of September, 1858, was ex- ecuted, to which A. P. and W. Holroyd were parties of the first part, James Taylor of the second part, and Isaac Brunt of the third part. This indenture declared the "machinery, implements, and things spec- ified in the schedule hereunder written and fixed in the said mil!,'" to belong to the Holroyds; that Taylor had agreed to purchase the same for £5,000, but could not then pay the purchase money, wherefore it 1, &c, that "all the machinery, implements, and things spec- ified in the schedule (hereinafter designated 'the said premises')" were d to Brunt, in trust for Taylor, until a certain demand for pay- ment should be made upon him, and then, in case he should pa) the Holroyds a sum of £5,000, with interest, for him absolutely. If dffau.lt in payment was made, Brunt was to have power to sell, and hold the 'I in pursuance of tin- tip t for sale, upon trust, to pay die Holroyds, and to pay the surplus, if any, to Taylor. The in- denture, in addition to a clause binding Taylor, during the continua of the trust, to in mv to the ext( n to or substitu- tion for tin- -aid premises, or any part tl shall, during such con- tinuance as afore aid, he subject to the trusts, powers, provisos, and 32 FORMATION OF THE CONTRACT declarations hereinbefore declared and expressed concerning the said premises; and that the said James Taylor, his executors, &c, will at all times, during such continuance as aforesaid, at the request, &c, of the said Holroyds, their executors, &c, do all necessary acts for assuring such added or substituted machinery, implements, and things, so that the same may become vested accordingly." The deed was, four days afterwards, duly registered, as a bill of sale, under 17 & 18 Vict, c. 36. Taylor, who remained in possession, sold and exchanged some of the old machinery, and introduced some new machinery, of which he rendered an account to the Holroyds before April, 1860; but no conveyance was made of this new machinery to them, nor was any act done by them, or on their behalf, to constitute a formal taking of possession of the added machinery. On the 2d April, 1860, the Hol- royds served Taylor with a demand for payment of the £5,000 and interest, and no payment, being made, they, on the 30th April, took possession of the machinery, and advertised it for sale by auction on the 21st May following. On the 13th April, 1860, Emil Preller sued out a writ of scire facias against Taylor for the sum of £155. 18s. 4d., damages and costs, which was executed on the following day by James Davis, an officer of Mr. Garth Marshall, then high sheriff of York. On the 10th May, 1860, a similar writ, for £138. 3s. 3d., was executed by Davis, and on the 25th May, 1860, the property was sold by the sheriff. Notice was given to the sheriff of the bill of sale executed in favour of the Hol- royds. The only part of the machinery claimed by the execution creditors consisted of those things which had been purchased by Taylor since the date of the bill of sale. The sheriff insisted on taking under the writs these added articles, and the Holroyds, on the 30th May, 1860, filed their bill against the sheriff, and the other necessary par- ties, praying for an assessment of damages and general relief. The cause was heard before Vice Chancellor Stuart, who on the 27th July, 1860, made an order, declaring that the whole machinery in the mill, including the added and substituted articles, at the time of the execu- tion, vested in the plaintiffs by virtue of the bill of sale. On appeal, before Lord Chancellor Campbell, on the 22d December, 1S60, the vice chancellor's order was reversed. This present appeal was then brought. Mr. Malins and G. V. Yool, for appellants. Mr. Amphlett and Mr. Hobhouse, for respondents. Lord Chancellor Westbury, 6 after stating the facts of the case, said: My lords, the question is whether as to the machinery added and substituted since the date of the mortgage the title of the mortgagees, or that of the judgment creditor, ought to prevail. It is admitted that the judgment creditor has no title as to the machinery originally com- e Parts of the opinions the Lord Chancellor and Lord. Chelmsford are omitted. SUBJECT-MATTER OF SALE 33 prised in the bill of sale ; but it is contended that the mortgagees had no specific estate or interest in the future machinery. It is also ad- mitted that if the mortgagees had an equitable estate in the added machinery, the same could not be taken in execution by the judgment creditor. The question may be easily decided by the application of a few # ele- mentary principles long settled in courts of equity. In equity it is not necessary for the alienation of property that there should be a formal deed of conveyance. A contract for valuable consideration, by which it is agreed to make a present transfer of property, passes at once the beneficial interest, provided the contract is one of which a court of equity will decree specific performance. In the language of Lord Hardwicke, the vendor becomes a trustee for the vendee ; sub- ject, of course, to the contract being one to be specifically performed. And this is true, not only of contracts relating to real estate, but also of contracts relating to personal property, provided that the latter are such as a court of equity would direct to be specifically performed. A contract for the sale of goods, as, for example, of five hundred chests of tea, is not a contract which would be specifically performed, because it does not relate to any chests of tea in particular; but a contract to sell five hundred chests of the particular kind of tea which is now in my warehouse in Gloucester, is a contract relating to specific property, and which would be specifically performed. The buyer may maintain a suit in equity for the delivery of a specific chattel when it is the subject of a contract, and for an injunction (if necessary) to restrain the seller from delivering it to any other person. The effect in equity of a mere contract as amounting to an aliena- tion, may be illustrated by the law relating to the revocation of wills. If the owner of an estate devises it by will, and afterwards contracts to sell it to a purchaser, but dies before the contract is performed, the will is revoked as to the beneficial or equitable interests in the estate, for the contract converted the testator into a trustee for the purchaser ; and, in like manner, if the purchaser dies intestate before performance of the contract, the equitable estate descends to his heir at law, who may require the personal representative to pay the purchase money. But all this depends on the contract being such as a court of equity would decree to be specifically performed. Tl n be no doubt, then thai if the up deed in the had contained nothing but the contract which is involved in the aforesaid lant of Taylor, the mortgagor, such contract would have amounted to a valid assignment in equity of the whole of the machinery and chattels in question, supposing such machinery and effects to have been in . and upon the mill at the time of the execution of the deed. lint it i> alleged that this is not the effect of the contract, because it relates to machinery not existing at the time, but to be acquired and Cooi by Cases Saij 8 34 FORMATION OP THE CONTRACT fixed and placed in the mill at a future time. It is quite true that a deed which professes to convey property which is not in existence at the time is as a conveyance void at law, simply because there is nothing to convey. So in equity a contract which engages to transfer proper- ty, which is not in existence, cannot operate as an immediate alienation merely because there is nothing to transfer. But if a vendor or mortgagor agrees to sell or mortgage property, real or personal, of which he is not possessed at the time, and he receives the consideration for the contract, and afterwards becomes possessed of property answering the description in the contract, there is no doubt that a court of equity would compel him to perform the contract, and that the contract would, in equity, transfer the beneficial interest to the mortgagee or purchaser immediately on the property being acquired. This, of course, assumes that the supposed contract is one of that class of which a court of equity would decree the specific performance. If it be so, then immediately on the acquisition of the property described the vendor or mortgagor would hold it in trust for the purchaser or mortgagee, according to the terms of the con- tract. For if a contract be in other respects good and fit to be per- formed, and the consideration has been received, incapacity to perform it at the time of its execution will be no answer when the means of doing so are afterwards obtained. Apply these familiar principles to the present case; it follows that immediately on the new machinery and effects being fixed or placed in the mill, they became subject to the operation of the contract, and passed in equity to the mortgagees, to whom Taylor was bound to make a legal conveyance, and for whom he, in the mean time, was a trustee of the property in question. There is another criterion to prove that the mortgagee acquired an estate or interest in the added machinery as soon as it was brought into the mill. If afterwards the mortgagor had attempted to remove any part of such machinery, except for the purpose of substitution, the mortgagee would have been entitled to an injunction to restrain such removal, and that because of his estate in the specific property. The result is, that the title of the appellants is to be preferred to that of the judgment creditor. Some use was made at the bar and in the court below of the lan- guage attributed to Mr. Baron Parke in the case of Mogg v. Baker, 3 Mees. & W. 198. That learned judge appears to have given, not his own opinion, but what he understood would have been the deci- sion of a court of equity upon the case. He is represented as speak- ing upon the authority of one of the judges of the court of chancery. Any communication so made was of course extra-judicial, and there is much danger in making communications of such a nature the ground of judicial decision; but I entirely concur in what appears to have been the principle intended to be stated ; for Mr. Baron Parke, speak- ing of the agreement in the case, says, "It would cover no specific SUBJECT-MATTER OF SALE 33 furniture, and would confer no right in equity." I have already ex- plained, that a contract relating to goods, but not to any specific goods, would not be the subject of a decree for specific performance, and that a contract that could not be specifically performed would not avail to transfer any estate or interest. If, therefore, the contract in Mogg v. Baker related to no specific furniture, it is true that it would not, at the time of its execution, confer any right in equity; but it is equally true that it would attach on furniture answering the contract when acquired, provided the con- tract remained in force at the time of such acquisition. Whether a correct construction was put upon the agreement in Mogg v. Baker is a different question, and which it is needless to con- sider, as I am only desirous of showing that the proposition stated by the learned judge is quite consistent with the principles on which this case ought to be decided. I therefore advise your lordships to reverse the order of Lord Chan- cellor Campbell, and direct the petition of rehearing presented to him to be dismissed, with costs. Lord Chelmsford. My lords, this case, which has become of great importance, has been twice fully and ably argued, there having been a difference of opinion amongst your lordships upon the first argument, which made it desirable that a second should take place. Upon the original argument I thought that the decree of my late noble and learned friend, Lord Campbell, could not be maintained ; but I came to this conclusion with all the deference due to his great legal experience, and with the more doubt as to the soundness of my views, upon finding not only that he adhered to his opinion on hearing the question argued in this house, but that he was supported in it by my noble and learned friend, Lord WENSLEydalE, for whose judg- ment (it is unnecessary to say) I entertain the most sincere respect. Aware that I was opposed to such eminent authorities, I listened to the second argument with the most earnest and anxious attention ; but nothing which 1 heard in the course of it tended to shake the • which I had originally formed. 1 should, therefore, have been com- pelled to -tate this opinion under such discouraging circumstances, if I had not happily been fortified by the concurrence of the noble and learned lord upon the wool sack, before whom the last argument t< place. His great learning and long experience in courts of equity ify ni'- now in expressing myself with some confidence in a case in which his views coincide with mine, and which is to he decided Upon equitabl inds and princip In considering the question, I propose t" advert to the various poinl i which were touched upon in the course of both the arguments, al- though upon the l.i t occasion many were omitted which were raised upon the Int. The question in the case is, whether the appellants, wh<> have an equitable title as mo of certain machiner} fi and placed in a mill, of which the mortgagor, Jame Taylor, was ten 36 FORMATION OF TITE CONTRACT ant, are entitled to the property which was seized by the sheriff, under two writs of execution issued against the mortgagor, in priority to those executions, or either of them? The title of the appellants depends upon a deed dated the 20th Sep- tember, 185S. [His lordship here stated the bill of sale and the other facts of the case.] The machinery sold by the sheriff was more than sufficient to satisfy the first execution, and the appellants claiming a preference over both executions, contend that the possession taken by them on the 30th April entitled them, at all events, to priority, over the second execution of the 11th May. The great question, however, is, whether they are entitled to a preference over the first execution by the mere effect of their deed? or whether it was necessary that some act should have been done after the new machinery was fixed or placed in the mill, in order to complete the title of the appellants? It was admitted that the right of the judgment creditor, who has no specific lien, but only a general security over his debtor's property, must be subject to all the equities which attach upon whatever prop- erty is taken under his execution. But it was said (and truly said) that those equities must be complete, and not inchoate or imperfect, or in other words, that they must be actual equitable estates, and not mere executory rights. What, then, was the nature of the title which the mortgagees ob- tained under their mortgage deed? If the question had to be decided at law, there would be no difficulty. At law an assignment of a thing which has no existence, actual or potential, at the time of the ex- ecution of the deed, is altogether void. Robinson v. Macdonnell, 5 Maule & S. 228. But where future property is assigned, and after it comes into existence, possession is either delivered by the assignor, or is allowed by him to be taken by the assignee, in either case there would be the novus actus interveniens of the maxim of Lord Bacon, upon which Lord Campbell rested his decree, and the property would pass. It seemed to be supposed upon the first argument that an assignment of this kind would not be void in law if the deed contained a license or power to seize the after-acquired property. But this circumstance would make no difference in the case. The mere assignment is itself a sufficient declaratio prcecedens in the words of the maxim; and although Chief Justice Tindal, in the case of Lunn v. Thornton, 1 C. B. 379, said, "It is not a question whether a deed might not have been so framed as to give the defendant a power of seizing the future per- sonal goods," he must have meant, that under such a power the as- signee might have taken possession, and so have done the act which was necessary to perfect his title at law. This will clearly appear from the case of Congreve v. Evetts, 10 Exch. 298, in which there was an assignment of growing crops and effects as a security for money lent, with a power for the assignee to seize and take possession of the crops and effects bargained and sold, and of all such crops and effects SUBJECT-MATTER OF SALE 37 as might be substituted for them ; and Baron Parke said, "If the au- thority given by the debtor by the bill of sale had not been executed, it would have been of no avail against the execution. It gave no legal title, nor even equitable title, to any specific goods ; but when executed not fully or entirely, but only to the extent of taking possession of the growing crops, it is the same in our judgment as if the debtor himself- had put the plaintiff in actual possession of those crops." And in Hope v. Hayley, 5 El. & Bl. 830, 845 (a case much relied upon by the vice chancellor), where there was an agreement to transfer goods, to be afterwards acquired and substituted with a power to take posses- sion of all original and substituted goods, Lord Campbell, Chief Justice, said, "The intention of the contracting parties was, that the present and future property should pass by the deed. That could not be carried into effect by a mere transfer ; but the deed contained a license to the grantee to enter upon the property, and that license, when acted upon, took effect independently of the transfer." I have thought it right to dwell a little upon these cases, both on account of some expressions which were used in argument respecting them, and also because in determining the present question it is useful to ascertain the precise limits of the doctrine as to the assignment of future property at law. The decree appealed against proceeds upon the ground, not indeed that an assignment of future property, with- out possession taken of it, would be void in equity (as the cases to which I have referred show that it would be at law), but that the equitable right is incomplete and imperfect unless there is subsequent possession, or some act equivalent to it to perfect the title. In considering the case it will be unnecessary to examine the au- thorities cited in argument, to show that if there is an agreement to transfer or to charge future acquired property, the property passes, or becomes liable to the charge in equity, where the question has arisen between the parties to the agreement themselves. In order to determine whether the equity which is created under agreements of this kind is a personal equity to be enforced by suit, or to be made available by some act to be done between the parties, or is in the nature of a trust attaching upon and binding the property at the instant of its coming into existence, we must look to cases where the rights of the third persons intervene. The respondents, in support of the decree, relied strongly on what was laid down by Baron Parke in Mogg v. Baker, 3 Mees. & \V. 195, 198, as the mle in equity which he stated In- had derived from a very high authority, "that if th< ■ ment was to mortgage certain specific furniture, <>f which the corpus was ascertained, that would constitute an equitable title in the defendant, so as to prevent it passing to the as- signees of tin in olvent, and llien the assignment would make that equitable title a legal one; but if it was only an agreemenl to mort- e furniture to In- subsequently acquired, or" (the word "or" is omitted in the report) "to k 1v c a bill of ale at a future day of the oS FORMATION OP THE CONTRACT furniture and other goods of the insolvent, then it would cover no Specific furniture, and would confer no right in equity." The mean- ing of these latter words must he that there would he no complete equitable transfer of the property, because there can he no douht that the agreement stated would create a right in equity upon which the party entitled might file a hill for specific performance. This point is so clear that it is almost unnecessary to refer to the observations of Lord Eldon in the case of The Warre, 8 Price, 269, n. in support of it. It must also be observed, that the proposition in Mogg v. Baker hardly reaches the present question, because it is not stated as a case of an actual transfer of future property, but as an agreement to mortgage, or to give a bill of sale at a future day. The only equity which could belong to a party under such an agreement would be to have a mortgage or a bill of sale of the future property executed to him. It does not meet a case like the present, where it is expressly provided that all additional or substituted machinery shall be subject to the same trusts as are declared of the existing machinery. Under a covenant of this description to hold that that trust attaches upon the new machinery as soon as it is placed in the mill, is to give an effect to the deed in perfect conformity with the intention of the parties, and as, by the terms of the deed, Taylor was to remain in possession, the act of placing the machinery in the mill would appear to be an act binding his conscience to the agreed trust on behalf of the appellants, and nothing more would appear to be requisite, unless by the established doctrine of a court of equity some further act was indispensable to complete their equitable title. The judgment of Lord Campbell, resting, as he states, upon Lord Bacon's maxim, determines that some subsequent act is necessary to enable "the equitable interest to prevail against a legal interest made subsequently bona fide acquired." It is agreed that this maxim re- lates only to the acquisition of a legal title to future property. It can be extended to equitable rights and interests (if at all) merely by analogy ; but in thus proposing to enlarge the sphere of the rule, it appears to me that sufficient attention has not been paid to the differ- ent effect and operation of agreements relating to future property at law and in equity. At law, property, non-existing, but to be acquired at a future time, is not assignable; in equity it is so. At law (as we have seen), although a power is given in the deed of assignment to take possession of after-acquired property, no interest is transferred, even as between the parties themselves, unless possession is actually taken ; in equity it is not disputed that the moment the property comes into existence the agreement operates upon it. * * * But if it should still be thought that the deed, together with the act of bringing the machinery on the premises, was not sufficient to com- plete the mortgagee's title, it may be asked what more could have been done for this purpose? The trustee could not take possession of the new machinery, for that would have been contrary to the provisions SUBJECT-MATTER OF SALE 39 of the deed under which Taylor was to remain in possession until de- fault in payment of the mortgage money after a demand in writing, or until interest should have become in arrear for three months; and in either of these events a power of sale of the machinery might be exercised. And if the intervenient act to perfect the title in trust be one proceeding from the mortgagor, what stronger one could be done by him than the fixing and placing the new machinery in the mill, by which it became, to his knowledge, immediately subject to the opera- tion of the deed? I asked Mr, Amphlett, upon the second argument, what novus actus he contended to be necessary, and he replied "a new deed." But this would be inconsistent with the terms of the original deed, which em- braces the substituted machinery, and which certainly was operative upon the future property as between the parties themselves. And it seems to be neither a convenient nor a reasonable view of the rights acquired under the deed to hold that for any separate article brought upon the mill a new deed was necessary, not to transfer it to the mortgagee, but to protect it against the legal claims of third persons. But if something W as still requisite to be done, and that by the mort- gagor, I cannot help thinking that the account delivered by Taylor to the mortgagees of the old machinery sold, and of the new machinery which was added and substituted, was a sufficient novus actus inter- veniens, amounting to a declaration that Taylor held the new machin- ery upon the trusts of the deed. Lord WenslEydale. Mv noble and learned friend will forgive me, but that was not mentioned in the bill. Lord CHELMSFORD. My noble and learned friend is quite correct in that; it must be taken that that was not mentioned in the bill, and that was the answer given when I urged, in the course of the argu- ment, that that account must be taken to be a sufficient actus. But still I am stating what my views are of the whole case. I think that the account delivered by Taylor to the mortgagees of the whole ma- chinery which was added and substituted, was a sufficient novus actus interveniens, amounting to a declaration that Taylor held the new machinery upon the trusts of the deed, the only act which could be done by him in conformity with it; and it is difficult to understand for what other rea on such an an-. unit should haw been rendered. As between then: [uite clear that a new deed of the added and sir d machinery was unnecessary. No possession could be delivered of it, because h would have been inconsistent with the incut of the parties; and anything, therefore, beyond this r tion of the morl 's right, appears to be excluded by the nature of the tran a< tion. 1 will add a very few ■ on thi • I of the notice of the claim of the morl i the judgmenl creditor. I think thai the equitable title would prevail even if the judgmenl i ! tor had no notice of it, •rding to the authorities which have heen alrcad\ observed upon. 40 FORMATION OF THE CONTRACT It is true that Lord Cottenham, in the case of Metcalfe v. Archbishop of York, 1 Mylne & C. 547, 555, said that if the plaintiff, in that case, was entitled to the charge upon the vicarage under the covenant and charge in the deed of 1811, "then, at the defendants had notice of that deed before they obtained their judgment, such charge must be preferred to that judgment." This appears to imply that his opinion was that if the judgment creditor had not had notice, he would have been entitled to priority. Much stress, however, ought not to be laid upon an incidental observation of this kind, where notice had actually been given, and where, therefore, the case was deprived of any such argument in favour of the judgment creditor. If Lord Cottenham really meant to say that notice, by the judgment creditor of the prior equitable title was necessary in order to render it available against him, his opinion is opposed to the decisions which have established that a judgment creditor, with or without notice, must take the property, subject to every liability under which the debtor held it. The present case, however, meets any possible difficulty upon the subject of notice, because it appears that the deed was registered as a bill of sale, under the provisions of the 17 & 18 Vict. c. 36. It was argued that this act was intended to apply to bills of sale of actual existing property only, and it probably may be the case that sales of future property were not within the contemplation of the legislature, but there is no ground for excluding them from the provisions of the act ; and upon the question of notice, the register would furnish the same information of the dealing with future as with existing property, which is all that is required to answer the objection. I think that the late lord chancellor was right in holding that, if actual possession of the machinery in question before the sheriff's officer entered was necessary, there was no proof of such possession having been taken on behalf of the mortgagee. But upon a careful consideration of the whole case, I am compelled to differ with him upon the ground on which he ultimately reversed Vice Chancellor Stuart's decree. I think, therefore, that his decree should be reversed, and that of the vice chancellor affirmed. * * * Reversed. FORMATION OF CONTRACT — STATUTE OF FRAUDS 41 FORMATION OF CONTRACT— UNDER THE STATUTE OF FRAUDS I. What Contracts are Within the Statute l 1. Contracts for Work, Labor, and Materials LEE v. GRIFFIN. (Court of Queens Bench, 1S61. 1 Best & S. 272.) Declaration against the defendant, as the executor of one Frances P., for goods bargained and sold, goods sold and delivered, and for work and labour done and materials provided by the plaintiff as a surgeon-dentist for the said Frances P. Plea. That the said Frances P. never was indebted as alleged. The action was brought to recover the sum of £21. for two sets of artificial teeth ordered by the deceased. At the trial, before Crompton, J., at the Sittings for Middlesex after Michaelmas Term, 1860, it was proved by the plaintiff that he had, in pursuance of an order from the deceased, prepared a model of her mouth and made two sets of artificial teeth ; as soon as they were ready he wrote a letter to the deceased, requesting her to appoint a day when he could see her for the purpose of fitting them. To this communication the deceased replied as follows: "My Dear Sir : I regret, after your kind effort to oblige me, my health will prevent my taking advantage of the early day. I fear I may not be able for some days. Yours, &c. Frances P." Shortly after writing the above letter, Frances P. died. On these facts the defendant's counsel contended that the plaintiff ought to be nonsuited, on the ground that there was no evidence of a dcli\ and acceptance of the goods by the deceased, nor any memorandum in writing of a contract within the meaning of the 17th section of the Statute of frauds, 29 Car. 2, c. 3, and the learned judge was of that opinion. The plaintiff's counsel then contended that, on the au- thority of Clay v. Yates, 1 H. & N. 73, the plaintiff could recover in the action on the count for work and labour done and materials provided. The learned judge declined to nonsuit, and directed a verdict for the amount claimed to 1"- entered for the plaintiff, with leave to the defendant to move to enter a nonsuit or verdict. Crompton, J. 1 think that this rule ought to be made absolute. On the second point I am of the same opinion as 1 was at the trial. i For d on of prindp Tiffany, Bales (2d Ed.) §§ 1S-20. 42 FORMATION OF CONTRACT — STATUTE OF FRAUDS There is not any sufficient memorandum in writing of a contract to satisfy the Statute of Frauds. The case decided in the House of Lords, to which reference lias been made during » the argument, is clearly distinguishable. That case only decided that if a document, which is silent as to the particulars of a contract, refers to another document which contains such particulars, parol evidence is admissible for the purpose of showing what document is referred to. Assuming in this case, that the two documents were sufficiently connected, still there would not be any sufficient evidence of the contract. The con- tract in question was to deliver some particular teeth to be made in a particular way, but these letters do not refer to any particular bar- gain, nor in any manner disclose its terms. The main question which arose at the trial was, whether the contract in the second count could be treated as one for work and labour, or whether it was a contract for goods sold and delivered. The distinc- tion between these two causes of action is sometimes very fine; but, where the contract is for a chattel to be made and delivered, it clearly is a contract for the sale of goods. There are some cases in which the supply of the materials is ancillary to the contract, as in the case of a printer supplying the paper on which a book is printed. In such a case an action might perhaps be brought for work and labour done, and materials provided, as it could hardly be said that the sub- ject-matter of the contract was the sale of a chattel: perhaps it is more in the nature of a contract merely to exercise skill and labour. Clay v. Yates, 1 H. & N. 73, turned on its own peculiar circumstances. I entertain some doubt as to the correctness of that decision; but I certainly do not agree to the proposition that the value of the skill and labour, as compared to that of the material supplied, is a criterion by which to decide whether the contract be for work and labour or for the sale of a chattel. Here, however, the subject-matter of. the con- tract was the supply of goods. The case bears a strong resemblance to that of a tailor supplying a coat, the measurement of the mouth and fitting of the teeth being analogous to the measurement and fitting of the garment. Hnjv, J. I am of the same opinion. I think that the decision in Clay v. Yates, 1 H. & N. 73, is perfectly right. That was not a case in which a party ordered a chattel of another which was afterwards to be made and delivered, but a case in which the subject-matter of the contract was the exercise of skill and labour. Wherever a con- tract is entered into for the manufacture of a chattel, there the subject- matter of the contract is the sale and delivery of the chattel, and the party supplying it cannot recover for work and labour. Atkinson v. Bell, 8 B. & C. 277 (E. C. L. R. vol. 15), is, in my opinion, good law, with the exception of the dictum of Bayley, J., which is repudiated by Maule, J., in Grafton v. Armitage, 2 C. B. 339 (E. C. L. R. vol. 52), where he says: "In order to sustain a count for work and labour, it is not necessary that the work and labour should be performed upon WHAT CONTRACTS ARE WITHIN THE STATUTE i ;> > materials that are the property of the plaintiff." And Tindal, C. J., in his judgment in the same case, p. 340, points out that in the applica- tion of the observations of Bayley, J., regard must be had to the particular facts of the case. In every other respect, therefore, the case of Atkinson v. Bell is law. I think that these authorities are a complete answer to the point taken at the trial on behalf of the plaintiff. When, however, the facts of this case are looked at, I cannot see how, wholly irrespective of the question arising under the Statute of Frauds, this action can be maintained. The contract entered into by the plaintiff with the deceased was to supply two sets of teeth, which were to be made for her and fitted to her mouth, and then to be paid for. Through no default on her part, she having died, they never were fitted; no action can therefore be brought by the plaintiff. Blackburn, J. On the second point, I am of opinion that the let- ter is not a sufficient memorandum in writing to take the case out of the Statute of Frauds. On the other point, the question is whether the contract was one for the sale of goods or for work and labour. I think that in all cases, in order to ascertain whether the action ought to be brought for goods sold and delivered, or for work and labour done and materials provided, we must look at the particular contract entered into between the parties. If the contract be such that, when carried out, it would result in the sale of a chattel, the party cannot sue for work and labour; but, if the result of the contract is that the party has done work and labour which ends in nothing that can become the subject of a sale, the party cannot sue for goods sold and delivered. The case of an attorney employed to prepare a deed is an illustration of this latter proposition. It cannot be said that the paper and ink he uses in the preparation of the deed are goods sold and delivered. The case of a printer printing a book would most probably fall wi the same category. In Atkinson v. Bell, 8 B. & C. 277 (E. C. L. R. vol. 15), the contract, if carried out, would have resulted in the of a chattel. In Grafton v. Armitage, 2 C. B. 340 (E. C. L. R. vol. !. C. J., lays down this very principle. He draws a distinc- between the cases of Atkinson v. Bell and that before him. The m he gives is that, in the former case, "the substance of the contract v. ids to be sold and delivered by the one party to the other:" in the latter "there never was any intention to make any- thing thai COUld properly become the subjeel of an action foi sold and delivered." I think il tion reconciles those twi and th m of Clay v. \ I H. & N. 73, is not inconsistent with them. In the pri the contract was to deliver a thing which, when completed, would have resulted in the sale of a chattel; i n oth.T words, the Of th" contract was for g lOds -old and delivered. I do not think th l the te I to apply to these i whether the value of the work Is thai of the materials u in it ution; for, if a sculptor were employed ti ute a work 44 FORMATION OF CONTRACT STATUTE OF FRAUDS of art, greatly as his skill and labour, supposing it to be of the highest description, might exceed the value of the marble on which he worked, the contract would, in my opinion, nevertheless be a contract for the sale of a chattel. Rule absolute. BAGBY v. WALKER. (Court of Appeals of Maryland, 1893. 78 Md. 239, 27 Atl. 1033.) Two actions — one by Arthur M. Walker and James R. Myers, trad- ing as Walker & Myers, against Charles T. Bagby and Arthur D. Riv- ers, trading as Bagby & Rivers ; the other by Bagby & Rivers against Walker & Myers. Judgment for Walker & Myers. Bagby & Rivers appeal. McSherry, J. The only questions involved in the two cases now before us arise on the single exception reserved to the rulings of the superior court of Baltimore on several prayers for instructions to the jury. There were two actions between the same parties, tried at the same time in the court below. In one, Walker & Myers, the appellees . here, were plaintiffs, and the appellants were defendants ; in the other, Bagby & Rivers, the appellants here, were plaintiffs, and the appellees were defendants. In the first, Walker & Myers sued to recover the balance due upon the contract price of certain lumber sold and deliv- ered by them to Bagby & Rivers, and also to recover the difference be- tween the contract price and the market price of certain other lumber subsequently ordered, but which Bagby & Rivers refused to accept. A judgment was entered in favor of the plaintiffs. In the second case, Bagby & Rivers sued to recover damages for a failure on the part of Walker & Myers to deliver the kind and quality of lumber stipulated for, and also for a failure to deliver within the time designated in the agreement a large part of the lumber sold by them to Bagby & Rivers.' A judgment of non pros, was entered in the case. The contract is embodied in a letter from Bagby & Rivers to Walker & Myers under date of January 29, 1891, and a written acceptance of the terms by Walker & Myers on the same date. The time limited for filling the order was three months. The first delivery under this writ- ten contract, about the execution of which there is no dispute, was made in the following March, and the last on November 27th of the same year, long after the expiration of the three-months limit. The price of the lumber actually delivered amounted to $1,635.38, and the payments made thereon, beginning in April and ending in August, aggregated $1,137.98, leaving an unpaid balance of $497.70. There was evidence in the case tending to prove that Bagby & Rivers had waived the requirement of time mentioned in the letter of January 29, 1891, as to the delivery of the lumber. Walker & Myers offered other e pleaded. In such a case the defendant is put upon full notice of the demand of the plaintiff, the of the demand, and the form in which it exists. But where the declaration or petition is founded upon a "common count" (and, in Using the term "o.nmion count," common-law pleading is referred to), such as assumpsit for goods sold and delivered, the nature of the claim is not exhibited, and the defendant can avail himself of the statute ~S FORMATION OF CONTRACT — STATUTE OF FRAUDS without formal pleading; for in that case it is not to he presumed that the defendant has notice of the character of the debt, which is not disclosed by the declaration. The common count referred to bears no resemblance to the statutory form of an action on an open account under the laws of this state. In the case under consideration the defendants were put upon no- tice that plaintiff claimed that defendants' intestate was due it a cer- tain sum of money, exceeding $50, for two articles of merchandise bought by the intestate at a particular date, and that the form of indebt- edness was an open account ; that is, unliquidated. To avail himself of the privilege of the statute in such a suit, the defendant must plead it, or he will be held to have waived it, because the defendant has the personal privilege to plead it or waive it, and if he does not do one he does the other. He did not plead the statute in this case, and inas- much as the defense was not made on the trial, or necessarily passed on in a legal way by the trial judge, the question as to whether the contract was void, as being within the statute of frauds, could not properly have been considered by this court. Motion for rehearing denied. All the justices concurring. EFFECT IN PASSING PROPERTY — SPECIFIC GOODS Ti) EFFECT OF THE CONTRACT IN PASSING THE PROP- ERTY—SALE OF SPECIFIC GOODS I. In General 1 LINGHAM v. EGGLESTON. (Supreme Court of Michigan, 1S73. 27 Mich. 324.) Cooley, J. The contest in this case relates to a sale of lumber by Eggleston to Lingham & Osborne, and the question involved is, whether the contract between the parties amounted to a sale in prsesenti and passed the title, or merely to an executory contract of sale. The lumber, subsequent to the contract and before actual delivery to the purchasers, was accidentally destroyed by fire, and the purchasers now refuse to pay for it, on the ground that it never became their property. The action was brought by Eggleston for goods bargained and sold, and in the court below he recovered judgment. There appears to be very little dispute about the facts. The lumber was piled in Eggleston's mill yard at Birch Run. In September, 1871, he sold his mill to a Mr. Thayer, reserving the right to leave the lum- ber in the yard until he disposed of it. To most of the lumber the plaintiff had an exclusive title; but there were four or five piles which he owned jointly with one Robinson. The whole amount was from 200.000 to 250,000 excluding Robinson's share in the four or five piles. The defendants went to the mill yard September 23, 1871, and pro- posed to buy the lumber. Plaintiff went through the yard with them, pointed out the several piles, and designated those in which Robinson had an undivided interest, and also some piles of shingles which they ed to take with the lumber. After examining the whole to their satisfaction, the defendant agreed upon a purchase, and the following written contract was entered into: "Flint. September 23, 1871. "Lingham & Osborne bought from C. Eggl< ston this day. all the pine lumber on his yard at Birch Run at the following prices: For all common, eleven dollars, and to ini lude all better at the same price ; and for all culls, five dollars and fifty cents per ML, to be paid for as follows: Five hundred dollars to day, and five hundred dollars on the of l ' tober next; the balance, one half on lsl day of January, A. D. 1872, and the r< the firsl day of February following; : lumber to be delivered by said Eggle ton on board of cars when requested by said Lingham & Osborne, which shall not he later than i For Hi en Ion of principl< . ee Tiffany, Bales (2d Ed.) | 12. SO EFFECT IN PASSING PROPERTY — SPECIFIC GOODS 10th of November next. Also some shingles at two dollars per M. for No. 2 and four dollars for No. 1. "[Signed] Lingham & Osborne. "Chauncey Eggleston, Jr." The five hundred dollars mentioned in this contract to be paid at the time of its execution was paid. A few days later defendants went to the mill yard in plaintiff's absence and loaded two cars with the lumber. He returned before they had taken them away, and helped them count the pieces on the cars, but left them to measure them afterwards. At this time the lumber in the piles had not been as- sorted, inspected or measured. There was disagreement between the parties as to whether they had fixed upon a person to inspect the lum- ber; the defendants claiming that such was the fact. On the ninth day of October, 1871, Lingham met plaintiff on the cars at Flint, and told him the fires were raging near Birch Run ; that the lumber yard was safe yet, but that there were eight cars standing on the side track, and he had better go up to Birch Run and load what were there, and get what lumber he could away; plaintiff took the first train for the purpose, and while on the train the train boy gave him the following note from Lingham : "Holly. Mr. Eggleston : You may load, say ten thousand, if you think best, on each car, and we can have it inspected as it is unloaded. I will try and come up to-morrow." When plaintiff reached Birch Run the fire was raging all about the mill, and that, with all the lumber in the yard, was soon totally de- stroyed by fire. Such are the undisputed facts in the case ; and upon these the jury were instructed in substance that a completed contract of sale was made out, and the plaintiff was entitled to recover the pur- chase price. Where no question arises under the statute of frauds, and the rights of creditors do not intervene, the question whether a sale is completed or only executory, must usually be determined upon the intent of the parties to be ascertained from their contract, the situation of the thing sold, and the circumstances surrounding the sale. The parties may 'settle this by the express words of their contract, but if they fail to do so, we must determine from their acts whether the sale is complete. If the goods sold are sufficiently designated so that no question can arise as to the thing intended, it is not absolutely essential that there should be a delivery, or that the goods should be in deliverable condition, or that the quantity or quality, when the price depends upon either or both, should be determined. All these circumstances have an im- portant bearing when we are seeking to arrive at the intention of the parties, but no one of them, nor all combined are conclusive. In Blackburn on Sales, 120, the rule on this subject is very clearly and correctly stated as follows : The question, the author says, is "a question depending upon the construction of the agreement; for the law professes to carry into effect the intention of the parties as ap- IN GENERAL 81 pearing from the agreement, and to transfer the property when such is the intention of the agreement; not before. In this, as in other cases, the parties are apt to express their intentions obscurely ; very often because the circumstances rendering the point of importance are not present to their minds, so that they really had no intention to express. The consequence is, that without absolutely losing sight of the fundamental point to be ascertained, the courts have adopted cer- tain rules of construction which, in their nature, are more or less tech- nical. Some of them seem very well fitted to aid the court in discov- ering the intention of the parties ; the substantial sense of others may be questioned. The parties do not contemplate a bargain and sale till the specific goods on which their contract is to attach are agreed upon. Where the goods are ascertained, the parties are taken to con- template an immediate bargain and sale of the goods, unless there be something to indicate an intention to postpone the transference of thr property till the fulfillment of any conditions; and when by the agree ment the seller is to do any thing to the goods for the purpose of put- ting them into a deliverable shape, or when any thing is to be done to them to ascertain the price, it is presumed that the parties mean to make the performance of those things a condition precedent to the transfer of the property. But as these are only rules for the con- struction of the agreement, they must yield to any thing in the agree- ment which clearly shows a contrary intention. The parties may law- fully agree to an immediate transference of the property in the goods, although the seller is to do many things to them before they are to be delivered; and, on the other hand, they may agree to postpone the vesting of the property till after the fulfillment of any conditions they please." In Benjamin on Sales, 214, 215, the same doctrine is laid down, and it is said that "nothing prevents the parties from agreeing that the property in a specific thing sold and ready for delivery is not to pass till certain conditions are accomplished, or that the property shall pass in a thing which remains in the vendor's possession, and is not ly for delivery, as an unfinished ship, or which has not yet been -died or measured, as a cargo of corn in hulk, sold at a certain price per pound or per bushel." And see Id. 221 et seq. pon this general principle there is no difficulty in reconciling most of the reported . ' And even without express words to that Ct, a contract has often been held to be a completed sale, where many circumstances ware wantin I many thi i be done by one or both the parties to fix conclusively the sum to be paid or to rmine some othi material to their re pective rights. The most important fact indicative of an intent that title shall pass is generally that of delivery. If the goods 1"' completely delivered to the pur -, it is usually very strong if not conclusive evidence of intent that the property hall ve i in him and he at his risk, notwith- Oooi i i ' a; ^2 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS standing weighing, measuring, inspection, or some other act is to be done afterwards. A striking case in illustration is that of Young v. Mathews, Law R. 2 Exch. 127, where a large quantity of bricks was purchased in kilns. Only a part of them were burned, and none of them were counted out from the rest; but they were paid for, and such delivery as in the nature of the case was practicable was made. The court held that the question was one of intention merely, and that it was evident the parties intended the title to pass. To the same effect are Woods v. Russell, 5 B. & Aid. 942; Riddle v. Varnum, 20 Pick. (Mass.) 280; Bates v. Conkling, 10 Wend. (N. Y.) 389; Oly- phant v. Baker, 5 Denio (N. Y.) 379 ; Bogy v. Rhodes, 4 G. Greene (Iowa) 133; Crofoot v. Bennett, 2 N. Y. 258; Cunningham v. Ash- brook, 20 Mo. 553. So, if the goods are specified, and all that was to be done by the vendor in respect thereto has been done, the title may pass, though the quantity and quality, and consequently the price to be paid, are still to be determined by the vendee. Turley v. Bates, 2 H. & C. 200 ; Kohl v. Lindley, 39 111. 195, 89 Am. Dec. 294. And even if something is to be done by the vendor, but only when directed by the vendee and for his convenience, as, for instance, to load the goods upon a vessel for transportation, the property may pass by the contract of sale notwithstanding. Whitcomb v. Whitney, 24 Mich. 486; Terry v. Wheeler, 25 N. Y. 520. But the authorities are too numerous and too uniform to justify ci- tation, which hold that where anything is to be done by the vendor, or by the mutual concurrence of both parties, for the purpose of as- certaining the price of the goods, as by weighing, testing or measur- ing them, where the price is to depend upon the quantity or quality of the goods, the performance of those things is to be deemed pre- sumptively a condition precedent to the transfer of the property, al- though the individual goods be ascertained, and they are in the state in which they may and ought to be accepted. A learned author from whom we have already quoted, says of this, that "the rule seems to be somewhat hastily adopted from the civil law, without adverting to the great distinction made by the civilians between a sale for a certain price in money, and an exchange for any thing else. The English law makes no such distinction, but, as it seems, has adopted the rule of the civil law, which seems to have no foundation except in the distinction. In general the weighing, etc., must, in the nature of things, be intended to be done before the buyer takes possession of the goods; but that is quite a different thing from intending it to be done before the vesting of the property ; and as it must in general be intended that both the parties shall concur in the act of weighing, when the price is to depend upon the weight, there seems little reason why, in cases in which the specific goods are agreed upon, it should be supposed to be the intention of the parties to render the delay of that act, in which the buyer is to concur, beneficial to IN GENERAL 83 him. Whilst the price remains unascertained, the sale is clearly not for a certain sum of money, and therefore does not come within the civilian's definition of a perfect sale, transferring the risk and gain of the thing sold ; but the English law does not require that the con- sideration for a bargain and sale should be in moneys numbered, pro- vided they be of value." But the same writer, with candor and jus- tice, adds, that this rule is now "firmly established as English law." Blackburn on Sales, 153. And see Turley v. Bates, 2 H. & C. 200, in which this passage is quoted and the conclusion treated as unques- tionable. What then are the facts in this case from which the intent of the parties is to be inferred? The lumber was specifically designated, so that no question of identity could arise. It was not delivered, and the vendor was to place it on board the cars, if desired to do so within a time specified ; but as in any event the vendees were to take it at Birch Run. and it was optional with them to load it on the cars them- selves or to have the vendor do it for them, and they had no right to require that he should do so after the day named, we think the cir- cumstance that actual delivery was not made is not one of very much importance in the present discussion. What is of more importance is. that neither the quality nor the quantity was determined ; and the evi- dence in the case shows that as to these there might very well be, and actually were great differences of opinion. The price to be paid was consequently not ascertained, and could not be until the qualities were separated and measurement had. It will be observed that the contract did not provide how or by whom the inspection and measurement should be made. It was cer- tainly not the right of either party to bind the other party by an in- spection and measurement of his own ; it was the right of both to participate, and we must suppose such was the intent unless some- thing clearly appears in the case to show the contrary. Nothing of that nature appears in the record except the disputed evidence of de- fendants, that a person was agreed upon for the purpose. The note ■ by Lingham to Eggleston proposing that the eight cars be loaded and that the vendees make the proper inspection, was a mere proposi- . and never acted upon. It is very evidenl Eggleston was under no ol to trusl tin's important transaction exclusively to the ven-' d we have no righl to infer thai If would have <1< It follows thai something of high importance remained to lie dot by ili'- vendor to tain the price to be paid; and as this, un all tli" authorities, was presumptively a condition precedenl to the tran of Lhe title — nothin ■ to the contrary appearing — the court ructed the jury. The instructions given were in to the contrary. It follows that the judgment must be reversed, with costs, and a new trial ordered. yJ: EFFECT IN PASSING PROPERTY — SPECIFIC GOODS BERGAN v. MAGNUS et al. (Supreme Court of Georgia, 1S9G. 98 Ga. 514, 25 S. E. 570.) Attachment by M. T. Bergan against one Allen, in which a claim to the property seized was interposed by J. A. Magnus & Co. From a judgment for claimants, plaintiff brings error. Lumpkin, J. An attachment in favor of Bergan against Allen was levied upon a barrel of whisky, a claim to which was interposed by Magnus & Co. The plaintiff's theory was that the whisky had been sold by the claimants to Allen, and that the title had passed into the latter before the attachment was levied. On the other hand, the con- tention of the claimants was that, under the terms of the contract be- tween themselves and Allen, the sale had never become complete, and that he had never acquired title. There was some question as to whether or not Allen had ever obtained possession of the whisky, the claimants insisting that they had exercised their right of stoppage in transitu, and the plaintiff denying that this was true. In the view we take of the case, however, this question is immaterial ; for, even upon the assumption that Allen actually obtained possession, we are of the opinion that the judge, who tried the case without a jury, rightly found for the claimants. The evidence fully and amply warranted him in reaching the conclusion that the sale from Magnus & Co. to Allen was for cash, which the latter was to pay upon delivery of the whisky, and that prepayment of the price was a condition precedent to the sale. There was no pretense that Allen had paid the price. This being so, even if Allen had in fact obtained possession, the title did not pass to him under the contract, for the reason that he failed to comply with the condition upon which the sale depended. "If the sale be for money to be immediately paid, or to be paid upon delivery, payment of the price is a precedent condition of the sale, which suspends the com- pletion of the contract until the condition is performed, and prevents the right of property from passing to the vendee, unless the vendor chooses to trust to the personal credit of the vendee." The foregoing is an extract from the opinion of Washington, J., delivered in the case of Copland v. Bosquet, 4 Wash. C. C. 588, Fed. Cas. No. 3,212, cited in 1 Benj. Sales, § 336. To the same effect, see Tied. Sales, § 206. In Dows v. Dennistoun, 28 Barb. (N. Y.) 393, it appeared that certain flour had been sold for cash on delivery; that is, the cash was to be paid within 10 days. Upon these facts, Davies, P. J., remarked : "The very terms and import of this arrangement are that there was to be a qualified delivery, which was to precede the payment; and it is ap- parent from the facts in this case that the possession of the goods was intrusted to the vendee for the purpose of enabling him to realize upon them, and thus provide means for the payment of the price. Such an understanding, arrangement, or custom cannot, we think, be RULES FOB ASCERTAINING INTENTION So construed into an absolute transfer of the title to the property, as be- tween the original parties to it or those who have no greater equities than the original parties." The same doctrine was recognized in Harding v. Metz, 1 Tenn. Ch. 610, in which it was held that "if personal chattels be sold upon the express condition that they are to be paid for on delivery, and they are delivered upon the faith that the condition will be immediately per- formed, and performance is refused upon demand in a reasonable time, no title passes to the buyer." And see Armour v. Pecker, 123 Mass. 143; Salomon v. Hathaway, 126 Mass. 482; Mathewson v. Mills Co., 76 Ga. 357. Judgment affirmed. II. Rules for Ascertaining Intention 2 LINGHAM v. EGGLESTON. (Supreme Court of Michigan, 1ST3. 27 Mich. 324.) See ante, p. 79, for a report of the case. RESTAD v. ENGEMOEN. (Supreme Court of Minnesota, 1S9G. 65 Minn. 14S, 67 N. W. 1146.) Action by Peter Restad against Half dan Engemoen. From a judg- ment for plaintiff, defendant appeals. Canty, J. This action was brought to recover $38.41, the price of a cow and a steer which plaintiff alleges he sold to defendant. Plaintiff had a verdict, and from the judgment entered thereon de- fendant appeals. Plaintiff testified that about March 1, 1892, defendant came to his n, looked at the cow and the steer, and agreed to give him 2 cents per pound for the cow and 2.35 cents per pound for the steer, paid him on the cow and SI on the steer, and asked him t<» keep them, and corn and potatoes, until April 26th following, and then to deliver them to defendant at Pelican Rapids, a town some distance from the farm; thai plaintiff did so keep, feed, and deliver them, hut that defendant refu ed to i them. Thereupon plaintiff weighed them, and thereb rtained the amount of the purchase price. De fendanl testified that he told plaintiff that he would take the cattle at the price specified if plaintiff would "\m\ them up to beef." Said the witn< "I told him I could not handle COWS at all unless the, were fed up to beef. * * * They were very poor. I could no! 2 For -I "n of princi] 'i Iffany, Sales (2d Ed.) S 18. 86 EFFECT IN PASSING PEOPEETY — SPECIFIC GOODS take them because they were not fed up to beef." Plaintiff testified that defendant merely told him to feed "them a little potatoes and corn, but don't give them too much any of the time," and denies that he agreed to fatten them. We are of the opinion that the evidence does not sustain the ver- dict and judgment. In Martin v. Hurlbut, 9 Minn. 142 (Gil. 132), the following extract is quoted with approval from Joyce v. Adams, 8 X. Y. 291 : "It is a general rule of law that, where a contract is made for the purchase of goods, and nothing is said about payment or delivery, the property passes immediately, so as to cast upon the purchaser all future risk, if nothing further remains to be done to the goods, although he cannot take them away without paying the price. But, if anything remains to be done on the part of the seller, as between him and the buyer, such as weighing, measuring, or count- ing out of a common parcel, before the goods purchased are to be de- livered, until that is done the right of property has not attached in the buyer." See, also, Rail v. Lumber Co., 47 Minn. 422, 50 N. W. 471. In Benj. Sales (book 2) c. 3, one of Lord Blackburn's rules is stated as follows : "First. Where, by the agreement, the vendor is to do anything to the goods for the purpose of putting them into that state in which the purchaser is to be bound to accept them, or, as it is sometimes worded, 'into a deliverable state,' the performance of those things shall, in the absence of circumstances indicating a con- trary intention, be taken to be a condition precedent to the vesting" of the property." In the present case there were altogether too many things to be done by the vendor to the chattels before delivery, and too few cir- cumstances indicating an intention to vest title immediately, so that a finding that such intention existed cannot be sustained. Plaintiff's remedy was an action for damages for a breach of the executory con- tract. Judgment reversed, and a new trial granted. III. Reservation of Right of Possession or Property 8 1. Conditional Sales HARKNESS v. RUSSELL & CO. (Supreme Court of United States. 1886. 118 U. S. 6G3, 7 Sup. Ct. 51, 30 L. Ed. 285.) Bradley, J. 4 This is an appeal from the supreme court of Utah. The action was brought in the district court for Weber county, to re- 3 For discussion of principles, see Tiffany, Sales (2d Ed.) § 44. * Part of the opinion is omitted. RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 8 * cover the value of two steam-engines and boilers, and a portable saw- mill connected with each engine. A jury being waived, the court found the facts, and rendered judgment for the plaintiff, Russell & Co. The plaintiff is an Ohio corporation, and by its agent in Idaho, on the second of October, 1882, agreed with a partnership firm by the name of Phelan & Ferguson, residents of Idaho, to sell to them the said engines, boilers, and saw-mills for the price of $4,98S, nearly all of which was secured by certain promissory notes, which severally contained the terms of the agreement between the parties. One of the notes (the others being in the same form) was as follows, to-wit : "Salt Lake City, October 2, 1882. "On or before the first day of May, 1883. for value received in one sixteen-horse portable engine, No. 1,026, and one portable saw-mill. No. 128, all complete, bought of L. B. Mattison, agent of Russell & Co., we, or either of us. promise to pay to the order of Russell & Co.. Massillon, Ohio, $300, payable at Wells, Fargo & Co.'s bank, Salt Lake City, Utah Territory, with ten per cent, interest per annum ii October 1. 1882, until paid, and reasonable attorney's fees, or any costs that may be paid or incurred in any action or proceeding instituted for the collection of this note or enforcement of this cove- nant. The express condition of this transaction is such that the title. ownership, or possession of said engine and saw-mill does not pass from the said Russell & Co. until this note and interest shall have been paid in full, and the said Russell & Co. or his agent has full power to declare this note due, and take possession of said engine and saw-mill when they may deem themselves insecure, even before the maturity of this note; and it is further agreed by the makers hereof that if said note is not paid at maturity, that the interest shall be two per cent, per month from maturity hereof till paid, both before and after judgment, if any should be rendered. In case said saw- mill and engine shall be taken back, Russell & Co. may sell the same at public or private sale without notice, or they may, without sale. indorse the true value <>\ the property on this note, and we agree to pay on the note any balance due thereon, after such indorsement, as dam- and rental for .aid machinery. As to this debt we waive the right npt, or claim a- e :empt, any property, real <>r personal, we now own, or may hereafter acquire, by virtue' of any homestead or exemp- tion law, state or federal, now in force, or that hereafter may he enacted. "P. ' >., Oxford, Oneida County, blaho Territory. "$3l I 'helan & Bergu on." Some of the notes were given for the price of one ol the engines with it- accompanying boiler and mill, and the others for the price o\ the other. Some of the notes were paid; and the present suit was brought on those thai were nol paid. The property was delivered to Phelan ft Ferguson on thi ution of the notes, ami subsequently 88 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS they sold it to the defendant Harkness, in part payment of a debt due from them to him and one Langsdorf. The defendant, at the time of the sale to him, knew that the purchase price of the property had not been paid to the plaintiff, and that the plaintiff claimed title thereto until such payment was made. The unpaid notes given for each eneine and mill exceeded in amount the value of such engine and mill when the action was commenced. The territory of Idaho has a law relating to chattel mortgages, re- quiring that every such mortgage shall set out certain particulars as to parties, time, amount, etc., with an affidavit attached that it is bona fide, and made without any design to defraud and delay creditors; and requiring the mortgage and affidavit to be recorded in the county where the mortgagor lives, and in that where the property is located ; and it is declared that no chattel mortgage shall >e valid (except as between the parties thereto) without compliance with these requisites, unless the mortgagee shall have actual possession of the property mortgaged. In the present case no affidavit was attached to the notes, nor were they recorded. The court found that it was the intention of Phelan & Ferguson and of Russell & Co. that the title to the said property should not pass from Russell & Co. until all the notes were paid. Upon these facts the court found, as conclusions of law, that the transaction between Phelan & Ferguson and Russell & Co. was a conditional or executory sale, and not an absolute sale with a lien reserved, and that the title did not pass to Phelan & Ferguson, or from them to the defendant, and gave judgment for the plaintiff. The supreme court of the ter- ritory affirmed this judgment. The first question to be considered is whether the transaction in question was a conditional sale or a mortgage; that is, whether it was a mere agreement to sell upon a condition to be performed, or an absolute sale, with a reservation of a lien or mortgage to secure the purchase money. If it was the latter, it is conceded that the lien or mortgage was void as against third persons, because not verified by affidavit, and not recorded as required by the law of Idaho. But, so far as words and the express intent of the parties can go, it is per- fectly evident that it was not an absolute sale, but only an agree- ment to sell upon condition that the purchasers should pay their notes at maturity. The language is : "The express condition of .this trans- action is such that the title * * * does not pass * * * until this note and interest shall have been paid in full." If the vendees should fail in this, or if the vendors should deem themselves insecure before the maturity of the notes, the latter were authorized to re- possess themselves of the machinery, and credit the then value of it, or the proceeds of it if they should sell it, upon the unpaid notes. If this did not pay the notes, the balance was still to be paid by the mak- ers by way of "damages and rental for said machinery." This stipula- RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 89 tion was strictly in accordance with the rule of damages in such cases. Upon an agreement to sell, if the purchaser fails to execute his contract, the true measure of damages for its breach is the differ- ence between the price of the goods agreed on and their value at the time of the breach or trial, which may fairly be stipulated to be the price they bring on a resale. It cannot be said, therefore, that the stipulations of the contract were inconsistent with or repugnant to what the parties declared their intention to be, namely, to make an executory and conditional contract of sale. Such contracts are well known in the law and often recognized; and, when free from any fraudulent intent, are not repugnant to any principle of justice or eq- uity, even though possession of the property be given to the proposed purchaser. The rule is formulated in the text-books and in many adjudged cases. In Lord Blackburn's Treatise on the Contract of Sale, published 40 years ago, two rules are laid down as established: (1) That where, by the agreement, the vendor is to do anything to the goods before delivery, it is a condition precedent to the vesting of the property; (2) that where anything remains to be done to the goods for ascer- taining the price, such as weighing, testing, etc., this is a condition precedent to the transfer of the property. Blackb. Sales, 152. And it is subsequently added that "the parties may indicate an intention, by their agreement, to make any condition precedent to the vesting of the property ; and, if they do so, their intention is fulfilled." Blackb. Sales, 167. Mr. Benjamin, in his Treatise on Sales of Personal Property, add- to the two formulated rules of Lord Blackburn a third rule, which is supported by many authorities, to-wit : (3) "Where the buyer is by the contract bound to do anything as a condition, either precedent or con- current, on which the passing of the property depends, the property will not pass until the condition be fulfilled, even though the goods may have been actually delivered into the possession of the buyer." j. Sales, (2d l*.d.) 236; Id. (3d Ed.) § 320. The author cites for proposition I v. Stillito, 2 Barn. & Aid. 329, note a; Brandt v. Bowlby, 2 Barn. & Adol. 932; Barrow v. Coles, (Lord Ellenbor- OUgh,) 3 Cam]). 92; Swain v. Shepherd, (Baron Parke,) 1 Moody & R. 223; Mires v. Solebay, 2 Mod. 243. In the last case, decided in the time of Charles II., one Alston took sheep to pasture for a certain time, with an agreement that if, at the end of that time, he should pay the owner a certain sum, he should have the sheep. Before the time expired the owner sold them to »n; and it was held that the -ale was valid, and that the ien1 to -'-11 il i p to Alston, if he would pay for them at a certain day, did not amount to a ale, hut only to an agreement. The other i e instances of sail of goods to be paid for in cadi or Becurities On delivery. It was held that the sale, were conditional DO EFFECT IN PASSING PROPERTY — SPECIFIC GOODS only, and that the vendors were entitled to retake the goods, even after delivery, if the condition was not performed; the delivery being considered as conditional. This often happens in cases of sales by auction, when certain terms of payment are prescribed, with a condi- tion that, if they are not complied with, the goods may be resold for account of the buyer, who is to account for any deficiency between the second sale and the first. Snch was the case of Lamond v. Duvall, 9 Q. B. 1030; and many more cases could be cited. * * * This presumption of property in a bankrupt arising from his pos- session and reputed ownership became so deeply imbedded in the Eng- lish law that in process of time many persons in the profession, not adverting to its origin in the statute of bankruptcy, were led to re- gard it as a doctrine of the common law ; and hence in some states in this country, where no snch statute exists, the principles of the statute have been followed, and conditional sales of the kind now under consideration have been condemned either as being fraudulent and void as against creditors, or as amounting, in effect, to absolute sales with a reserved lien or mortgage to secure the payment of the purchase money. This view is based on the notion that such sales are not allowed by law, and that the intent of the parties, however honestly formed, cannot legally be carried out. The insufficiency of this argument is demonstrated by the fact that conditional sales are admissible in several acknowledged cases, and therefore there cannot be any rule of law against them as such. They may sometimes be used as a cover for fraud ; and, when this is charged, all the circum- stances of the case, this included, will be opened for the consideration of a jury. Where no fraud is intended, but the honest purpose of the parties is that the vendee shall not have the ownership of the goods until he has paid for them, there is no general principle of law to prevent their purpose from having effect. In this country, in states where no such statute as the English act referred to is in force, many decisions have been rendered sustaining conditional sales accompanied by delivery of possession, both as be- tween the parties themselves and as to third persons. In Hussey v. Thornton, 4 Mass. 405, 3 Am. Dec. 224 (decided in 180S,) where goods were delivered on board of a vessel for the vendee upon an agreement for a sale, subject to the condition that the goods should remain the property of the vendors until they received securi- ty for payment, it was held (Chief Justice Parsons delivering the opinion) that the property did not pass, and that the goods could not be attached by the creditors of the vendee. This case was followed in 1822 by that of Marston v. Baldwin, 17 Mass. 606, which was replevin against a sheriff for taking goods which the plaintiff had agreed to sell to one Holt, the defendant in the attachment ; but by the agreement the property was not to vest in Holt until he should pay $100, (part of the price,) which condition was not performed, though the goods were delivered. Holt had paid RESERVATION OF EIGHT OF POSSESSION OR PROPERTY 91 $75, which the plaintiff did not tender back. The court held that it was sufficient for the plaintiff to be ready to repay the money when he should be requested, and a verdict for the plaintiff was sustained. In Barrett v. Pritchard, 2 Pick. (Mass.) 512, 13 Am. Dec. +49, the court said: "It is impossible to raise a doubt as to the intention of the parties ; for it is expressly stipulated that 'the wool, before man- ufactured, after being" manufactured, or in any stage of manufacture, shall be the property of the plaintiff until the price be paid.' It is difficult to imagine any good reason why this agreement should not bind the parties. * * * In Coggill v. Hartford & N. H. R. Co., 3 Gray (Mass.) 545, the rights of a bona fide purchaser from one in possession under a condi- tional sale of goods were specifically discussed, and the court held, in an able opinion delivered by Mr. Justice Bigelow, that a sale and de- livery of goods on condition that the title shall not vest in the vendee until payment of the price passes no title until the condition is per- formed, and the vendor, if guilty of no laches, may reclaim the prop- erty, even from one who has purchased from his vendee in good faith, and without notice. * * * This case was followed in Sargent v. Metcalf, 5 Gray, 306, 66 Am. Dec. 368; Deshon v. Bigelow, 8 Gray, 159; Whitney v. Eaton, 15 Gray. 22?; Hirschorn v. Canney, 98 Mass. 149; and Chase v. Ingalls, 122 Mass. 3S1 ; and is believed to express the settled law of .Massachusetts. The same doctrine prevails in Connecticut, and was sustained in an able and learned opinion of Chief Justice Williams, in the case of Forbes v. Marsh. 15 Conn. 384, (decided in 1843,) in which the principal authorities are reviewed. The decision in this case was followed in the subsequent case of Hart v. Carpenter, 24 Conn. 427, where the question arose upon the claim of a bona fide purchaser. In New York the law is the same, at least so far as relates to the vendee in a conditional sale and to his creditors; though there has been some diversity of opinion in its application to bona fide pur- chasers from such vendee. 1X22, in the case of Haggerty v. Palmer, 6 Johns. Ch. (N. Y.) 437, where an auctioneer had delivered to the purchaser goods ction, it being one of the conditions of sale that indorsed notes should be given in payment, which the purchaser failed to give, Chancellor Kent held that it was a conditional sale and delivery, and gave no title which the vendee could transfer to an assignee for the benefil of creditors; and he said thai the cases under the English bankrupt act did not apply here. The chancellor remarked, however, thai "if the goods had been fairly sold by P., [the conditional vendee,] or if the proceeds had hen actually appropriated by the assignees before notice Of this rait and of the injunction, the remedy would have been •: inc." * * * 92 EFFECT IN PASSING PKOFERTY — SPECIFIC GOODS In Herring- v. Hoppock, 15 N. Y. 409, the same doctrine was fol- lowed. In that case there was an agreement in writing for the sale of an iron safe, which was delivered to the vendee, and a note at six months given therefor; but it was expressly understood that no title was to pass until the note was paid; and if not paid, Herring, the vendor, was authorized to retake the safe, and collect all reasonable charges for its use. The sheriff levied on the safe as the property of the vendee, with notice of the plaintiff's claim. The court of ap- peals held that the title did not pass out of Herring. * * * In the cases of Smith v. Lynes, 5 N. Y. 41, and Wait v. Green, 35 Barb. 585, Id. 36 N. Y. 556, it was held that a bona fide purchaser, without notice from a vendee who is in possession under a conditional sale, will be protected as against the original vendor. These cases were reviewed, and, we think, substantially overruled, in the subse- quent case of Ballard v. Burgett, 40 N. Y. 314, in which separate elaborate opinions were delivered by Judges Grover and Lott. This decision was concurred in by Chief Judge Hunt, and Judges Wood- ruff, Mason, and Daniels; Judges James and Murray dissenting. In that case Ballard agreed to sell to one France a yoke of oxen for a price agreed on, but the contract had the condition "that the oxen were to remain the property of Ballard until they should be paid for." The oxen were delivered to France, and he subsequently sold them to the defendant Burgett, who purchased and received them without notice that the plaintiff had any claim to them. The court sustained Ballard's claim; and subsequent cases in New York are in harmony with this decision. See Cole v. Mann, 62 N. Y. 1 ; Bean v. Edge, 84 N. Y. 510. * * * The decisions in Maine, New Hampshire, and Vermont are under- stood to be substantially to the same effect as those of Massachusetts and New York; though by recent statutes in Maine and Vermont, as also in Iowa, where the same ruling prevailed, it is declared in effect that no agreements that personal property, bargained and de- livered to another, shall remain the property of the vendor, shall be valid against third persons without notice. George v. Stubbs, 26 Me. 243 ; Sawyer v. Fisher, 32 Me. 28 ; Brown v. Haynes, 52 Me. 578; Boynton v. Libby, 62 Me. 253; Rogers v. Whitehouse, 71 Me. 222 ; Sargent v. Gile, 8 N. H. 325 ; McFarland v. Farmer, 42 N. H. 386; King v. Bates, 57 N. H. 446; Hefflin v. Bell, 30 Vt. 134; Arm- ington v. Houston, 38 Vt. 448, 91 Am. Dec. 366; Fales v. Roberts, 38 Vt. 503 ; Duncan v. Stone, 45 Vt. 123 ; Moseley v. Shattuck, 43 Iowa, 540; Thorpe v. Fowler, 57 Iowa, 541, 11 N. W. 3. The same view of the law has been taken in several other states. In New Jersey, in the case of Cole v. Berry, 42 N. J. Law, 308, 36 Am. Rep. 511, it was held that a contract for the sale of a sewing- machine to be delivered and paid for by installments, and to remain the property of the vendor until paid for, was a conditional sale, and RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 93 gave the vendee no title until the condition was performed; and the cases are very fully discussed and distinguished. In Pennsylvania the law is understood to be somewhat different. It is thus summarized by Judge Depue, in the opinion delivered in Cole v. Berry, 42 N. J. Law, 314 (36 Am. Rep. 511), where he says: "In Pennsylvania a distinction is taken between delivery under a bailment, with an option in the bailee to purchase at a named price, and a delivery under a contract of sale containing a reservation of title in the vendor until the contract price be paid ; it being held that in the former instance property does not pass as in favor of creditors and purchasers of the bailee, but that in the latter instance delivery to the vendee subjects the property to execution at the suit of his creditors, and makes it transferable to bona fide purchasers. Cham- berlain v. Smith, 44 Pa. 431 ; Rose v. Story, 1 Pa. 190 [44 Am. Rep. 121] ; Martin v. Mathiot, 14 Serg. & R. 214 [16 Am. Dec. 491] ; Haak v. Linderman, 64 Pa. 499 [3 Am. Rep. 612]." But, as the learned judge adds: "This distinction is discredited by the great weight of authority, which puts possession under a conditional con- tract of sale and possession under a bailment on the same footing, — liable to be assailed by creditors and purchasers for actual fraud, but not fraudulent per se." In this connection, see the case of Copland v. Bosquet, 4 Wash. C. C. 588, Fed. Cas. No. 3,212, where Mr. Justice Washington and Judge Peters (the former delivering the opinion of the court) sus- tained a conditional sale and delivery against a purchaser from the vendee, who claimed to be a bona fide purchaser without notice. In Ohio the validity of conditional sales accompanied by delivery of possession is fully sustained. The latest reported case brought to our attention is that of Call v. Seymour, 40 Ohio St. 670, which arose n a written contract contained in several promissory notes given for installments of the purchase money of a machine, and resembling very much the contract in the case now under consideration. Fol- lowing the note, and as a part of the same document, is this condi- tion: "The express conditions of the sale and purchase of the sep- arator and horse-power for which this note is given, is such that the title, ownership, or possession does not pass from the said Seymour, Sabin & Co. until this note, with interest, is paid in full. The said Sey- mour, Sabin & Co. have full power to declare this note due. and take ession of said separator and horse-power, at any time they may mi this note insecure, even before the maturity of the note, and to sell lid machine at public or private sale, the proceeds to be ap- plied upon the unpaid balance of the purcha e price." The machine eized under an attachment issued against the vendee, and the ion was broughl by the vendor againsl the constable who served attachment. The ca e was fully argued, and the authorities pro' and con duly coi ed by the court, which sustained the condition 94 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS expressed in the contract, and affirmed the judgment for the plain- tiff. See, also, Sanders v. Keber, 28 Ohio St. 630. The same law prevails in Indiana. Shireman v. Jackson, 14 Ind. 459; Dunbar v. Rawles, 28 Ind. 225, 92 Am. Dec. 311; Bradshaw v. Warner, 54 Ind. 58; Hodson v. Warner, 60 Ind. 214; McGirr v. Sell, 60 Ind. 249. The same in Michigan. Whitney v. McConnell, 29 Mich. 12; Smith v. Lozo, 42 Mich. 6, 3 N. W. 227; Marquette Manuf'g Co. v. Jeffery, 49 Mich. 283, 13 N. W. 592. The same in Missouri. Ridgeway v. Kennedy, 52 Mo. 24; Wangler v. Franklin, 70 Mo. 659; Sumner v. Cottey, 71 Mo. 121. The same in Alabama. Fairbanks v. Eureka, 67 Ala. 109; Sumner v. Woods, 67 Ala. 139, 42 Am. Rep. 104. The same in several other states. For a very elab- orate collection of cases on the subject, see Mr. Bennett's note to Benj. Sales, (4th Ed.) § 320, pp. 329-336; and Mr. Freeman's note to Kanaga v. Taylor, 70 Am. Dec. 62 ; Id. 7 Ohio St. 134. It is un- necessary to quote further from the decisions. The quotations al- ready made show the grounds and reasons of the rule. The law has been held differently in Illinois, and very nearly in conformity with the English decisions under the operation of the bankrupt law. The doctrine of the supreme court of that state is that if a person agrees to sell to another a chattel on condition that the price shall be paid within a certain time, retaining the title in himself in the mean time, and delivers the chattel to the vendee so as to clothe him with the apparent ownership, a bona fide pur- chaser, or an execution creditor of the latter, is entitled to protection as against the claim of the original vendor. Brundage v. Camp, 21 111. 330; McCormick v. Hadden, 37 111. 370; Murch v. Wright, 46 111. 488, 95 Am. Dec. 455 ; Michigan Cent. R. Co. v. Phillips, 60 111. 190; Lucas v. Campbell, 88 111. 447; Van Duzor v. Allen, 90 111. 499. Perhaps the statute of Illinois on the subject of chattel mortgages has influenced some of these decisions. This statute declares that "no mortgage, trust deed, or other conveyance of personal property hav- ing the effect of a mortgage or lien upon such property, is valid as against the rights and interests of any third person, unless the pos- session thereof be delivered to and remain with the grantee, or the in- strument provide that the possession of the property may remain with the grantor, and the instrument be acknowledged and recorded." It has been supposed that this statute indicates a rule of public policy condemning secret liens and reservations of title on the part of ven- dors, and making void all agreements for such liens or reservations unless registered in the manner required for chattel mortgages. At all events, the doctrine above referred to has become a rule of property in Illinois, and we have felt bound to observe it as such. In the case of Hervey v. Rhode Island Locomotive Works, 93 U. S. * 664, 23 L. Ed. 1003, where a Rhode Island company leased to certain Illinois railroad contractors a locomotive engine and tender at a cer- RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 95 tain rent, payable at stated times during the ensuing year, with an agreement that, if the rent was duly paid, the engine and tender should become the property of the lessees, and possession was delivered to them, this court, being satisfied that the transaction was a conditional sale, and that, by the law of Illinois, the reservation of title by the lessors was void' as against third persons unless the agreement was recorded, (which it was not in proper time,) decided that a levy and sale of the property in Illinois, under a judgment against the lessees, were valid, and that the locomotive works could not reclaim it. Mr. Justice Davis, delivering the opinion of the court, said : "It was de- cided by this court in Green v. Van Buskirk, 5 Wall. 307, 18 L. Ed. 599, and 7 Wall. 139, 19 L. Ed. 109, that the liability of property to be sold under legal process issuing from the courts of the state where it is situated, must be determined by the law there, rather than that of the jurisdiction where the owner lives. These decisions rest on the ground that every state has the right to regulate the transfer of property within its limits, and that whoever sends property to it im- pliedly submits to the regulations concerning its transfer in force there, although a different rule of transfer prevails in the jurisdic- tion where he resides. * * * The policy of the law in Illinois will not permit the owner of personal property to sell it, either absolutely or conditionally, and still continue in possession of it. Possession is one of the strongest evidences of title to this class of property, and cannot be rightfully separated from the title, except in the manner pointed out by the statute. The courts of Illinois say that to suffer, without notice to the world the real ownership to be in one person, and the ostensible ownership in another, gives a false credit to the latter, and in this way works an injury to third persons. Accordingly, the actual owner of personal property creating an interest in another co whom it is delivered, if desirous of preserving a lien on it, must iply with the provisions of the chattel mortgage act. Rev. St. 111. 1874. 711, 712." The Illinois cases are then referred to by the learned justice to show the precise condition of the law of that state on the subject under consideration. Thi of Ilervey v. Rhode [sland Locomotive Works is relied on by the appellants in the presenl case a, a decision in their favor; hut thi Ot a correct conclusion, for it is apparent that the only poii 1 in that case were — First, that it was to he governed by the law of Illinois, the place where the property was lated; ,ndly, that b law of tllinois the agreemenl for continuing the title of the ; , v in the vendors after il- deliver) to the ven- vhereby the latter became th< risible owners, was void as insl third pei ' all that was decided, and it does \u>\ aid the ap . unless they can 3how that the law as held in tllinois, contrary to the great weight "f authority in England and this country, that which should govern the | And this we think they 1)6 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS cannot do. We do not mean to say that the Illinois doctrine is not supported by some decisions in other states. There are such deci- sions; but they are few in number compared with those in which it is held that conditional sales are valid and lawful as well against third persons as against the p "ties to the contract. The appellants, however, rely with much confidence on the decision of this court in Heryford v. Davis, 102 U. S. 235, 26 L. Ed. 160, a case coming from Missouri, where the law allows and sustains con- ditional sales. But we do not think that this case, any more than that L.t Hervey v. Rhode Island Locomotive Works, will be found to sup- port their views. The whole question in Heryford v. Davis was as to the construction of the contract. This was in the form of a lease, but it contained provisions so irreconcilable with the idea of its being really a lease, and so demonstrable that it was an absolute sale with a reservation of a mortgage lien, that the latter interpretation was given to it by the court. This interpretation rendered it obnoxious to the statute of Missouri requiring mortgages of personal property to be recorded in order to be valid as against third persons. It was con- ceded by the court, in the opinion delivered by Mr. Justice Strong, that if the agreement had really amounted to a lease, with an agree- ment for a conditional sale, the claim of the vendors would have been valid. The first two or three sentences of the opinion furnish a key to the whole effect of the decision. Mr. Justice Strong says : "The correct determination of this case depends altogether upon the con- struction that must be given to the contract between the Jackson & Sharp Company and the railroad company, against which the defend- ants below recovered their judgment and obtained their execution. If that contract was a mere lease of the cars to the railroad company, or if it was only a conditional sale, which did not pass the owner- ship until the condition should be performed, the property was not subject to levy and sale under execution at the suit of the defend- ant against the company. But if, on the other hand, the title passed by the contract, and what was reserved by the Jackson & Sharp Company was a lien or security for the payment of the price, or what is called sometimes a mortgage back to the vendors, the cars were subject to levy and sale as the property of the railroad company." The whole residue of the opinion is occupied with the discussion of the true construction of the contract ; and, as we have stated, the con- clusion was reached that it was not really a lease nor a conditional sale, but an absolute sale, with the reservation of a lien or security for the payment of the price. This ended the case ; for, thus inter- preted, the instrument inured as a mortgage in favor of the vendors, and ought to have been recorded in order to protect them against third persons. But whatever the law may be with regard to a bona fide purchaser from the vendee in a conditional sale, there is a circumstance in the RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 97 present case which makes it clear of all difficulty. The appellant in the present case was not a bona fide purchaser without notice. The court below find that, at the time of and prior to the sale, he knew the purchase price of the property had not been paid, and that Russell & Co. claimed title thereto until such pa>. ^ent was made. Under such circumstances, it is almost the unanimous opinion of all the courts that he cannot hold the property as against the true owners ; but as the rulings of this court have been, as we think, somewhat misunder- stood, we have thought it proper to examine the subject with some care, and to state what we regard as the general rule of law where it is not affected by local statutes or local decisions to the contrary. It is only necessary to add that there is nothing either in the statute or adjudged law of Idaho to prevent, in this case, the operation of the general rule, which we consider to be established by overwhelming authority, namely, that, in the absence of fraud, an agreement for a conditional sale is good and valid as well against third persons as against the parties to the transaction; and the further rule, that a bailee of personal property cannot convey the title, or subject it to execution for his own debts, until the condition on which the agree- ment to sell was made, has been performed. The judgment of the supreme court of the territory of Utah is affirmed. SPOOXER v. CUMMINGS. reme Judicial Court of Massachusetts, 1890. 151 Mass. 313, 23 N. E. 839.) Replevin of a horse. Answer, general denial. Plaintiff proved ownership prior to May 26, 1888, and identified the horse as the one described as "one black horse called 'Jenks horse,' " delivered to D. F. Pope, but never paid for, under the following contract: "Hudson, May 26, 1888. "Received of L. R. Spooner, this day, one gray marc, called 'Hor- ton marc ;' one gray horse, called 'J er, ks horse ;' one black horse, called 'Jenks horse;' one white-nose horse, called 'Boston horse;' for which I promise to pay said I„. R. Spooner or order five hundred seventy-five dollars, one month from date, at City National Bank, with interest at 7 per cent. Said horses and marc to be and re- main the entire and absolute property of said Spooner until paid in full by me. And 1 hereby agree ti ■ said horses and mare in good order and condition, as the same now are. And should said horses and mare die before said sum is fully paid, 1 hereby agree to ins due thereon. And should said horses or mare be re- turned to or taken back by said Spooner, I agree thai all payments made thereon may be retained by said Spooner for the use of said horses and mare, Daniel K. Pope." Cum. i . i -7 OS EFFECT IN PASSING PROPERTY — SPECIFIC GOODS Plaintiff kept a livery and sale stable in Worcester, and had sold horses to Pope largely within the past three or four years. Plaintiff asked the court to rule that under the answer defendant could only show that the contract relied on was not made, or that the horse had been paid for; but the court ruled that defendant might show, also, that plaintiff gave Pope authority, express or implied, by the course of dealing, to sell the horse before he paid for it. Against his objection, plaintiff was required to answer, in cross- examination, the following question : "What was the course of dealing between you and Pope in the year 1888, about May 26th, and extending back a little and forward a little?" and the following evidence from plaintiff in cross-examination, was admitted : "I sold Pope fifty horses, perhaps, in the year 1888. I supposed that Pope wouldn't use fifty horses in his livery stable unless he sold some. He usually kept from twenty-five to thirty. Naturally he would want to sell some that he had, or some other ones, to make room. I didn't expect he would sell any of mine until he paid for them. I would have made objections to his selling one of my horses, even if he sent me the money the next day." Pope was permitted to testify that "the course of dealing between plaintiff and me was I'd buy horses and give these contracts, and I'd send him money, and he'd apply it where he saw fit, on any of these contracts. He used to urge me to sell, that he had a barn full. Sometimes I'd tell him I wanted a horse for a particular person. I told him this time I wanted a horse for a teamster." J. A. Trull was permitted to testify that about the middle of June, 1888, Spooner told him to tell Pope that he had a carload coming, and to sell as many as he could. Defendant bought this horse of Pope, June 2, 1888, and paid cash at the time. Knowlton, J. Under the answer of the defendant, any evidence was competent which tended to contradict the contention of the plaintiff that the title to the horse and the right of possession were in him. Verry v. Small, 16 Gray, 122; Whitcher v. Shattuck, 3 Allen, 319. The defendant was not a party to the written contract between the plaintiff and Pope, but claimed outside of it, and in sup- port of his own title he might show by parol what was the real ar- rangement between them, even if it differed from that contained in the writing. Kellogg v. Tompson, 142 Mass. 76, 6 N. E. 860. If the plaintiff expressly or impliedly authorized the sale by Pope to him, he, having bought in good faith from the apparent owner, ac- quired a good title. It is immaterial whether his right depends upon an actual authority to make the sale, or upon facts which estop the plaintiff from denying the validity of the sale. Burbank v. Crook- er, 7 Gray, 159, 66 Am. Dec. 470; Haskins v. Warren, 115 Mass. 514, 538 ; Tracy v. Lincoln, 145 Mass. 357, 14 N. E. 122 ; Bank v. Buffin- ton, 97 Mass. 498; Fowler v. Parsons, 143 Mass. 401, 9 N. E. 799. The testimony as to the course of dealing between the plaintiff RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 99 and Pope, involving a long series of transactions, all of the same kind, and conducted generally in the same way, was competent, as tending to show an expectation and understanding on the part of both that Pope would sell the horses which he bought of the plain- tiff as he had opportunity, and that he was impliedly authorized to sell this horse to the defendant. Hubbell v. Flint, 13 Gray, 277; Bank v. Goodsell, 107 Mass. 149; Lynde v. McGregor, 13 Allen, 172; Bragg v. Railroad Corp., 9 Allen, 54. The testimony of Trull, as to the message sent to Pope by the plaintiff about the middle of June, was of a conversation so soon after the sale of June 2d to the de- fendant that the judge might well admit it in his discretion. It re- lated to the general course of dealing, of which the sale to Pope of the horse replevied was a part. The jury were rightly permitted to find that the plaintiff impliedly authorized the sale by Pope to the defendant, and that he was es- topped to deny the validity of the title which the defendant acquired, relying on Pope's possession and apparent ownership. Exceptions overruled. PEOPLE'S FURNITURE & CARPET CO. v. CROS- BY et al. (Supreme Court of Nebraska, 1S9S. 57 Neb. 2S2, 77 N. W. 65S, 73 Am. St. Rep. 504.) Irvine, C. The People's Furniture & Carpet Company sold to Mrs. Crosby a bedstead, mattress, and pillows for $92.50. The sale was evidenced by a written contract under the guise of a lease, with an option in the lessee to purchase. In legal effect, the contract was plainly one of conditional sale, the vendor reserving title as security for the purchase money. Payments were made from time to time, not always according to the terms of the so-called lease, and some after the time when, by its terms, payment should have been com- plete. In this way there was paid altogether the sum of $87, leaving 50 unpaid. Mrs. Crosby thereafter sold, or attempted to sell, the bedstead and mattress, to Ellis Coder, and gave him possession thereof. The People's Company later sued on a writ of replevin for the goods, and they were taken from the possession of Coder. The suit was broughl in the court of a justice of the peace. ( »n ap- peal Coder recovered a judgment, and the plaintiff brings the < on error. A decision is sought on several points relating to the construc- tion and legal effect of the contract, bul the judgment must be af- firmed on a consideration of only a pari of the transactions. The writ of replevin was sued out against Mrs. Crosby alone, the original vendee. No demand was made upon her, nor was there ever any serviee of proci Upon her. An agent of the plaintiff went with 100 EFFECT IN PASSING PROPERTY SPECIFIC GOODS the officer, while he held the writ, to the house of Coder, and there demanded the property. The agent informed Coder of the rights of the plaintiff, of which he seems to have been in fact ignorant, al- though charged with notice by a proper filing of the contract for record. As soon as possible, and before the property had been re- moved, Coder made a tender of the amount which the agent stated to be due. It is true that this amount was $5.50, and Coder tendered $6, demanding the change; but the tender was not refused because not of a legal character, but because the costs of the replevin pro- ceedings were not included. When the tender is refused because not deemed sufficient in amount, and absolutely, it cannot be avoided merely because not in lawful money to the precise amount. Guth- man v. Kearn, 8 Neb. 502, 1 N. W. 129; Grazing Co. v. Price, 22 Neb. 96, 34 N. W. 97. The officer then took the goods. After- wards Coder made a precise legal tender to the plaintiff, and it was refused. Later Coder's name was inserted in the writ and other papers, and he appeared and defended. We think it is the law — and it certainly ought to be — that where goods have been sold, reserving title as security for the purchase money, a large portion thereof has been paid, and the vendor has accepted payments, as in this case, after the day when payment should have been completed, he is in no position to retake the goods with- out notice and without demand. In such case a tender on demand of the amount remaining due is .sufficient to retain in the vendee the right of possession. O'Rourke v. Hadcock, 114 N. Y. 541, 22 N. E. 33; Taylor v. Finley, 48 Vt. 78; Machine Co. v. Bothane, 70 Mich. 443, 38 N. W. 326. Besides the objection to the tender already disposed of, it is said that it was not kept good, and that it should have included costs. The whole of the record before the justice of the peace is not before us. So far as we have the record here, the tender seems to have been kept good, and we need not, therefore, inquire whether it was necessary to do so. On the other point, it is quite clear that there was, when the tender was made, no liability for costs. The cases cited as holding that no demand is necessary prior to bringing suit are cases where the question was as to the liability for costs at the close of the action, or where the attempt was to defeat an action in replevin for want of demand. In such cases it is held that asserting a right in one's self avoids the necessity of a previous demand. In such cases the demand reaches only the question of procedure. It has not been held, nor is it the law, that when a demand is neces- sary, not merely to lay the foundation for the remedy, but to com- plete a right of possession in the plaintiff, the defendant, by denying the right of possession, waives such requisite thereto. Under the rule above stated the plaintiff was in no position to assert a right of possession until a demand had been made, and there had been af- forded an opportunity to make the remaining payment. The suit EESERVATION OF RIGHT OF POSSESSION OR PROPERTY 101 had been instituted without a demand. Coder was not a party, and the officer was then, as to him, a trespasser. He was not required to pay costs on his own account. Regarding him as the representative of Mrs. Crosby, the situation is the same. The plaintiff had no right of action against her until demand — not for the goods, but for the money. The writ had been sued out without such demand, and when tender was made she was not liable for the costs then accrued. The point is not made, but it undoubtedly suggests itself, that in- terest was properly demandable from the time payment should have been made. The tender was made of the amount which the plaintiff's agent stated remained unpaid, and defendant had a right to rely on such statement. Error is assigned on the admission in evidence of certain docu- ments from the files of the justice. The case was tried to the court without the intervention of a jury, so these assignments are unavail- ing. Moreover, the evidence objected to was competent and ma- terial as showing that when tender was made Coder had not been sued. Affirmed. 2. Risk of Loss TUFTS v. GRIFFIN. (Supreme Court of North Carolina, 1S90. 107 N. C. 47, 12 S. E. 68, 10 L. R. A. 520, 22 Am. St Rep. 863.) Action by James W. Tufts against J. S. Griffin on a note given by defendant for part of a purchase price of a soda fountain purchased by him of plaintiff. By the contract of sale the title to the property sold was not to pass until the entire price was paid. The property >troyed before the note matured. Judgment for plaintiff, defendant appeals. Shepherd, J. This is a case of the first impression in this state. We have here an absolute promise of the defendant to pay the plain- tiff a certain sum, it being the balance of the purchase money due the plaintiff upon the sale of a soda apparatus to the defendant. Tin- sale was a conditional one, (see Clayton v. 1 1 ester, 80 N. C. 275; Fridk v. Hilliard, 95 N. C. 117; and the cases cited,) and, under the contract, the defendant took the apparatus into his possession, and ! it in all respects as his own. Without any n< rice on the part of the defendanl and before any defaull in the payment of the purchase money, the pi was d< stroyed by fire. The question i . ho hall hear the loss? Tl ndanl ii hould fall upon the plaintiff becau the transaction amounted to nothing more than an executory agi 102 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS ment to sell, and that, inasmuch as the plaintiff cannot now perform i he contract, the defendant should not be compelled to pay. It is very true that such contracts are sometimes called "executory," (as in the case of Ellison v. Jones, 26 N. C. 48,) and the vendee is also termed a "bailee," (Perry v. Young, 105 N. C. 466, 11 S. E. 511,) but it must be observed that these expressions are used in reference to the strict, legal title to the property, and they can therefore have no influence in the determination of the present question, which is purely one of considerations for an absolute promise to pay. The recent decision in Burnley v. Tufts, 66 Miss. 49, 5 South. 627, 14 Am. St. Rep. 540, is directly in point. There, it seems that this same plantiff sold a soda apparatus under a contract precisely simi- lar to this, and the property was destroyed, as in this case, after some of the notes had been paid, and before the maturity of the oth- ers. The court decided that the plaintiff was entitled to recover the amount due upon the remaining notes. As we entirely concur in the reasoning upon which the decision is based, we will reproduce a part of the language of the opinion. The court says: "Burnley unconditionally and absolutely promised to pay a certain sum for the property, the possession of which he received from Tufts. The fact that the property has been destroyed while in his custody, and be- fore the time for the payment of the note last due, on payment of which only his right to the legal title of the property would have accrued, does not relieve him of payment of the price agreed on. He got exactly what he contracted for, — viz., the possession of the prop- erty, and the right to acquire an absolute title by payment of the agreed price. The transaction was something more than an execu- tory conditional sale. The seller had done all he was to do except to receive the purchase price. The purchaser had received all that he was to receive as the consideration of his promises to pay. The inquiry is not whether, if he had foreseen the contingency which has occurred, he would have provided against it, nor whether he might have made a more prudent contract ; but it is whether by the contract he has made his promise absolute or conditional. The contract was a lawful one, and, as we have said, imposed upon the buyer an ab- solute obligation to pay. To relieve him from this obligation, the court must make a new agreement for the parties, instead of en- forcing the one made, which it cannot do." As is said in the foregoing extract, the vendor has done all that he was required to do, and the transaction amounted to "a condi- tional sale to be defeated upon the non-performance of the condi- tions. * * * The vendee had an interest in the property which he could convey, and which was attachable by his creditors, and which could be ripened into an absolute title by the performance of the conditions." 1 Whart. Cont. § 617. The vendee had the actual, legal, and rightful possession with a right of property upon the pay- ment of the money. Vincent v. Cornell, 13 Pick. 296, 23 Am. Dec. SALE ON APPROVAL OR TRIAL 103 683. The vendor could not have interfered with this possession "until a failure to perform the conditions." Newhall v. Kingsbury, 131 Mass. 445. Having acquired these rights, under the contracts, and the property having been subjected to the risks incident to the exercise of the exclusive right of possession, it would seem against natural justice to say that there was no consideration for the promise, and that the loss should fall upon the plaintiff. The case of Swallow v. Emery, 111 Mass. 356, cited by the defend- ant, may, perhaps, be distinguished from ours, because it was agreed that, upon the payment of the price, the vendor was to execute a bill of sale to the vendee. However this may be, we think that the. principles enunciated in Burnley v. Tufts, supra, are better sus- tained, both by reason and authority, and we therefore affirm the judgment of the court below. No error. 5 IV. Sale on Approval or Trial 8 HUNT v. WYMAN. (Supreme Judicial Court of Massachusetts, 1SG8. 100 Mass. 19S.) Contract on an account annexed for $250 as the price of a horse. Writ dated September 5, 1867. Answer, a general denial. At the trial in the superior court, before Morton, J., the plaintiff testified that he had the horse for sale, and on the evening of August 12, 1867, the defendant looked at it and inquired the price, and was told $250; that the defendant said nothing further about price, but asked the character of the horse, and was told that the horse was six years old, sound, kind, and afraid of nothing but goats; that the defendant wished to take the horse to try it, and at this the plaintiff hesitated, and the defendant then told him that "if he would let him take the horse and try it, if he did not like it he would return it, in as good condition as he got it, the night of the day he took it," to which the plaintiff assented; and that the next day the defendant sent his serv- ant and took the horse from the plaintiff aboul eleven o'clock in the fun-noon. The plaintiff Further testified that the horse was taken for the pur- e of trying it; that a short time .after it was taken a message was brought to him that, before it reached the defendant's place, it es- caped from the servant, ran away and was injured; that mi receiving tli<- me In- wenl to the stable where the horse was, and found it injured rely that it could not he used or removed prudently; ompare Dunlap \. Grote, 'i 0. & K. L53 (1845). i or dl 'ii i"n "f principles, see Tiffany, s.-iirs (2d Ed.) S 15, 104 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS that, on account of the injury, the defendant had no opportunity to try the horse; that he did not expect that the defendant would finally take the horse until after he had tried it; that the defendant had neither returned the horse nor offered to return it; and that the plaintiff had nothing to do with the horse since he put it in charge of the defendant's servant. There was no evidence, and it was not contended by the plaintiff, that the horse was injured by fault of the defendant or his servant. The judge ruled that the plaintiff could not maintain his action on this evidence, and directed a verdict for the defendant which was re- turned; and the plaintiff alleged exceptions. WELLS, J. Upon the facts stated in this case, there was a bail- ment and not a sale of the horse. The only contract, aside from the obligations implied by law, must be derived from the statement of the defendant, that, if the plaintiff "would let him take the horse and try it, if he did not like it he would return it in as good condition as he got it." This contract, it is true, is silent as to what was to take place if he should like it, or if he should not return it. It may perhaps be fairly inferred that the intent was that if he did like the horse he was to become the purchaser at the price named. But, even if that were expressed, the sale would not take effect until the de- fendant should determine the question of his liking. An option to purchase if he 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 mere failure to return the horse within the time agreed may be a breach of contract, upon which the plaintiff is entitled to an ap- propriate remedy ; but has no such legal effect as to convert the bail- ment into a sale. It might be evidence of a determination, by the de- fendant, of his option to purchase. But it would be only evidence. In this case, the accident to the horse, before an opportunity was had for trial in order to determine the option, deprives it of all force, even as evidence. This action, being founded solely upon an alleged sale of the horse for an agreed price, cannot be maintained upon the evidence report- ed. Exceptions overruled. SALE OR EETUEN V. Sale or Return T 105 HOUSE v. BEAK. (Supreme Court of Illinois, 1892. 141 111. 290, 30 N. E. 1065, 33 Am. St. Rep. 307.) Assumpsit for goods sold, brought by Amelia Beak and Alfred Bucher, late partners under the firm name of Beak & Bucher, suing for the use of Wight Bros., a copartnership, against Everett House, S. G. Lea, and others, composing the firm of Lea & Co. There was a judgment for plaintiffs, which was affirmed by the Appellate Court, and defendants appeal. MagrudER, C J. s * * * It is further assigned as error that the court refused to instruct for the defendants as follows: "The jury are instructed that, as to the claim of plaintiffs for goods claim- ed to have been consigned by plaintiffs to defendants, there is no sufficient evidence to support a verdict," etc. The point is made that a portion of the goods was consigned to the defendants, to be paid for when sold, and to be returned if not sold; and that an ac- tion of assumpsit on the common counts cannot be maintained to recover for the goods so consigned, because, there is no evidence of their sale by the defendants, or of a demand for their return by the plaintiffs. Under the proofs in this case the goods in question were not con- signed to the defendants to be sold by the latter as agents of the plaintiffs, but the agreement between the parties was what is known as a contract "on sale or return." "A contract 'on sale and return' is an agreement by which goods are delivered by a wholesale dealer to a retail dealer, to be paid for at a certain rate if sold again by the latter, and, if not sold, to be returned." Story, Sales. § 249. If the vendee returns the goods, the contract of sale is at an end ; it he does . the sale be< absolute, and the price of the goods may be recovered in an action for goods sold and delivered. If no time is specified within which the return is to be made, the law implies thai they arc to be returned within a reasonable time. What is a reason- able time will depend upon the circumstances of each case. Id. In such cases the property in the goods passes to the purchaser, sub- tion in him to return them within a fixed or reasonable time. The price is fixed al the time of the sale and delivery of the ids. The purchaser deals with the g Is as his own, disposes of them as he plea , foi cash or on credit, is under no obligation to give any account of his disposition of them, and is only liable to pay 7 For 01 cussion of principles, see Tiffany, Salea (2d Ed.) § W. »X] emenf of fact I rewritten and pari of the opinion Is omitted. 106 EFFECT IN PASSING PROPERTY — SPECIFIC GOODS for them at a price fixed beforehand, without any reference to the price at which he sells them. Jameson v. Gregory, 4 Mete. (Ky.) 363; In re Linforth, 4 Sawy. 370, Fed. Cas. No. 8,369; Ex parte White, In re Nevill, L. R. 6 Ch. App. 397. In Moss v. Sweet, 3 Eng. Law & Eq. 311, where goods were de- livered to the defendant to sell again, upon his agreement to ac- count for such as were sold at the invoice price, with an option to return the residue within a reasonable time, and where he sold a portion, but failed to return the rest, it was held that his failure to return rendered him liable as upon an absolute sale and to an ac- tion for goods sold and delivered. The bargain called "sale or return" means "a sale with a right on the part of the buyer to return the goods at his option, within a reasonable time, and * * * the property passes ; and an ac- tion for goods sold and delivered will lie if the goods are not re- turned to the seller within a reasonable time." 2 Benj. Sales, (6th Amer. Ed.) § 913, p. 794. Such sales may be regarded as subject to a condition subsequent, — that is, upon condition that, if the goods are not sold, they are to be returned. Therefore the property vests presently in the vendee, defeasible on the performance of the condition. If the defendant disables himself from performing the condition, or fails to perform it within a reasonable time, his liability to pay the price fixed becomes unconditional, and the plaintiff may declare as upon an indebitatus assumpsit. Ray v. Thompson, 12 Cush. 281, 59 Am. Dec. 187. These definitions of a contract "on sale or return" fit the facts in the case at bar. The prices were fixed upon the goods when they were ordered. The consigned goods were to be paid for when sold, at the prices invoiced ; and such as were not sold were to be return- ed. As no time for the return was fixed, a reasonable time was im- plied. The defendants kept the goods for more than three years without offering to return them, and accepted itemized accounts of them without objection. Demands were frequently made upon them to pay for the consigned goods, and, if such goods were unsold at the dates of such demands, offers should have then been made to re- turn them. Under the circumstances, we think the defendants failed to exercise their option within a reasonable time, and are liable as upon an absolute sale. There was therefore no error in refusing the instruction. The cases of Creel v. Kirkham, 47 111. 344, and Johnston v. Salis- bury, 61 111. 316, have no application here, as in those cases there was no sale of the personal property by a vendor to the vendee so as to vest the title thereto in the latter at the time of delivery. Nor do we think that the case of Jones v. Wright, 71 111. 61, conflicts with the doctrine here announced. It was there said that the arrange- ment was, in legal effect, a sale, with the privilege of returning the property when the buyer should choose to make such return or on SALE OR RETURN 107 the demand of the seller. The buyer may make himself liable to pay the price fixed in the agreement by refusing to return the proper- ty upon demand made for it by the seller ; but, if the seller does not want the property, and makes no demand for it, it is none the less true that the buyer will become liable to pay the price fixed, upon failing to return the property within a reasonable time. In the present case, demands made for the price of the consigned goods, unanswered by either the payment of the money or an offer to return the goods, amounted substantially to such a refusal to surrender on demand as was held to be sufficient in the Jones Case. The judgment of the appellate court is affirmed. 108 EFFECT IN PASSING PBOPERTY — GOODS NOT SPECIFIC EFFECT OF CONTRACT IN PASSING THE PROPERTY— SALE OF GOODS NOT SPECIFIC I. In General x BROWNFIELD v. JOHNSON. (Supreme Court of Pennsylvania, 1SS9. 12S Pa. 254, 18 Atl. 543, 6 L. R. A. 48.) Clark, J. A complete understanding of the rules of law govern- ing this case involves a brief statement of the material facts : On the 2d day of December, 1886, Brownfield & Co., the defendants, gave an order to Lawrence Johnson & Co., to purchase for them in Brazil 300 bags best quality of new Brazil nuts, of the first receipts, pay- ment to be made in cash on arrival, or by 60-day note, etc., at the defendants' option, the plaintiffs to cable price at the time of ship- ment. On the same day the plaintiffs replied, stating that Brazil nuts were not bought by the bag, but by hectolitres, a measure which in past years averaged from 100 to 120 pounds ; that the nuts came in bulk in the steamer, and the defendants would have to furnish the bags on arrival in New York; and as "the outturn of the measure is uncertain" they proposed to order 450 hectolitres, etc. To this the defendants replied by telephone : "Order 400 hectolitres, and buy only the very best nuts obtainable." The plaintiffs placed the order in the hands of their correspondents, La Roque, Da Costa & Co., Para, Brazil, who undertook the purchase, and on the 9th of February following advised the plaintiffs of shipment per steamer Portuence, upon board of which were nearly 6,000 hectolitres of Bra- zil nuts for other parties. Of this shipment, and of the price, notice was on the same day given to the defendants. Upon the arrival of the Portuence in New York, Lawrence Johnson & Co., handed to the defendants a delivery order for 400 hectolitres of Brazil nuts in bulk, in separate hold, on board the Portuence, with copy of origi- nal invoice, and the plaintiffs' bill, amounting to $3,441.18. The invoice was for 312 hectolitres at 15,150 reis each, and 88 hectolitres at 14,000 reis each; showing that the nuts had been originally pur- chased in two separate lots, and at different prices. The defendants,. with the delivery order in their possession, proceeded to New York, and went on board the Portuence, where they found one consignment of nuts in the name of Brownfield & Co., but the plaintiff's storekeep- er informed them that the 400 hectolitres in question were embraced in a consignment of 582 hectolitres of Brazil nuts, in separate hold,. i For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 47, 48. IN GENERAL 109 in the name of the plaintiffs. The defendants thereupon refused to receive any portion of these nuts as an execution of their order. The plaintiffs tendered to the defendants the whole 582 hectolitres or 400 hectolitres thereof, at their option, at the invoiced prices; which tender, in either alternative, the defendants declined to accept. The plaintiffs afterwards tendered 400 hectolitres at the average price, which the defendants also declined. Subsequently the plaintiffs separated the 400 hectolitres from the lot, and notified the defendants of their weight, but the defendants absolutely declined to accept the nuts on any of the several propositions made by the plaintiffs. The 582 hectolitres were made up of two lots, — one of 312 hectolitre?, invoiced at 15,150 reis ; the other of 270 hectolitres, invoiced at 14.- 000 reis ; 88 hectolitres of the latter were invoiced to the defendants, and the residue, being 182 hectolitres, to Lawrence Johnson & Co., for account of La Roque, Da Costa & Co., who, it is said, according to the method of dealing in Brazil, in order to get 88 hectolitres to fill the order, were obliged to buy a larger lot. That all parties act- ed in good faith is a fact found by the jury, and the case turns upon the question whether the defendants' order was properly and legally executed. If the purchase had been of 400 hectolitres only, shipped in sepa- rate hold, there could be no question as to the defendants' liability for the price. What, then, was the effect of placing the 182 hecto- litres in the same hold with the 400 consigned to the defendants? It may be conceded as a general rule that, as between vendor and vendee, when it is sought to compel a party to pay for goods which he has refused to accept, there can be no recovery unless the order has been strictly and literally fulfilled. The buyer is entitled to re- fuse the whole of the goods tendered if they exceed the quantity ■ed, and the vendor has no right to insist upon the buyer's ac- •ance of all, or upon the buyer's selecting out of a larger quan- tity delivered. Benj. Sales, § 1030. To the same effect are the cases cited by the plaintiff in error. With reference to quantity, however, the rule is less rigid where goods are ordered from a correspondent who is agent for buying them, (Ireland v. Livingston, I,. R. 2 Q. B. 36 Law J. O. i;. 50; L. R. 5 II. L. 395;) for tin- relation of lor and vendee which finally results is preceded by the relation of principal and agent, and the agenl in such a transaction is neces- sarily invested with some dej ree of discretion in making the pur- cha ■ e, also, Johnston v. Kershaw, 1.. R. 2 Exch, 82, 36 Law J. h. 44, and Jefferson v. Quer - I lw T. (N. >7. It must led, however, that the purchase and tender of 582 hecto litres, upon an order for 400, would involve a wider discretion than •Id he allowable under thi of tins case, even as be- ll principal and agent. In this case, however, the plaintiff'- cor- re pondenl purchased for and invoiced to the defendants 400 hec to!: id thai quantity was tendered. The remaining 182 110 EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC hectolitres were not invoiced to the defendants, although the plain- tiffs proposed that the defendants might have them if they chose to take them. The 400 hectolitres of nuts unquestionably became the property of the defendants when purchased in Brazil, for they were purchased upon their order. By force of that order the plaintiffs be- came the defendants' agent, with authority to constitute an agent in Para for its execution; and the nuts were bought in virtue of the authority thus conferred. The only question, therefore, would seem to be upon the effect of the shipping of the whole lot of 582 hectolitres in one hold, al- though upon separate invoices, and to different consignees. It was shown that this was the usual method of shipping, especially when the orders were small. There was no effort to establish a custom of this kind, but simply to show that this was the usual and ordinary method pursued in the shipping trade. The defendants had a right to suppose these goods would be shipped in the usual manner, unless they directed otherwise, and that, although intermingled with others in the forward hold of the vessel for transportation, they would be separated at the place of delivery. The nuts in question were of the same quality ; they were bought at different prices, but the evidence is clear that they were of uniform quality. The weight of American authority supports the proposition that, when property is sold to be taken out of a specific mass of uniform quality, title will pass at once upon the making of the contract, if such appears to be the intent. Oil in a tank and grain in an elevator may serve as illustrations of this rule. Where, however, the property sold is part of a mass made up of units of unequal quality or value, such as cattle in a herd, selec- tion is 'essential to the execution of the contract, and of course the rule cannot apply. Benj. Sales, 477-531, and cases there cited. The storage of oil in tanks and of grains in elevators, although not uni- versal, is the usual and ordinary means employed by large dealers in those commodities ; and, while no custom of that kind, technically speaking, could be established, the usage of the trade and general course of business in this country is well known. In view of the necessities which grow of out such usage the American courts have departed from the rule adhered to in England, and have recognized a rule for the delivery of this class of property more in conformity with the commercial usages of the country. A distinction is made between those cases where the act of separation is burdensome and expensive, or involves selection, and those where the article is uni- form in bulk, and the act of separation throws no additional burden on the buyer. In the latter class of cases a tender of too much, from which the buyer is to take the proper quantity, is a good delivery. Id. 1030, note. See, also, Kimberly v. Patchin, 19 N. Y. 330, 75 Am. Dec. 334; Hutchison v. Com., 82 Pa. 472; Wilkinson v. Stew- art, 85 Pa. 255; Bretz v. Diehl, 117 Pa. 589, 11 Atl. 893, 2 Am. St. Rep. 706. SUBSEQUENT APPKOPRIATION HI The case at bar bears no analogy whatever to Stevenson v. Bur- gin; 49 Pa. St. 44, for all that is decided by that case is that, in a contract for a fixed quantity of merchandise to be delivered on board a vessel, the purchaser is not bound to accept and pay for a larger quantity. The principle has no application to the evidence in this case. The case at bar bears a closer analogy to Lockhart v. Bon- sall, 77 Pa. 53. In that case a tender of 5,000 barrels of oil was made by Lockhart to Bonsall out of a bulk of 5,981 barrels, contained in 118 bulk cars. As it was the duty of Bonsall to pump the oil from the cars into the tanks of the Anchor works, which had been desig- nated as the place of delivery, it was held that Lockhart was not bound to set apart the precise quantity named in the contract before offering to deliver. So, here, the measuring of the nuts, and their removal from the vessel, was the work of the defendants, and as the article was uniform in bulk, selection was of no consequence, nor was the act in any sense burdensome or expensive ; for, assum- ing that the whole bulk was to be measured, yet the expense attach- ed to the whole, and each part-owner was liable to share it. We are of opinion that, when the nuts were delivered on board the Portuence at Para, the title to 400-582 of the bulk belonged to the defendants, and that upon the arrival of the vessel at New York the tender of the 582 hectolitres from which the defendants were invited to take their share was a good delivery. The judgment is affirmed. II. Subsequent Appropriation 2 1. In General COMMONWEALTH v. FLEMING. (Supreme Court of Peniisyivimin. 1889. 130 Pa. 138, 18 Atl. 022, 5 L. R. A. 470, 17 Am. St Rep. 763.) The plaintiff in error, Joseph Fleming, being a wholesale liquor ler, licensed and carrying on business in Allegheny county, sold and sent from his place of business, C. O. D., to Mercer county, re he had no license, liquors ordered by persons in the latter comity. For this he was. at the court of quartei "is of Mercer mty, indicted, tried, convicted, and sentenced for selling liquor therein without a license. Me now brings error. ( , , J« In the case of Garbrachl v. Com., 96 Pa. -119, 42 Am. Rep. 550. which was an indictmenl for selling liquor without license, i or 'ii ■ m '"ii of principles, Bee Tiffany, Sales (2d Ed.) H 19, 50. i'. i it of the opinion i i omitted 112 EFFECT IN FASSINQ PROFERTY — GOODS NOT SPECIFIC \vc hold that "the place of sale is the point at which goods ordered or purchased are set apart and delivered to the purchaser, or to a common carrier, who, for the purposes of delivery, represents him." In that case the order for the liquor was solicited and obtained by the defendant in the county of Mercer, but was sent to his principal, who was a liquor dealer in the county of Erie. The order was ex- ecuted by the principal, who, in the county of Erie, at his place of business, separated or set apart from his general stock the liquor ordered, and delivered it to a common carrier to be forwarded to its destination in Mercer county. We decided that this was no viola- tion of the law prohibiting sales without license, although neither the defendant, who was a traveling agent, nor his principal held any license for the sale of liquor in Mercer county. This decision was not changed in the least upon a subsequent trial of the same de- fendant on a different state of facts, as reported in 1 Penny. 471. In the case now under consideration the liquor was sold upon or- ders sent by mail by the purchasers, living in Mercer county, to the defendant, who is a wholesale liquor dealer in Allegheny county. The goods were set apart at the defendant's place of business in Allegheny county, and were there delivered to a common carrier, consigned to the purchaser at his address in Mercer county, and by the carrier transported to Mercer county, and there delivered to the purchaser, who paid the expense of transportation. Upon these facts alone, the decision of this court in the Case of Garbracht, supra, is directly and distinctly applicable, and requires us to reverse the judgment of the court below, unless there are other facts in the case which distinguish it from that of Garbracht. It is claimed, and it was so held by the court below, that, because the goods were marked "C. O. D.," the sale was not complete un- til the delivery was made ; and as that took place in Mercer county, where the defendant's license was inoperative, he was without license as to such sales, and became subject to the penalty of the criminal law. The argument by which this conclusion was reached was simply that the payment of the price was a condition precedent to the de- livery, and hence there was no delivery until payment, and no title passed until delivery. The legal and criminal inference was, the sale was made in Mercer, and not in Allegheny. This reasoning ignores certain facts which require consideration. The orders were sent by the purchasers, in Mercer, by mail to the seller, in Allegheny, and in the orders the purchasers requested the defendant to send the goods C. O. D. The well-known meaning of such an order is that the price of the goods is to be collected by the carrier at the time of the delivery. The purchaser, for his own convenience, requests the seller to send him the goods, with authority in the carrier to receive the money for them. This method of payment is the choice of the purchaser, under such an order; and it is bevond question that, so SUBSEQUENT APPROPRIATION 113 far as the purchaser is concerned, the carrier is his agent for the receipt and transmission of the money. If the seller accedes to such a request by the purchaser, he certainly authorizes the purchaser to pav the money to the carrier, and the purchaser is relieved of all liabilities to the seller for the price of the goods if he pays the price to the carrier. The liability for the price is transferred from the seller to the carrier; and whether the carrier receives the price or not, at the time of delivery, he is liable to the seller for the price if he does deliver. Substantially, therefore, if the delivery is made bv the carrier, and he chooses to give credit to the purchaser for the pavment of the price, the transaction is complete, so far as the seller is concerned, and the purchaser may hold the goods. Of course, if the seller were himself delivering the goods in parcels upon condi- tion that on delivery of the last parcel the price of the whole should be paid, it would be a fraud on the seller if the purchaser, after get- ting all the parcels, should refuse to perform the condition upon which he obtained them, and in such circumstances the seller would be entitled to receive the goods. This was the case in Henderson v. Lauck, 21 Pa. 359. The court below, in that case, expressly charged that if the seller relied on the promise of the purchaser to pay, and delivered the goods absolutely, the right to the property was changed, although the conditions were never performed ; but if he relied, not on the promise, but on actual pavment at the delivery of the last load, he might reclaim the goods if the money was not paid. The case at bar is entirely different. So far as the seller is concerned, he is satisfied to take the responsibility of the carrier for the price, in place of that of the seller. He au- thorizes the purchaser absolutely to pay the price to the carrier; and, if lie does so, undoubtedly the purchaser is relieved of all re- sponsibility for the price, whether the carrier ever pays it to the seller or not. But the carrier is also authorized to deliver the goods. If he does so, and receives the price, he is of course liable for it to the r. But he is equally liable for the price if he chooses to deliver the goods without receiving the price. It cannot be questioned thai the purchaser would be liable also; but, as he had received the ods from one who was authorized to deliver them, his right to hold them over as against the seller .is undoubted. In other words, the dir i embodied in the letters "C. O. I >.," placed upon a package committed to a carrier, is an order to the carrier to collect the mone; For the pad of the time of its delivery. It is a part of the undertaking of the carrier with the consignor, a violation of which imposes upon the carrier the obligation to pay the price of the arti'-1<- delivered, to the consignor. We have been referred to no authority, and have been unable to discover any, for the proposition that in such a case, after actual, absolute delivery to the purchaser by the carrier without payment of the price, the seller could reclaim Conn t Ca I ■ 8 \ii:s — 8 114 EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC the goods from the purchaser as upon violation of a condition preced- ent. If, now, we pause to consider the actual contract relation between the seller and purchaser, where the purchaser orders the goods to be sent to him C. O. D., the matter becomes still more clear. Upon such an order, if it is accepted by the seller, it becomes the duty of the seller to deliver the goods to the carrier, with instruction to the carrier to collect the price at the time of delivery to the purchaser. In such a case it is the duty of the purchaser to receive the goods from the carrier, and, at the time of receiving them, to pay the price to the carrier. This is the whole of the contract, so far as the seller and the purchaser are concerned. It is at once apparent that when the seller has delivered the goods to the carrier, with the instruction to collect the price on delivery to the purchaser, he has performed his whole duty under the contract; he has nothing more to do. If the purchaser fail to perform his part of the contract, the seller's right of action is complete ; and he may recover the price of the goods from the purchaser, where the purchaser takes, or refuses to take, the goods from the carrier. Hence it follows that the passage of the title to the purchaser is not essential to the legal completeness of the contract of sale. It is, in fact, no more than the ordinary case of a contract of sale, wherein the seller tenders delivery at the time and place of delivery agreed upon, but the purchaser refuses perform- ance. In such case it is perfectly familiar law that the purchaser is legally liable to pay the price of the goods, although, in point of fact, he has never had them. The order to pay on delivery is merely a superadded term of the contract ; but it is a term to be performed by the purchaser, and has no other effect upon the contract than any other term affecting the factum of delivery. It must be performed by the purchaser, just as the obligation to receive the goods at a par- ticular time or a particular place. Its non-performance is a breach by the purchaser, and not by the seller, and therefore cannot affect the right of the seller to regard the contract of sale as complete, and completely performed on his part, without any regard to the question whether the title to the goods has passed to the purchaser as upon an actual reception of the goods by him. If this be so, the case of the commonwealth falls to the ground, even upon the most critical consideration of the contract between the parties, regard- ed as a contract for civil purposes only. The duties which lie inter- mediate between those of the seller and those of the purchaser are those only which pertain to, and are to be performed by, the car- rier. These, as we have before seen, are the ordinary duties of car- riage and delivery, with the additional duty of receiving the price from the purchaser, and transmitting it to the seller. The only decided case to which we have been referred which presents the effect of an order C. O. D. to a carrier is Higgins v. Murray, 73 N. Y. 252. There the defendant employed the plaintiff SUBSEQUENT APPROPRIATION 115 to manufacture for him a set of circus tents. When they were finish- ed, the plaintiff shipped them to the defendant C. O. D., and they were destroyed by fire on the route. It was held that the defendant, who was the purchaser, should bear the loss ; that the plaintiff had a lien on the tents for the value of his labor and materials, and his retaining his lien by shipping them C. O. D. was not inconsistent with, and did not affect, his right to enforce the defendant's liability. In the course of the opinion, Chief Justice Church said: "Sup- pose, in this case, that the defendant had refused to accept a delivery of the tent, his liability would have been the same, although the title was not in him. The plaintiff had a lien upon the article for the value of his labor and materials, which was good as long as he re- tained possession. * * * Retaining the lien was not inconsistent with his right to enforce the liability for which this action was brought. That liability was complete when the request to ship was made by the defendant, and was not affected by complying with the request, nor by retaining the lien the same as when the request was made. As the article was shipped at the request of, and for the bene- fit of, the defendant, (assuming that it was done in accordance with the directions.) it follows that it was at his risk, and could not impair the right of the plaintiff to recover for the amount due him upon the performance of his contract. * * * As before slated, the point as to who had the title is not decisive. It may be admitted that the plaintiff retained the title as security for the debt, and yet the defendant was liable for the debt in a proper personal action." It seems to us this reasoning is perfectly sound. Practically, it was ruled that the effect of the order C. O. D. was simply the retention of the seller's lien, and that such retention of lien is not incon sistent with a right of recovery for the price of the article, though, in point of fact, it is not delivered to the purchaser. In other words, the literal state of the title is not decisive of the question of liability of the purchaser, and he may be compelled to pay for the article, though he never received it into his actual possession. The chief justice propounds the very question suggested, heretofore, of a re- fusal by the purchaser to accept the article, and holds that his liability would be the same, though the title was not in him. In Hutchinson on Carriers, at section 389, the writer thus states the position and duty of the carrier: "The carrier who accepts the goods with such instructions [C. O. D."| undertakes thai the} shall nol be delivered unless the condition of payment be complied with, and h'' the agent of the shipper of thi to receive such payment. He therefore undertalo . in addition t<> his duties as carrier, to collect for the consignor the price of his goods." \.nd again, in section 390: "When the goods are so received, the carrier is held to a stricl compliance with such instructions; and, it" the are delivered without an exaction from the consignee of the amount which the carrier is instructed to collect, he becomes liable 11G EFFECT IN FASSING PROFERTY — GOODS NOT SPECIFIC to the consignor for it." This is certainly a correct statement of the position and liability of the carrier. He becomes subject to an added duty, — that of collection ; and, if he fails to perform it, he is liable to the seller for the price of the goods. We have searched in vain for any text-writer's statement, or any decision, to the effect that in such case no title passes to the purchaser. We feel well assured none such can be found. But, if this be so, the whole theory that the title does not pass if the money is not paid falls, and the true legal status of the parties results that the seller has a remedy for the price of the goods against the carrier. In other words, an order from a seller to a carrier to collect on delivery, accepted by the carrier, creates a contract between the seller and the carrier, for a breach of which by the carrier the seller may recover the price from him. So far as the seller and purchaser are concerned, the latter is liable, whether he takes the goods from the carrier or not, and the order itself is a mere provision for the retention of the seller's lien. While, if the goods are not delivered to the purchaser by the carrier, the title does not pass, that circumstance does not affect the character of the transaction as a sale ; and the right of the seller to recover the price from the purchaser, if he refuse to take them, is as complete as if he had taken them, and not paid for them. * * * Reversed. ANDREWS v. CHENEY. (Supreme Court of New Hampshire, 1882. 62 N. H. 404.) Assumpsit, to recover money paid for goods. Facts found by a referee. October 28, 1879, the plaintiff bought goods of the defend- ant and paid for them. The defendant did not have in stock the goods wanted, and the plaintiff selected the kind and quality desired from samples. The defendant agreed to have the goods at his store within two weeks, at which time the plaintiff was to call for them; if they were ready before that time the defendant agreed to notify him. With- in the stipulated time the defendant got the goods into his store, set them apart by themselves, and marked them with the plaintiff's name. The goods, together with the store, were destroyed by fire November 21, 1879, the plaintiff not having called for them. The court ordered judgment for the defendant, and the plaintiff excepted. Carpenter, J. The property in the goods did not pass to the plaintiff by virtue of the contract, for they were not then ascertained, and may not have been in existence. The agreement on the part of the defendant was executory. He agreed to furnish goods correspond- ing to the samples selected by the plaintiff. If the goods, subsequently procured and set apart by the defendant, did not conform to the samples, the plaintiff had a right to reject them. It does not appear SUBSEQUENT APPKOPKIATION H7 that he waived that right. The defendant was not concluded by his selection ; he might have sold or otherwise disposed of the particular articles set apart by him, and substituted others in their place. A contract of sale is not complete until the specific goods upon which it is to operate are agreed upon. Until that is done the contract is not a sale, but an agreement to sell goods of a particular description. It is performed on the part of the vendor by furnishing goods which answer the description. If, as in the case of a sale by sample, the specific goods are not ascertained by the agreement, the property does not pass until an appropriation of specific goods to the contract is made with the assent of both parties. Bog Lead Alining Co. v. Mon- tague, 10 C. B. N. S. 489; Jenner v. Smith, L. R. 4 C. P. 270; Heil- butt v. Hickson, L. R. 7 C. P. 438; Merchants' N. Bank v. Bangs, 102 Mass. 291; Black, Sales, 122, 127; Benj. Sales, s. 358. If the plaintiff authorized the defendant to make the selection, the property immediately on the selection vested in the plaintiff. Aldridge v. John- son, 7 E. & B. 885. It not appearing that the plaintiff gave such au- thority, the goods at the time of the fire were the property of the de- fendant, and their destruction was his loss. By the terms of the contract the defendant was to have the goods at his store within two weeks, at the end of which time, or sooner if notified that they were ready, the plaintiff was to call for them, and the defendant was to deliver them. Within the stipulated time the defendant procured the goods and had them ready for delivery. This was all the agreement required him to do, and all that he could do until the plaintiff came for them. The plaintiff's call being a condition precedent to the defendant's obligation to deliver, must be shown in order to entitle the plaintiff to treat the contract as rescinded and re- cover back the purchase-money. It may be that the trial before the referee proceeded upon the mis- taken theory that the rights of the parties were concluded by the de- struction by fire of the particular goods selected by the defendant, and that the only question was upon whom the loss of those goods should fall. The plaintiff did not call for the goods before the fire; but whether he did after the fire does not appear, and may have been con- sidered immaterial. The rights of the parties under the agreement were not affected by the destruction of the goods. If they were set apart without authority from the plaintiff, he still had the right to call for the goods he bargained for, and the defendant was bound to deliver them, ( Fpon the defendant's m gleel or refusal to deliver them upon reque I as well after as b fore the fire, the plaintiff mighl at his election rescind the contract and recover the purchase-money, or affirm it and recover for the breach. Drew v. Claggett, 39 X. M. 431; Weeks v. Robie, 42 X. 11. 316; Swazey v. Company, 48 X. II. 200. The case may In- recommitted to the referee, if the plaintiff desii it, for the purpo e of showing a call for the goods after the fire. If 118 EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC recommitted, it will be open to the defendant to show that he was authorized by the plaintiff to select the goods. As the case stands the exceptions are overruled. Exceptions overruled. 2. Appropriation by Act of Seller SMITH v. EDWARDS. (Supreme Judicial Court of Massachusetts, 1892. 156 Mass. 221, 30 N. E. 1017.) Action by Frank W. Smith and James E. Stoughton, copartners do- ing business under the style of "Smith & Stoughton," of Abington, Mass., against John Edwards and Frank Edwards, copartners doing business under the style of "Edwards & Son," of Findlay, Ohio. From a judgment for plaintiffs, holding certain goods and chattels of the principal defendants in the possession of the Old Colony Railroad Company, as trustees, the latter excepts. Holmes, J. This case comes before us on the exception of the Old Colony Railroad Company to a ruling of the court below that it should be charged as trustee of the defendants. The defendants have been defaulted. The bill of exceptions purports to state the evidence introduced on the motion to charge the trustee, but does not disclose the, findings of the judge. We assume them to have been the most favorable for the ruling which the bill of exceptions warrants. The defendants in Ohio ordered of the plaintiffs, who are manufacturers of boots and shoes in Massachusetts, through the plaintiffs' traveling- salesman, certain calf and buff shoes, to be made according to a sample shown to the defendants. It was assumed at the argument, and we assume, that the contract bound the defendants, that there is no ques- tion under the statute of frauds, and that the shoes were made accord- ing to sample. They were forwarded over the Old Colony Railroad, we must assume, if it be material, at the defendants' expense, and were delivered to the defendants. This mode of forwarding un- doubtedly was authorized by the contract. The defendants accepted the buff shoes, but refused to accept the calf shoes, and shipped the latter back to the plaintiffs by the same railroad. The plaintiffs re- fused to accept them, sued the defendants for the price of the shoes, and trusteed the railroad company. The calf shoes mentioned are the goods for which the railroad company was charged. It is argued for the trustees that, although the defendants were guilty of a breach of contract in refusing to accept the calf shoes, yet, as the shoes were not in existence at the date of the contract, they did not become the defendants' property until tendered to and accepted by the defendants, after they were made. SUBSEQUENT APPROPRIATION HO Of course, the title to the shoes could not be vested in the defend- ants without their consent. But, in the present state of the law, it does not need argument to show that a contract can be made in such a way as subsequently to pass the title, as between the parties, to goods' unascertained at the time when the contract is made, without a subsequent acceptance by the buyer, if the contract commits the buyer in advance to the acceptance of goods determined by other marks. Blanchard v. Cooke, 144 Mass. 207, 227, 11 N. E. 83; Goddard v. Binney, 115 Mass. 450. 15 Am. Rep. 112; Rodman v. Guilford, 112 Mass.'405. 407; Brewer v. Railroad Co., 104 Mass. 593, 595; Nichols v. Morse, 100 Mass. 523 ; Middlesex Co. v. Osgood, 4 Gray, 447, 449 ; Aldridge v. Johnson, 7 El. & Bl. 885, 899. In the case of goods to be manufactured, the seller, as he has to tender them generally, has the right to appropriate goods to the con- tract, so far that, if he tenders goods conformable to it, the buyer's refusal to accept them is a breach. The buyer cannot say that he would have accepted some other goods had they been tendered. When goods are to be manufactured and forwarded by a carrier to a buyer at a distance, the seller's delivery of such goods to the carrier, as bailee for the purchaser, passes the title. The seller cannot forward them until they are specified. The delivery is an overt dealing with the goods as those to which the contract applies, and puts them into a possession adverse to the seller. Although not strictly a delivery, it is an act having the legal effect of a true delivery, which, in common legal language, it is said to be. Hallgarten v. Oldham, 135 Mass. 1. 9, 46 Am. Rep. 433; Orcutt v. Nelson, 1 Gray, 536, 543; Merchant v. Chapman, 4 Allen. 362. 364; Kline v. Baker, 99 Mass. 253, 254. The act is required of the seller by the terms of the contract, and thus is assented to in advance by the buyer, on the condition that, as sup- posed, the goods answer the requirements of the contract. Therefore it is a binding appropriation of the goods to the contract, and passes the title, as we have -aid. Putnam v. Tillotson, 13 Mete. (Mass.) 317, rchant v. Chapman, -1 Allen. 362, 364; < )dell v. Railroad Co., 109 Mass. 50; Wigton v. Bowley, 130 Mass. 252, 254; Bragano v. Long, 4 Barn. & C. 219; Wait v. Baker, 2 Exch. 1, 7. The present case could be disposed of upon a narrower -round. It would be enough to -a\ that, so far as we can see, the judge who h< ,]],. motion to charge the trustee was warranted in finding as a tact that the defendants authorized the plaintiffs to appropriate the shoes to the contract, even if the inference was nol necessary as matter o\ law. The question always is what intent the parties have expn cither in terms or by rea onable implication. Anderson v. Morice, I.. k. l \pp. Cas. 713; Navigation Co. v. De Main-. .^2 Law J. Q. B. !2, 328, 33 Raw f. Q. B. 21 I Exc< ptions overruled. 1-0 EFFECT IN PASSING PROrERTY GOODS NOT SPECIFIC BRIGHAM v. HIBBARD. (Supreme Court of Oregon, 1S96. 28 Or. 386, 43 Pac. 383.) Action by John W. Brigham against George L. Hibbard. Judgment for plaintiff. Defendant appeals. Bean, C. J. This is an action brought by a manufacturer of boots and shoes in Boston, Mass., to recover for goods sold and de- livered to the defendant. The defendant admits the delivery of the goods, but denies the sale, claiming that he gave an order for certain goods, to be manufactured and shipped from Boston, to one Wetmore,. — an agent to solicit orders for plaintiff, — for which he was to pay $503, but that the goods sent did not correspond with the order ; that he examined them immediately after their receipt, and, finding that they did not conform to the order, notified Wetmore, who was in Portland at the time, that he would not accept the goods, and that, by an agreement between him and Wetmore, he retained the possession of them, to be sold on plaintiff's account. Judgment of the court be- low was in favor of plaintiff, and defendant appeals. There are nu- merous assignments of error in the record, but, for convenience, they may be grouped under two principal heads : First, error of the court in ruling — both in admitting testimony and instructing the jury — that, if the goods delivered to the defendant were of the kind and quality ordered, plaintiff could recover without proof of an actual acceptance by the defendant ; second, error in refusing to allow defendant to de- tail the entire conversation between him and Wetmore at the time, or soo.n after, the goods were examined. The first assignment of error is based on the contention that, in an action for goods sold and delivered, the plaintiff must not only prove a sale and delivery, but an actual acceptance by the vendee. We do not so understand the law. When it is sought to give validity to a contract void under the statute of frauds, there must not only be a delivery, but an actual receipt and acceptance of the goods by the buyer. Caulkins v. Hellman, 47 N. Y. 449, 7 Am. Rep. 461 ; Remick v. Sandford, 120 Mass. 309. But, where the contract itself is valid, a delivery, pursuant to its terms, at the place and in the manner agreed upon, if the goods conform to the contract, will sustain an action for goods sold and delivered, without any formal acceptance by the buyer. Schneider v. Railroad Co., 20 Or. 172, 25 Pac. 391 ; Ozark Lumber Co. v. Chicago Lumber Co., 51 Mo. App. 555; Nichols v. Morse, 100 Mass. 523; Kelsea v. Manufacturing Co., 55 N. J. Law, 320, 26 Atl. 907, 22 L. R. A. 415; Diversy v. Kellogg, 44 111. 114, 92 Am. Dec. 154; Krulder v. Ellison, 47 N. Y. 36, 7 Am. Rep. 402; Pacific Iron Works v. Long Island R. Co., 62 N. Y. 272; Benj, Sales (6th Ed.) §§ 699, 765; Tied. Sales, § 112. The buyer has a reasonable time after the delivery in which to examine the goods, and, if they are not of a kind and quality ordered, he may then refuse to accept them, SUBSEQUENT APPROPRIATION 121 and thereby rescind the contract; but this right does not prevent the title from passing, nor a recovery by the seller in an action for goods sold and delivered, if in fact they do conform to the terms of the con- tract. Tied. Sales, § 112. The next assignment of error is not well taken, because it does not appear that Wetmore had authority to cancel the contract between plaintiff and defendant, or substitute a new one, or to bind the plain- tiff by any agreement in reference to the future disposition of the goods. He was a traveling agent and solicitor of orders for his prin- cipal, but such authority did not give him power to rescind or change the contract after the receipt of the goods by defendant. Diversy v. Kellogg, 44 111. 114, 92 Am. Dec. 154; Stilwell v. Insurance Co., 72 N. Y. 385. In this connection the defendant was permitted to give evidence tending to show that the goods did not conform to the sam- ples, and were not of the kind and quality ordered, and that immediate- ly after their receipt he notified Wetmore of that fact, and refused to accept the goods, and the court held, and so instructed the jury, that if the goods were not of the kind and quality ordered, and immediately after the discovery of that fact the defendant tendered them back to Wetmore, and gave him notice that they were subject to plaintiff's order, such facts would be a sufficient rescission of the contract, and prevent a recovery in this action, and this was as favorable to the de- fendant as he could reasonably expect, under the showing as to Wet- more*s authority to bind the plaintiff. The notice to Wetmore" by de- fendant that he declined to accept the goods because they did not con- form to the order was perhaps material, as part of the res gestae, and as an act on his part explaining and qualifying his conduct in allow- ing the goods to remain in his store. Caulkins v. Hellman, 47 N. Y. 449, 7 Am. Rep. 461. But it was not within the scope of Wetmore's agency to make a new contract for the plaintiff in reference to such goods. Finding no error in the record, the judgment of the court below must be affirmed. NEW ENGLAND DRESSED MEAT & WOOL CO. v. STAND- ARD WORSTED CO. (Supreme Judicial Court of Massachusetts, is'."">. 165 Mass. 828, 48 X. EL 112, 52 Am. St. Rep. .",k;.) Anion by the New England Dressed Meat & Wool Company against the Standard Worsted Company. Judgment for plaintiff, and defend- ant excepts. KnowlTON, J.* The plaintiff seeks to recover only upon the first and third counts of the amended declaration, which set forth a claim * Tart of tin- opinion is omitted. 122 EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC for the price of goods sold. As the case was submitted to the jury, a verdict could not be rendered for the plaintiff unless it was proved that the title passed to the defendant. The contract of sale covered certain specific property, namely, the fine combed wool which the plaintiff had on hand when the contract was made, and also such fine combed wool as the plaintiff should manufacture within the next 30 days ; the whole to be paid for at 40 cents per pound. The present action concerns only a part of the wool subsequently manufactured, and the principal question in the case is whether the title passed be- fore the action was brought. What was necessary to give the contract effect upon the wool to be produced so as to change the ownership from the plaintiff to the de- fendant? The plaintiff was a manufacturer of wool, and it is clear that of the quantity of wool of different kinds in its possession none would pass to the defendant until something occurred to designate it as that covered by the contract. The parties contemplated, as their contract shows, that the plaintiff, who was to manufacture the wool, should, in connection with the work of manufacturing it, separate it from the mass of wool then in its possession, and determine its weight, so that it would appear to be the property called for by the contract ; and its price would be ascertained. A learned writer states the law to be as follows: "In a sale of a portion of a larger mass, the whole remaining in the possession of the vendor, with a right and power in him to make a separation, both upon principle and the weight of au- thority no title passes until that is done, so as to enable the vendor to recover the price, even for goods 'bargained and sold.' " Benj. Sales (6th Am. Ed.) 308. This doctrine is well established in Massachusetts, and, while the decisions are not uniform, it is a rule which prevails generally in this country as well as in England. Scudder v. Worster, 11 Cnsh. 573; Weld v. Cutler, 2 Gray, 195; Middlesex Co. v. Osgood, 4 Gray, 447; Ropes v. Lane, 9 Allen, 502; Keeler v. Goodwin, 111 Mass. 490; Morse v. Sherman, 106 Mass. 430-432; Nichols v. Morse, 100 Mass. 523; Turner v. Langdon, 112 Mass. 265; The Elgee Cot- ton Cases, 22 Wall. 180-187, 22 L. Ed. 863; Hatch v. Oil Co., 100 U. S. 124-134, 25 L. Ed. 554; Morrison v. Dingley, 63 Me. 553; Bailey v. Smith, 43 N. H. 141; Haldeman v. Duncan, 51 Pa. 66; Hahn v. Fredericks, 30 Mich. 223, 18 Am. Rep. 119; Woods v. McGee, 7 Ohio, 127, pt. 2, 30 Am. Dec. 220; Browning v. Hamilton, 42 Ala. 484; Bank v. Gillette, 90 Ind. 268, 46 Am. Rep. 222; Fergu- son v. Bank, 14 Bush (Ky.) 555; Baldwin v. McKay, 41 Miss. 358; Upham v. Dodd, 24 Ark. 545; Courtright v. Leonard, 11 Iowa, 32; McLaughlin v. Piatti, 27 Cal. 452-463. We think that this rule is applicable to the present case. The reg- ular process of manufacture which was necessary to bring the prop- erty within the contract would leave it a part of the larger mass in the possession of the plaintiff. According to the uncontradicted tes- timony, as the wool was manufactured it was conducted into bins by SUBSEQUENT APPROPRIATION 1-3 a spout, and in the absence of some special action, taken for the pur- pose, there would be nothing to distinguish the wool made on one day from that made on the next day. The defendant requested the judge to instruct the jury as follows: "In order to recover on either the first, second, or third counts of its amended declaration the plaintiff must prove exactly 5,014 pounds of F. C. wool was separated into a body by itself, not mixed with or a part of any greater quantity of wool of a different grade, or with a greater quantity of F. C. wool, at the time the defendant was entitled to receive the wool the subject of the contract. In other words, the plaintiff, under the first three counts of the amended declaration, must show that the title to 5,014 pounds of F. C. wool passed to the defendant, and the title could not so pass until and unless that exact quantity of F. C. wool was made a distinct and separate portion by itself." The judge adopted this instruction, and said he would give it, omitting the words "exactly" and "exact." The instruction was not given in the words in which it was written, and the defendant contends that, considering the whole charge to- gether, it was not given in substance or according to its meaning. We do not deem it necessary to determine the correctness of this contention. The defendant concedes that some parts of the charge correctly stated its position. The fair interpretation of the request is "that the wool subject to the contract"— that is, the identical wool manufactured during the 30 days— must have been separated from the other wool of the plaintiff, so that it could be identified, in order to entitle the plaintiff to recover. We think the presiding justice intended to present 'to the jury the question raised by this request, and we also think that there was no evidence in the case to warrant a finding for the plaintiff upon it. As we understand the testimony, which is re- ported in full in the bill of exceptions, the plaintiff, in manufacturing the wool, weighed it as it went into the bins, so that the weight of the product of each day was known. The wool produced within the 30 days was weighed in the ordinary course of manufacture, and in that way the plaintiff knows how many pounds are covered by the tract. When the plaintiff undertook to deliver or to set apart \<>v the defendanl the balance of the wool covered by the contract remain- ing after the previous delivery, it shipped 6,223 pounds instead of ; 1 pound . the balance of the amount which was produced within the 30 days. The defendant was not hound to take any wool except ■ manufactured within the 30 days, and, unless the plaintiff, wl duty it was to separate thai from its other property, separated it so thai it could be identified, the title to it never passed. We find no eni from any witm indicating that it wa i eparated. A.p parently nothing was 'lone under the contracl to determine wh.it ■■ belonged to tl ndant. T the weights as the wool was man- ufactured e Wolf v. Gardner, I ' Cush. 19, :'' \m. Dec. 165; Forbes v. Railroad Co., 133 Mass. 154, 156; Kidder, L06 X. Y. 37, 1-' N. E. SIX. Moors gol this title by indor ement, and had a similar title originally, under the Morton, Rosi & Co. bills of lading. His indorsement of the bills of lading the Boston firm as his agents did not n thi title. It was not a i ance in form, and being made only for the purpose of enabling him to gel the g From the carrier . ii was nol a conveyance in substance or ( See Mooi Kidder, ubi supra; Pratt v. Park man, 24 Pick. \2 t 17; U™ v. De Wolf, 8 Pick. L01, 107. 12S EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC Neither did Moors lose his rights by giving the custody of the hides to the Shaws. They expressly agreed to hold as Moors' agents, and the general rule is perfectly well settled that the custody of a servant or of a mere agent to hold, is the possession of the master or principal. The only difficulties that have arisen have been due to the failure to distinguish accurately between such servants or agents and bailees who hold in their own name. Hallgarten v. Oldham, 135 Mass. 1, 9, 46 Am. Rep. 433. Or, in the case of pledges, between a delivery to the pledgor, for his own purposes, and intrusting him with the cus- tody on behalf of the pledgee. Kellogg v. Thompson, 142 Mass. 76, 79, 6 N. E. 860. It might be argued that policy requires an exception to be made in favor of a bona fide purchaser for value from the gen- eral owner having the seeming possession of the goods as against a person whose security depended upon possession, and who had made the owner his custodian. But the Massachusetts cases tend to show that there is no such exception, in the absence of fraud. Kellogg v. Thompson, Moors v. Kidder, ubi supra; Thacher v. Moors, 134 Mass. 156, 165. At all events, there is nothing in the case to warrant our making one, even assuming that all parties before us are not concluded by the express agreement of the Shaws that the plaintiff's rights should remain. There is nothing in Wyman's position, as to proceeds in his hands, to diminish the rights which Moors had as against the Shaws ; nor do his counsel argue that there is, so far as the question of pos- session is concerned. The plaintiff has charged a commission of 5 per cent, on the hides sold by him, of which rather more than nine-tenths in value were im- ported under the Morton, Rose & Co. credit, the rest under that of the Bank of Montreal. The defendants deny his right to sell at pri- vate sale, and more particularly deny his right to charge any commis- sion. We see no reason to doubt that the sale was lawful, and we are of opinion that the plaintiff should be allowed the sum which the mas- ter has found to be a reasonable compensation for the services, actu- ally rendered by him, viz., two and one-half per cent, upon the gross sales, or $5,080.65. The argument is strong that the loan account agreement, authorizing the plaintiff to apply all security to any indebt- ness, imports an application in the manner and with the incidents there set forth, one of which was a charge of 21^ per cent, commission. All of the facts tend to the conclusion that a commission was to be charged. See, further, Varnum v. Meserve, 8 Allen, 158, 161. It is admitted that there was due to the plaintiff on April 1, 1886, the sum of $61,448.87 as found by the master. Adding the commis- sion, the amount is $66,529.52. By the master's findings, the defend- ant Wyman had in his hands, on the same date, $89,533.34 proceeds of the plaintiff's security, or more than enough to pay what remains due, unless Wyman has a right to make certain charges which have been disallowed by the master. The first of these is a charge of 5 per cent, commission for sales made by Wyman. The master found RESERVATION OF RIGHT OF POSSESSION OR PROPERTY 129 no agreement to that effect with the plaintiff, and rightly disallowed the charge. There is no reason why a debtor selling his own prop- erty to pay his debt should charge his creditor for doing so, and there is no reason why Wyman, in this respect, should stand in a better position than the Shaws. So far as the sales were made by agreement, the agreement excluded the right to make a charge. It is at least a fair inference that he made the other sales, if rightful, on the same footing. Mr. Wyman's second charge is for tanning the hides which were on hand at the time of filing the bill, and which were mostly in the process of tanning, and could not be removed without serious injury. The master finds that there was no agreement or understanding between the plaintiff and Wyman that the latter should make any charge to the plaintiff for tanning. One item of $43,29S.64 was charged for leather which Wyman agreed to deliver to purchasers, as Moors' agent, and the proceeds of which in money he further agreed to de- liver to Moors as soon as received, his contract expressly stating that Moors was not to be chargeable with any expenses incurred thereon. It will be seen that this agreement follows the form of the original contract of the Boston firm as to letter of credit hides, with such charge only as was required by the fact that Wyman received the purchase money for the leather in the first place. We think that the master was plainly right is disallowing this charge. The only remaining item is $36,710.43, being the difference between four cents a pound allowed by the master, and seven cents, the actual cost of tanning. Of this sum, according to the statement of Wyman's counsel, $13,972.89 was for tanning loan account hides, for which the Yanceboro firm agreed that the cost to Moors should not be more than four cents. In the absence of agreement to the contrary, the master was warranted in finding that as to these hides at least Wyman proceeded on the terms of the contract, and could not charge more than four cents, if entitled to charge anything. There was nothing to preclude such a finding in the fact that Moors took possession of the bill of lading hides arriving after the failure, lie had a right to 50, and, if he bad not had, we could not say, as matter of law or fact, that his doing so imported a repudiation of the distinct contract relations as to tin- loan account hides in the tannery. There is left, then, only $22,737.54 in dispute, which might be de- ducted from the amount in Wyman':, hinds and yet leave enough to pay the plaintiff. As to this sum we think that the allowance of four sufficiently favorable to the defendants, and, if it were neces- . further, in order to secure the plaintiff's rights, we should e Some difficulty in finding a warrant for making any allowance at all. The hid' hill of lading hides, which by the original agi nient were to he manufactured into leather without any < e to Ors or the hank. Such hill of lading hide, as Wyman did make Com i -, < i -9 130 EFFECT IN PASSING PROPERTY — GOODS NOT SPECIFIC an agreement about he undertook to deal with in the same way. On these facts alone the argument against his right to charge is strong. But, further, bearing in mind that these hides were to be tanned and held by the Boston firm, and that the Vanceboro firm had nothing to do with them, if that fact be material, it is to be observed that alien the holder of the equity of redemption in property, or of a kin- dred interest, makes improvements upon it necessary to preserve it from destruction or great loss, he may be presumed to make such improvements in the interest of the equity, for the purpose of at least diminishing the claim upon his general funds not pledged, and, if pos- sible, of obtaining a surplus. Undoubtedly it was for the interest of the creditors of the Boston firm that the hides should be tanned, rather than be spoiled. The principle is the converse of that which allows a mortgagee to charge for reasonable improvements. Merriam v. Goss, 139 Mass. 77, 82, 28 N. E. 449. There are obvious objections to allowing the holder of the equity to create a lien superior to an existing mortgage. Even if the Vanceboro firm were concerned, it would not necessarily change our opinion upon the matter, in view of the circumstances of this case. Decree accord- ingly. FRAUD AND RETENTION OF POSSESSION 131 FRAUD AND RETENTION OF POSSESSION I. Contract or Sale Induced by Fraud x ADAM, MELDRUM & ANDERSON CO. v. STEWART. (Supreme Court of Indiana, 1901. 157 I ml. GTS, Gl N. E. 1002, fciT Am. St. Rep. 240.) See post, p. 136, for a report of the case. CUNDY v. LINDSAY. (ITouse of Lords, 1S7S. L. R. 3 App. Cas. 459.) See post, p. 139, for a report of the case. II. Remedies of Defrauded Party 2 1. Bona Fide Purchasers from Fraudulent Buyer SCHLOSS v. FELTUS. (Supreme Court of Michigan, 1S95. 103 .Mich. 525, 01 N. W. 797, ,°.G L. R. A. 161.) On rehearing. For original opinion, see 55 N. W. 1010, 96 Mich. 619, 36 L. R. A. 161. McGrath, C. J. 3 Upon rehearing, after the fullest consideration, we find no reason to change the former opinion. 96 Mich. 619, 55 X. \V. 1010, 50 I,, k. A. I'll. The principal question in the case is whether a naked, pn i isting debt is such a consideration or pay- ment for the transfer Of a stock of goods as will defeat replevin by the original vendor, win. sets up fraud in the purchase from him. The rule, as laid down in 10 Am. & Eng. Enc. Law, x.^7, is that a pre tin-- debt is not such a consideration as will sustain tin- plea of "bona tide purchaser for value," excepl in the case "i negotiable paper. The < ited will be found to fully support the text. Oth- ascs will be found collected in Tied. Sales, $ 329; Mil. Sales, p. i For f the mon . and without notice of tin- fraud, has extended the time of paymenl of his debt, or assumed any new or additional obligation, hrisl v. G I Ind. 576, 30 Am. Rep. 250; Investment Co. v. Harris, II.-' tnd. 226, 238, 40 X. E. 1072, 41 \. E. -151: Rool v. Frei h, 13 Wend. (N. Y.i 570, 28 \m. I' irs v. Waples, 3 Houst. (Del.) 581; Shufeldl v. Pease, 16 V\ i 659; Dock Co. v. j . Cobb. .. Repl. , 415; Tied. Sales, § 327. 138 FRAUD AND RETENTION OF POSSESSION The facts of the case are that in consideration of the mortgage Mrs. Stewart accepted a renewal of her note, and extended the time of payment of her deht; Eisenhauer accepted a note, and extended the time of payment of his past-due account; Brcen accepted a note for $500, payable in bank one day after date, $250 of which was for a past-due account, and $250 for legal services then contracted for, to be then and thereafter rendered. These persons, having no notice of Stewart's fraud in the purchase of the goods, if there was any, and having all surrendered the right to sue their debtor for a definite period, and Breen having assumed a new obligation, must be classed as innocent purchasers for value, within the rule above stated. The fact that the mortgage to the First National Bank of Huntington rested solely upon a pre-existing debt cannot affect the decision of the case. Schuckman's possession of the property as the trustee of Mrs. Stewart, Eisenhauer, and Breen is rightful, and replevin will not lie against one legally in possession, in favor of one who has no superior right. The judgment of the circuit court is right for another reason : It is a familiar rule that a contract induced by fraud is not void, but voidable only, at the option of the party defrauded. It rests solely with the defrauded party to say whether or not the contract shall stand, and until repudiated by him it is valid. He may abide the contract and seek redress in damages, or, if he acts within a reason- able time after discovery of the fraud, he may rescind the contract and reclaim his property. But if he elects to rescind there must be a complete restoration of everything of value the party defrauded has received under the contract. He will not be permitted to undo the contract, while retaining the money or other valuable thing de- livered him under its terms. Thompson v. Peck, 115 Ind. 512, 18 N. E. 16, 1 L. R. A. 201 ; Haase v. Mitchell, 58 Ind. 213 ; Balue v. Taylor, 136 Ind. 368, 36 N. E. 269; Tiff. Sales, p. 119; Tied. Sales, § 163. It is shown by the record that Stewart testified that on No- vember 15, 1897, 11 days before the execution of the mortgage to Schuckman, trustee, and 9 months after the first purchase of goods subsequent to the January 7, 1897, statement of assets and liabilities, complained of, he paid appellant on the goods sued for $257. It does not appear that the testimony was denied by appellant, and it must be accepted as true. The sum thus paid was not returned or tendered to appellees before the commencement of this suit, which of itself is fatal to appellant's right of recovery. The propositions arising upon the admission and rejection of tes- timony relate exclusively to the question of Stewart's fraud, which we have found unnecessary to consider. Judgment affirmed. eemedies of defrauded paety 139 2. Fraudulent Impersonation CUNDY v. LINDSAY. (House of Lords, 18TS. L. It. 3 App. Cas. 459.) In 1873, one Alfred Blenkarn hired a room at a corner house in Wood street, Cheapside. It had two side windows opening into Wood street, but, though the entrance was from Little Love Lane, it was by him constantly described as 37 Wood street, Cheapside. Hi- agreement for this room was signed "Alfred Blenkarn." The now respondents, .Messrs. Lindsay & Co., were linen manufacturers, carry- ing on business at Belfast. In the latter part of 1873, Blenkarn wrote to the plaintiffs on the subject of a purchase from them of goods of their manufacture— chietly cambric handkerchiefs. His letters were written as from ''Z7 Wood street, Cheapside," where he pretended to have a warehouse, hut in fact occupied only a room on the top floor, and that room, though looking into Wood street on one side. could only be reached from the entrance in 5 Little Love Lane. The name signed to these letters was always signed without any initial as representing a Christian name, and was, besides, so written as to appear "Blenkiron & Co." There was a highly respectable firm of W. Blenkiron & Son, carrying on business in Wood street, but at num- ber 123 Wood street, and not at 37. Messrs. Lindsay, who knew the respectability of Blenkiron & Son, though not the number of the house where they carried on business, answered the letters, and sent the goods addressed to "Messrs. Blenkiron & Co., 37 Wood Street. Cheapside," where they were taken in at once. The invoices sent with the goods were always addressed in the same way. Blenkarn sold the »ds thus fraudulently obtained from Messrs. Lindsay to different . and among the rest lie sold 250 dozen of cambric handker- chiefs to the Messrs. Cundy, who were bona fide purchasers, and who resold them in the ordinary way of their trade. Payment not being made, an action was commenced in the mayor's court of London by . Lindsay, the junior partner of which firm, Mr. Thompson, made the ordinary affidavit of debt, as against Alfred Blenkarn, and therein named Alfred Blenkarn a. the debtor. Blenkarn's fraud was ed, and he was prosecuted at the Central criminal court, and convicted and ed. M, L,ind . then broughl an action against Messrs. Cundy as for unlawful conver ion of the handkerchiefs. The cause was tried before Mr. Ju tice Blackburn, who left it to the jury to consider whether Alfred Blenkarn, with a fraudulent intent to induce the plain tiffs to give him the credil belong ■ ood character of Blenk- iron & Co., wrote the letters, and by fraud induced the plaintiffs to 7 Wood -trect —were they the -anie g 1 as those 140 FRAUD AND RETENTION OF POSSESSION bought by the defendants — and did the plaintiffs by the affidavit of debt intend, as a matter" of fact, to adopt Alfred Blenkarn as their debtor. The first and second questions were answered in the affirm- ative, and the third in the negative. A verdict was taken for the defendants, with leave reserved to move to enter the verdict for the plaintiffs. On motion accordingly, the court, after argument, ordered the rule for entering judgment for the plaintiffs to be discharged, and directed judgment to he entered for the defendants. 1 Q. B. Div. 348. On appeal this decision was reversed, and judgment ordered to be entered for the plaintiffs, Messrs. Lindsay. 2 Q. B. Div. 96. This appeal was then brought. Cairns, L. Ch. My lords, you have in this case to discharge a. duty which is always a disagreeable one for any court, namely, to determine as between two parties, both of whom are perfectly inno- cent, upon which of the two the consequences of a fraud practised upon both of them must fall. My lords, in discharging that duty your lordships can do no more than apply rigorously the settled and well-known rules of law. Now, with regard to the title to personal property, the settled and well-known rules of law may, I take it, be- thus expressed: By the law of our country the purchaser of a chat- tel takes the chattel, as a general rule, subject to what may turn out to be certain infirmities in the title. If he purchases the chattel in market overt, he obtains a title which is good against all the world; but if he does not purchase the chattel in market overt, and if it turns out that the chattel has been found by the person who professed to sell it, the purchaser will not obtain a title good as against the real owner. If it turns out that the chattel has been stolen by the person who has professed to sell it, the purchaser will not obtain a title. If it turns out that the chattel has come into the hands of the person who professed to sell it, by a de facto contract, that is to say, a contract which has purported to pass the property to him from the owner of the property, there the purchaser will obtain a good title, even al- though afterwards it should appear that there were circumstances connected with that contract which would enable the original owner of the goods to reduce it, and to set it aside, because these circum- sta'nees so enabling the original owner of the goods or of the .chattel to reduce the contract and to set it aside, will not be allowed to in- terfere with a title for valuable consideration obtained by some third party during the interval while the contract remained unreduced. My lords, the question, therefore, in the present case, as your lord- ships will observe, really becomes the very short and simple one which I am about to state. Was there any contract which, with regard to the goods in question in this case, had passed the property in the goods from the Messrs. Lindsay to Alfred Blenkarn? If there was any con- tract passing that property, even although, as I have said, that con- tract might afterwards be open to a process of reduction, upon the REMEDIES OF DEFRAUDED PARTY 141 ground of fraud, still, in the meantime, Blenkarn might have conveyed a good title for valuable consideration to the present appellants. Now, my lords, there are nvo observations bearing upon the solu- tion of that question which I desire to make. In the hist place, if the property in the goods in question passed, it could only pass by way of contract. There is nothing else which could have passed the property. The second observation is this : Your lordships are not here embar- rassed by any conflict of evidence, or any evidence whatever as to con- versations or as to acts done; the whole history of the whole trans- action lies upon paper. The principal parties concerned, the respond- ents and Blenkarn, never came in contact personally ; everything that was done was done by writing. What has to be judged of, and what the jury in the present case had to judge of was merely the conclu- sion to be derived from that writing, as applied to the admitted facts of the case. Now, my lords, discharging that duty and answering that inquiry, what the jurors have found is, in substance, this: It is not necessary to spell out the words, because the substance of it is beyond all doubt. They have found that by the form of the signatures to the letters which were written by Blenkarn, by the mode in which his letters and his applications to the respondents were made out, and by the way in which he left uncorrected the mode and form in which, in turn, he was addressed by the respondents; that by all those means he led, and intended to lead, the respondents to believe, and they did believe, that the person with whom they were communicating was not Blenk- arn, the dishonest and irresponsible man, but was a well known and solvent house of Blenkiron & Co., doing business in the same street. My lords, those things are found as matters of fact, and they are placed beyond the range of dispute and controversy in the case. If that is so, what is the consequence? It is that Blenkarn — the dishonest man, as I call him — \^re acting here just in the same way if he had forged the signature of Blenkiron & Co., the respectable firm, to the applications for goods, and as if when, in return, the goods were forwarded and letters were sent, accompanying them, he had intercepted the goods and intercepted the letters, and had taken possession of the goods, and of the letters which were addressed to and intended for, not himself, but the firm of Blenkiron & Co. Now, my lords, stating the matter shortly in that way. I ask the question, h<»w is it possible to imagine that in that state of things any contt could have arisen between the respondents and Blenkarn, the i honest man? Of him they knew nothing, and of him il thought. With him they never intended to deal. Their minds nc\ n for an instant of time re ted upon him, and as between him and them there was no o of mind which could lead tO anv agn nient or any contract whatever. As between him and them there was merely the one ide to a contract, where, in order to produce a o tract, two sides would be required. With the firm ol Blenkiron & • 12 FRAUD AND RETENTION OF POSSESSION Co. of course there was no contract, for as to them the matter was entirely unknown, and therefore the pretence of a contract was a failure. • The result, therefore, my lords, is this : that your lordships have not here to deal with one of those cases in which there is de facto a contract made which may afterwards be impeached and set aside on the ground of fraud ; but you have to deal with a case which ranges itself under a completely different chapter of law, the case, namely, in which the contract never comes into existence. My lords, that being so, it is idle to talk o* the property passing. The property remained, as it originally had been, the property of the respondents, and the title which was attempted to be given to the appellants was a title which could not be given to them. My lords, I therefore move your lordships that this appeal be dis- missed with costs, and the judgment of the court of appeal affirmed. Judgment appealed from affirmed, and appeal dismissed, with costs. III. Fraud on Creditors * MARTIN v. MARSHALL. (Supreme Court of Kansas, 1S94. 54 Kan. 147, 37 Pac. 977.) In December, 1888, and early in January, 1889, Edward Pelletier and George Pelletier were engaged in the retail grocery business in Concordia under the firm name and style of Pelletier Bros., and were largely indebted to wholesale and jobbing houses, and much of this indebtedness was past due. They ^fcre being urged by their creditors to pay the demands owing by them. Neither of them owned any property subject to execution, other than this stock of groceries. Early in January, 1889, when pressed by their creditors, Pelletier Bros, made various promises to pay money on their demands, but failed to do so. On January 3, 1889, they made a pretended sale of all their stock of goods to John Martin and Medore Martin, partners as Medore Martin & Co., receiving, as the Pelletiers and Martins state, $200 in cash, a deed to some property in Concordia, which was at the time mortgaged, and a note for $500, then in litigation in the courts of Arkansas. Attachments were levied by some of their cred- itors upon this stock of goods, and judgments were obtained against Pelletier Bros. The goods were sold, and the money received from the sale of the goods applied in part payment of the judgments and costs. On January 22, 1889, this action was brought by Medore Mar- tin & Co. against the sheriff, Edward Marshall, to recover $5,000 ■* For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 58, 59. FRAUD ON CREDITORS 143 damages. The case was tried by court with a jury. The jury re- turned a verdict for the defendant, and judgment was entered there- on. The plaintiffs bring the case here. Hortox, C. J. (after stating the facts). Martin & Co. claim that on the 3d day of January, 1889, they purchased of Pelletier Bros., at Concordia, a stock of groceries, fixtures, etc., for $2,500. Edward Marshall, as sheriff of Cloud county, levied on the property under attachments in his hands from creditors of the Pelletier Bros. The question tried in the court below was as to the validity of the sale claimed to have been made by Pelletier Bros, to the plaintiffs. It ap- pears that on the afternoon of January 3, 1889, there was a pretended sale of the property, evidenced by an agreement in writing signed by the parties. This agreement provided that the Pelletier Bros, were to accept as part payment for the stock of goods, etc., the south half of block 3 in Gaylord & Matthews' addition in the city of Concordia, subject to a mortgage of $800, and a note given by Preston L,. Wil- liams for $400. After an inventory of the goods had been taken the balance due upon the inventory was to be paid in cash. The inventory was completed in the forenoon of January 4, 1889. It shows that the goods', at cost price, were worth about $2,700. The Pelletiers agreed to take $2,500. The lots in Concordia were to be taken by them at the value of $1,800, subject to the mortgage of $800, and the Williams note, with interest, as $500. The balance of $200 was paid in cash. The lots in Concordia were only worth $700 or $800,— not more than the mortgage. The note of $500 was not only clouded with lit- igation, but one of the Pelletier brothers knew that the maker alleged in his defense that it was obtained fraudulently. The Pelletiers, at the time of making a sale of the stock, were heavily indebted to their iitors, who were pressing them for payment, and the evidence clearly shows that the sale was made by them with the fraudulent in- tent to delay and defraud their creditors. Thai good faith is essential to support the sale cannot be questioned. If .Martin & Co. knew of the fraudulent intent of the Pelletiers, and bought with that knowl- je, they cannol claim to he bona fide purchasers. "Knowledge of facts sufficient to excite the suspicions of a prudent man. and put him upon inquiry, is, as a general proposition, equivalent to knowledge of the ultimate fact." Phillips v. Reitz, 16 Kan. 396; Tridm. Sales, ^ 329; Schulein v. Hainer, 48 Kan. 2 1''. 2'' Pac. 171. There is ample lence in the record tending to show that the property turned over to the Pelletiers by Martin & Co. as pari paymenl for the stock of 'i.,! worth one-half the sum for which it was accepted. rt in & ('". did not allow adequate prices For tin- property pur chased, and in view of all the evidence the jury were justified in find ing that they did not ad in good faith. McDonald v. Gaunt, 3" Kan. 693, 2 Pac. 871; Lewis v. Hughes, 49 Kan. 23, . ; 'i Pac. 177. The 144 FRAUD AND RETENTION OF POSSESSION trial court charged the jury sufficiently upon all the material proposi- tions of law involved in the case. Various objections are presented in the briefs concerning the re- ception and rejection of evidence. We have examined all of these questions carefully, but find no material error contained therein. The invoice offered was competent evidence, and ought to have been re- ceived, but witnesses were permitted to describe the goods referred to, and to state the amount of the invoice. Further, it appears that the Pelletier Bros, finally agreed to sell the stock in bulk for $2,500. The invoice, therefore, was not important. It is not necessary to comment upon the other matters referred to in the briefs. The judg- ment of the district court will be affirmed. All the justices concur- ring. IV. How far Delivery is Essential to Transfer Property Against Creditors and Purchasers 6 KIRVEN v. PINCKNEY. (Supreme Court of South Carolina, 1S9G. 47 S. C. 229, 25 S. E. 202.) Action by James N. Kirven against Henry L. Pinckney and another to recover a certain mare. There was a judgment for plaintiff and defendants appeal. Pope, J. 6 * * * It seems that the plaintiff made an agree- ment with one Mr. Henry Tupper, of Charleston, in this state, which was formally embodied in this written agreement, to wit: "October 2d, 1894. This is to certify that J. N. Kirven and Henry Tupper have traded the following mares, Brown Girl and Daisy, J. N. Kirven to give H. Tupper Brown Girl and $25.00 for Daisy. J. N. Kirven to pay freight on both mares. H. Tupper to raise the colt that Brown Girl is with, to the age of six months, and then give said colt to J. N. Kirven; and, if the colt is not sound at that time, H. Tupper is to pay J. N. Kirven $100.00. Brown Girl is by Highland Red out of Worth by Black Chief. Brown Girl is in foal by Melville Chief (2353), due to foal on or about 7th March, 1895. In witness where- of, I have hereunto set my hand and seal, this 4th day of Sept., 1894. Henry Tupper [L. S.]" On the 8th day of October, 1894, this plaintiff shipped, by rail, Brown Girl to the order of Henry Tupper, and advised Tupper to send to him Daisy on the night of the same day. A letter from Tup- per to Kirven, dated 8th October, 1894, admits the receipt from Kir- ven of a telegram to this effect on that same day, and expresses his regret at not being able to ship Daisy on that night, explaining his 5 For discussion of principles, see Tiffany, Sales (2d Ed.) § 60. 6 Part of the opinion is omitted. DELIVERY ESSENTIAL AGAINST CREDITORS AND PURCHASERS 145 inability by reason of the mare being up town, but stating she should be shipped the next day. On the 9th day of October, 1894, when Tupper sent to the railroad authorities for the mare Brown Girl, his messenger returned with the information that she was sick. There- upon he employed a veterinary surgeon (one Mclnness) to do what he could for her, but she died while in the car at Charleston. Mr. Tupper promptly notified Mr. Kirven of his loss, and advised Kirven to bring suit against the railroad for damages. Mr. Kirven, how- ever, sent him a check for the S25, dated 8th October, 1894, and in- sisted that Brown Girl was Mr. Tupper's loss. Mr. Tupper, however, denied this, and returned the check to Mr. Kirven. This describes the attitude of the parties to each other. Mr. Tup- per sold the mare Daisy to the defendant Henry L. Pinckney, Jr. ; and Mr. Pinckney placed her in the keeping of the defendant Manly Boykin. The two last reside in Sumter county, where the mare Daisy is kept, who, by the way, has dropped a colt ; so that now Mr. Kirven brings his suit for claim and delivery against Mr. Pinckney and Mr. Boykin for both the mare Daisy and her colt, but Mr. Tupper is not made a party to this suit. One of the defenses set up by the defendant is that Daisy never became the property of Mr. Kirven; that the agreement between Mr. Kirven and Mr. Tupper was only for an exchange of mares, but was never executed ; and that the only remedy Mr. Kirven had was to sue Tupper for a breach of his contract ; and that Kirven never owned or had a lien on the mare Daisy, and therefore the defendant Pinck- ney had a perfect right to buy her as he did. We cannot regard this as a sale of the mare Daisy to Mr. Kirven. The contract shows that it was to be an exchange of one mare for the other, with $25 as "boot." This exchange was never consummated. If the contract was breached by Tupper, Kirven had his remedy by bringing his action inst Tupper for such breach of his contract. We cannot view this contract as executed by its terms, so that Brown Girl was Tup- per's property, and Daisy was the property of Kirven. Each had to deliver his mare to the other, respectively, before the rights of third parties could he affected. Whatever remed) Mr. Kirven has is against Mr. Tupper. The defendant, by his second request to charge, made this point; and the circuit judge refused to so charge. This was >r. The < ] nt, on the same ground, sought a nonsuit. This was refused by the circuit judge, and thereby the circuit judge was in in error. We must therefore reverse the judgment, and direct that the com- plaint he dismissed. It is the judgment of this court that the judg- ment of the circuit n,ur\ he reversed, and the cause he remitted to the circuit court, with directions to that court to dismiss the complaint. Cooley Cases Sat.es — 10 146 FRAUD AND RETENTION OF FOSSESSION PARRY v. LIBBEY. (Supreme Judicial Court of Massachusetts, 189G. 1G6 Mass. 112, 44 N. E. 121.) Action by Parry Bros. & Glidden against Fred C. Libbey. There was a rinding for plaintiffs, and defendant brings exceptions. ■ It appeared that, after the alleged sale of the bricks in suit to plain- tiffs, Sawyer Bros., the vendors, went into insolvency. Their assignee produced the purchase-money note given by plaintiffs, and testified that he expected to realize on it as soon as the litigation was settled. Holmes, J. This is an action for the conversion of certain bricks, and comes before us on the defendant's exceptions. The alleged conversion was a seizure of the bricks under a mortgage purport- ing to cover bricks manufactured subsequently to its date, and the plaintiffs claimed title by delivery to them as bona fide purchasers for value under a bill of sale before the seizure by the defendant. The bricks in question were made after the mortgage. The main questions raised by the exceptions are whether the judge ought to have ruled that there was no delivery of the bricks to the plaintiffs, and also that no consideration was given by them for the bill of sale. The bill of sale was an instrument under seal, and purported to con- vey to the plaintiffs "a certain lot of bricks, being bricks now left in a certain kiln situated in the southerly end of brickshed at South Clin- ton, Massachusetts, containing about two hundred thousand hard bricks, also about one hundred thousand light hard bricks; being piled partly in northern end of said shed, and partly outside of shed." These words, on their face, purport to convey all the bricks in the two distinct piles mentioned, and, there being no denial that the piles were distinct, parol evidence w r as not admissible to cut down their effect. Harper v. Ross, 10 Allen, 332. Testimony was admitted that it was agreed orally at the time of the sale that the vendor should have the right to deliver, out of the bricks, a certain amount, — it seems, about 10,000 or 15,000 bricks, — that he wished to deliver to others. But, apart from the objection just stated, the judge who tried the case was warranted in finding that this amounted to no more than a license to the vendor to take a certain amount from the purchaser's piles in case he should wish to do so thereafter. The goods sold thus being specified, the parties went to the brick- yard, and Mr. Parry says, in terms, that he took possession of them. He counted the bricks, and made arrangements with one of the ven- dors, personally, to ship the bricks as he should send word. Portions of the bricks were shipped from time to time, in pursuance of the ar- rangement. The land where the bricks stood seems to have belonged to a third person, but nothing appears in the evidence which diminishes the effect of the facts stated. On these facts the judge was war- ranted in finding a delivery sufficient to pass the title to all the bricks, as against third persons. Hobbs v. Carr, 127 Mass. 532; Ropes v. DELIVERY ESSENTIAL AGAINST CREDITORS AND PURCHASERS 11" Lane, 9 Allen, 502, 510; Id., 11 Allen, 591; Hardy v. Potter, 10 Gray, 89; Riddle v. Yarnum, 20 Pick. 280. A question of evidence may be disposed of before passing from this subject. The defendant offered to prove that the sellers of the bricks, after the delivery to the plaintiffs, spoke of the bricks as theirs, solicited orders for them, and delivered what they sold. The judge excluded evidence of such words or acts, so far as they were not brought home to the knowledge of the plaintiffs. The argument for the defendant assumes that the vendors were left in possession. If they were not, the evidence was incompetent. Horrigan v. Wright, 4 Allen, 514; Roberts v. Medbery, 132 Mass. 100. Whether the ven- dors were in possession, or not, constituted, for this purpose, one of those preliminary matters of fact which are to be found by the judge who tried the case, and on which his adverse finding is conclusive. Com. v. Bishop, 165 Mass. 148, 152, 42 N. E. 560; Com. v. Brewer, 164 Mass. 577, 42 X. E. 92. A note for $1,000 was given by the plaintiffs in payment for the bricks, on which $300 were paid by the plaintiffs after the seizure by the defendant, and which now is in the hands of the assignee. The money actually paid is part of the entire price. We do not perceive on what ground we should deny the plaintiffs' right to be considered pur- chasers for value. We are not called on to consider how the case would have stood had the assignee undertaken to avoid the sale as a fraud on creditors. The assignee holds the note, and seemingly affirms the sale. The right set up by the defendant was not a right to avoid the sale as a fraud on creditors, but a right to take possession under his mortgage. That right was ended as soon as the delivery was made to Parry. As against the mortgagee the note was a valuable considera- tion. The other exceptions are not argued. Exceptions overruled. 14:8 ILLEGALITY ILLEGALITY I. Sales Prohibited by Common Law * MATERNE v. HORWITZ. (Court of Appeals of New York, 1SS6. 101 N. Y. 469, 5 N. E. 331.) Action to recover damages for breach of contract to accept and re- ceive 400 cases of domestic sardines with "fancy labels" similar to im- ported goods. From a judgment of the general term of the superior court of the city of New York (50 N. Y. Super. Ct. 41), affirming a judgment dismissing the complaint, the plaintiff appeals. Peu Curiam. 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 were tendered to them, and that the plain- tiffs understood that the defendants knew it. It is also inferable that the defendants entered into the agreement, to the knowledge of the plaintiffs, for the purpose of selling the goods to others in the condi- tion in which they were when delivered. It is also evident that the labels were used to deceive the consumers, and not the contractors, and to obtain higher prices for the sardines. The plaintiffs procured and furnished the deceptive labels after binding themselves by con- tract to do so, and this was done for an unlawful purpose, 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 to which both parties were cognizant, and that it was designed by them, under the contract to commit a fraud, and thus promote an illegal pur- pose by deceiving other parties. In such a case the courts will not aid either party in carrying out a fraudulent purpose. Under the Penal Code, § 438, it is made a misdemeanor to sell or offer for sale any package falsely marked, labeled, etc., as to the place where the goods were manufactured, or the quality or grade, etc. The contract in question would seem to be covered by this provision of the Code; but as the Penal Code did not go into effect till May 1, 1882, and this contract was made June 30, 1881, the section cited has, we think, no bearing on the question presented. To carry out this con- tract would be contrary to public policy, and in such a case, as we have seen, the court will not aid either party. i For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 63, 64. SALES PROHIBITED BY COMMON LAW 149 The case was properly disposed of upon the ground first stated, which is fully considered and elaborated, in the opinion of general term, by Sedgwick, J., in which we concur. Judgment should be af- firmed. GRAVES v. JOHNSON. (Supreme Judicial Court of Massachusetts, 1S92. 156 Mass. 211, 30 N. E. 818, 15 L. R. A. 8:J4, 32 Am. St. Rep. 446.) Action by Chester H. Graves and others against Walter B. John- son for the price of liquors sold to defendant by plaintiffs. Judgment for plaintiffs, and defendant excepts. Holmes, J. This is an action for the price of intoxicating liquors. It is found that they were sold and delivered in Massachusetts by the plaintiffs to the defendant, a Maine hotel keeper, with a view to their being resold by the defendant in Maine against the laws of that state. These are all the material facts reported, but these findings we must assume were warranted, as the evidence is not reported, so that no question of the power of Maine to prohibit the sales is open. The only question is whether the facts as stated show a bar to this action. The question is to be decided on principles which we presume would prevail generally in the administration of the common law in this country. Not only should it be decided in the same way in which wc should expect a Maine court to decide upon a Maine contract pre- senting a similar question, but it should be decided as we think that a Maine court ought to decide this very case if the action were bro; there. It is noticeable, and it has been observed by Mr. Pollock, that some of the English cases which have gone furthest in asserting the ht to disregard the revenue laws of a country other than that where contract is made and is to be performed, have had reference to the ■lish revenue laws. Holman v. Johnson, 1 Cowp. 341 ; Poll. Cont. (5th Ed.) 308. See, also, Mclntyre v. Parks, 3 Mete. (Mass.) 20,. The assertion of that right, however, no doubt was in the inten of English commerce, (Pellecat v. Angell, 2 Cromp. M. & R. 311, 313,) an<. ! criticism, (Story, Confl. Law !54, 2?7, note; 3 Kent, Comm. 265, 266; Whart. Confl. Laws. § 484), although there may be a question how far the actual decisions go beyond what would held in the case of an English contrad affecting only I lish laws (see Hi v. Tern] le, 5 Taunt. 181 ; Brown v. Dum Harris v. Runnels, 12 Mow. 79, 83, 84, 13 L. Ed ( if , ,;•.-. it would b< ble for an independent state to enforce all contracts made and to L performed within it withoul regard to • much they might contravene the policy of > ! neighbors' laws. But in fad no tate pur ich a course of barbarous isolation. As a general proposition, it is admitted that an agreement to bi 1<~0 ILLEGALITY the laws of a foreign country would be invalid. Poll. Cont. (5th Ed.) 308. The courts are agreed on the invalidity of a sale when the con- tract contemplates a design on the part of the purchaser to resell con- trary to the laws of a neighboring state, and requires an act on the part of the seller in furtherance of the scheme. Waymell v. Reed, 5 Term R. 599; Gay lord v. Soragen, 32 Vt. 110, 76 Am. Dec. 154; Fisher v. Lord, 63 N. H. 514, 3 Atl. 927; Hull v. Ruggles, 56 N. Y. 424, 429. On the other hand, plainly it would not be enough to prevent a re- covery of the price that the seller had reason to believe that the buyer intended to resell the goods in violation of law. He must have known the intention in fact. Finch v. Mansfield, 97 Mass. 89, 92 ; Adams v. Coulliard, 102 Mass. 167, 173. As in the case of torts, a man has a right to expect lawful conduct from others. In order to charge him with the consequences of the act of an intervening wrongdoer, you must show that he actually contemplated the act. Hayes v. Hyde Park, 153 Mass. 514-516, 27 N. E. 522, 12 L, R. A. 249. Between these two extremes a line is to be drawn. But as the point where it should fall is to be determined by the intimacy of the con- nection between the bargain and the breach of the law in the particular case, the bargain having no general and necessary tendency to induce such a breach, it is not surprising that courts should have drawn the line in slightly different places. It has been thought not enough to invalidate a sale that the seller merely knows that the buyer intends to resell in violation even of the domestic law. Tracy v. Talmage, 14 N. Y. 162, 67 Am. Dec. 132; Hodgson v. Temple, 5 Taunt. 181. So of the law of another state. Mclntyre v. Parks, 3 Mete. (Mass.) 207 ; Sortwell v. Hughes, 1 Curt. 244, Fed. Cas. No. 13,177; Green v. Col- lins, 3 Cliff. 494, Fed. Cas. No. 5,755 ; Hill v. Spear, 50 N. H. 253, 9 Am. Rep. 205. Dater v. Earl, 3 Gray, 482, is a decision on New York law. But there are strong intimations in the later Massachusetts cases that the law on the last point is the other way, (Suit v. Woodhall. 113 Mass. 391, 395; Finch v. Mansfield, 97 Mass. 89, 92;) and the English decisions have gone great lengths in the case of knowledge of intent to break the domestic law, (Pearce v. Brooks, L. R. 1 Exch. 213; Taylor v. Chester, L. R. 4 O. B. 309, 311.) However this may be, it is decided that when a sale of intoxicating liquor in another state has just so much greater proximity to a breach of the Massachusetts law as is implied in the statement that it was made with a view to such a breach, it is void. Webster v. Mlunger, 8 Gray, 584 ; Orcutt v. Nelson, 1 Gray, 536, 541 ; Hubbell v. Flint, 13 Gray, 277, 279; Adams v. Coulliard, 102 Mass. 167, 172, 173. Even in Green v. Collins and Hill v. Spear, the decision in Webster v. Munger seems to be approved. See, also, Langton v. Hughes, 1 Maule & S. 593 ; M'Kinnell v. Robinson, 3 Mees. & W. 434, 441 ; White v. Buss. 3 Cush. 448. If the sale would not have been made SALES PHOHIBITED BY COMMON LAW 153 but for the seller's desire to induce an unlawful sale in Maine, it would be an unlawful sale, on the principles explained in Hayes v. Hyde Park. 153 Mass. 514, 27 X. E. 522, 12 L. R. A. 249, and Tasker- v. Stanley, 153 Mass. 143, 26 X. E. 417. 10 L. R. A. 468. The overt act of selling, which otherwise would be too remote from the appre- hended result, — an unlawful sale by some one else, — would be con- nected with it, and taken out of the protection of the law by the fact that that result was actually intended. We do not understand the judge to have gone so far as we have just supposed. We assume that the sale would have taken place what- ever the buyer had been expected to do with the goods. But we un- derstand the judge to have found that the seller expected and de- sired the buyer to sell unlawfully in Maine, and intended to facilitate his doing so, and that he was known by the buyer to have that intent. The question is whether the sale is saved by the fact that the intent mentioned was not the controlling inducement to it. As the connec- tion between the act in question, the sale here, and the illegal result, the sale in Maine, — its tendency to produce it, — is only through the later action of another man, the degree of connection or tendency may vary by delicate shades. If the buyer knows that the sale is made only for the purpose of facilitating his illegal conduct, the connection is at the strongest. If the sale is made with the desire to help him to his end, although primarily made for money, the seller cannot complain if the illegal consequence is attributed to him. If the buyer knows that the seller, while aware of his intent, is indifferent to it or disap- proves of it, it may be doubtful whether the connection is sufficient. Compare Com. v. Churchill, 136 Mass. 148, 150. It appears to us not unreasonable to draw the line as it was drawn in Webster v. Munger, and to say that when the illegal intent of the buyer is not only known to the seller, but encouraged by the sale as just explained, the sale is void. The accomplice is none the less an accomplice that he is paid for his act. See Com. v. Harrington, 3 Pick. 26. 'Die ground of the decision in Webster v. Munger is that contracts like the present are void. If the contract had been valid, it would have been enforced. Dater v. Earl, 3 Gray, 482. As we have -aid or implied already, no distinction can be admitted based on the fact that the law to he violated in that case was the lex fori. For if such a distinction is ever sound, and again if the same principles are not always tO hi- applied whether the law to he violated is that of the state of the contracl or of another (see Tracy v. Talmage, 11 X. Y. 162, 213, 67 Am. Dee. 132) at least the righl 1" contract with a view to a breach of tin- laws ,,i another state of this Union oughl not to be ized as againsl a statute passed to carry out fundamental about righl ami wrong shared by a large pari of our own citiz (Territtv. Bartlett, 21 \'t. 184, 188,189.) [n the opinion of a majority ..f the court, this ca e is governed by Web ter v. Munger, and we he 152 ILLEGALITY lieve that it would have been decided as we decide it if the action had been brought in Maine instead of here. Banchor v. Mansel, 47 Me. 58. Exceptions sustained. II. Sales Prohibited by Statute KEIXEY v. COSGROVE. (Supreme Court of Iowa, 1S91. S3 Iowa, 229, 4S N. W. 979, 17 L. It. A. 779.) Action of replevin for a horse. The petition shows that the plain- tiffs were the owners of the horse in question, and that on Sunday, the 11th day of August, 1889, they traded or exchanged said horse with defendant for a certain mare, the exchange of possession being made on that day ; that on the next day Thomas Kelley, as the agent of the plaintiffs, tendered back the mare, and demanded a return of the horse, for the reason that the exchange or trade was made on Sunday, and therefore void, which the defendant refused; and that the exchange of horses was not a work of charity or necessity. The answer of the defendant admits that he went to the defendant's place of business on Sunday, and then and there made the exchange of horses referred to in plaintiff's petition, and that said exchange was complete in every respect and particular, plaintiffs taking the mare referred to in the petition, and defendant taking the horse therein re- ferred to ; that said exchange was completed in all respects on the day and date above mentioned. Defendant also admits "that the said trade and transaction was not an act or work of charity or necessity," and that a re-exchange of horses was demanded and refused. Upon this state of the proceedings as to the issue presented the plaintiffs moved the court for judgment in their favor for the possession of the horse and for costs on the ground that the exchange of horses was a Sunday contract, and plaintiffs had tendered back the mare, and de- manded a return of the horse, which was refused. The court over- ruled the motion and the plaintiffs elected to stand therein. The plain- tiffs appealed. Granger, J. 3 1. These parties met and exchanged horses on Sunday. The transaction was unlawful. The record does not dis- close that either party suffered a loss in the transaction. It was an exchange of a horse for a horse, and there is no averment or claim that they are not of equal value. The parties were alike in the wrong, and the law makes the same presumptions for and against each. If this exchange had been made on a secular day, there could be no pre- tense of the plaintiffs' right of recovery. The question is therefore a For discussion of principles, see Tiffany, Sales (2d Ed.) § G5. 3 Tin- statement of facts is abridged and part of the opinion omitted. SALES PROHIBITED BY STATUTE 153 one of a naked legal right, not to relief from the consequences of a violated law, but to invoke the aid of a violated law to relieve them from what would otherwise be legal. It is well settled that the law will not aid the parties to enforce a contract made on Sunday. Thus if A. sells his horse to B. on Sunday on a credit the law will not aid him to enforce a payment. It will sooner permit him to suffer the loss. Much less will it, if he sells his horse on Sunday, and receives in money the full value thereof, assist him on Monday to return the money and regain his horse. This supposed case as against appel- lants is not stronger than the one at bar. It is not important that we should discuss cases in which one party has a superior advantage, and is seeking to take the property of another without compensation, or to make rich gains by means of the Sunday law. Without now com- mitting ourselves to any theory in such cases, it is easy to imagine con- ditions and wrongs for which it would be difficult to believe the legis- lature ever designed the law as a shield. But it is not difficult to be- lieve that the legislature never intended that the law against Sabbath- breaking should be a means of enabling parties, because its offenders, to escape that which but for the offense would be legal and just. Appellants have made an extended collection of authorities bearing on the enforcement and application of Sunday laws to different facts, but no case is brought to our attention that in its facts is like this. Appellants criticise the holding in Gunderson v. Richardson, 56 Iowa. 56, 8 X. W. 683, 41 Am. Rep. 81, and intimate that it should be over- ruled if it militates against their position in this case. It was held in that case that there could be no recovery for fraudulent representa- tions marie as an inducement to enter into a contract on Sunday. It is true that the holding and reasoning in that case is inconsistent with appellants' position in this; but it does not follow that an adv< holding in that case would support appellants' view in this. In that case the defendant pleads the violation of the Sunday law as a fense or shield against a charge of fraud, and this court sustained the : upon the authority of Pike v. King, 16 Iowa, 49, and Kinney v. McDermott, 55 towa, 674, 8 N. W. 656, 39 Am. Rep. I'M ; citing nith v. I lean. 15 X. 11. 577. The abstract contains a paren thetical statement that the petition originally contained allegations of warranty and false representations, "which allegations were stricken and withdrawn by plaintiff." showing an intent to divesl the record of such a claim. This case rests, then, upon this proposition: I I a party, in violation of the law. parts with his property on Sunday, will the lav. for i on alone aid him to regain it: j Without hesita- tion we answer, "No." The lat«- case of Foster v. Wooten, 67 Mi All. 827.) Action by Amelia D. Knights against Richard VV. Brown and an- other, and by John !•'.. Bridges against Albert Bridges. Nonsuit or- ■ 1 in both ' ind plaintiffs exi ept. 1 1 a- M. [.i,, ]/■ 'I'h. turn upon the construction of the -.mic Statute, .'Hid are then ldcred in one opinion. ■ The i tatement of fad 9 is omitted. 160 ILLEGALITY The first is an action of assumpsit to recover the purchase money paid for a horse bought on Sunday. The plaintiff tendered a return of the horse for breach of warranty of soundness, which was refused, and sues for the price paid for it. The sale was on Sunday. The plaintiff was nonsuit, and has exception. The second is an action on the case to recover damages sustained for negligently letting a carriage that was unsafe and unsuitable for the uses for which it had been hired. The hiring was on Sunday, and the damage suffered was on Sunday. The plaintiff was nonsuit, and has exception. To both cases, section 20, c. 124, Rev. St., is interposed, as a de- fense. In reply, section 116, c. 82, Id., is invoked in the first case, and Acts 1895, c. 129, in the second case. The former statute, inherited from Massachusetts, was upon the erection of our state enacted in Acts 1821, c. 9, § 2. Among other things, it prohibits business, except works of charity or necessity, upon the Lord's Day. By a long line of decisions, this court has held that, by reason of that statute, a contract made on Sunday is void between the parties, and that the considera- tion therefor cannot be recovered back, and that a tort arising from such contract will not support an action for damages. Towle v. Lar- rabee, 26 Me. 464; Hilton v. Houghton, 35 Me. 143; Morton v. Glos- ter, 46 Me. 520; Bank v. Mayberry, 48 Me. 198; Pope v. Linn, 50 Me. 83; Tillock v. Webb, 56 Me. 100; Parker v. Latner, 60 Me. 528, 11 Am. Rep. 210; Plaisted v. Palmer, 63 Me. 576; Meader v. White, 66 Me. 90, 22 Am. Rep. 551 ; Mace v. Putnam, 71 Me. 238; Bank v. Kingsley, 84 Me. Ill, 24 Atl. 794. This act of 1821, was found, in practice to work a fraud, by allow- ing one party to a Sunday contract to retain his fruit of the transac- tion, and to give the other party none; so the legislature, in 1880 (Rev. St. c. 82, § 116), enacted that he who receives a valuable con- sideration for a contract made on Sunday shall not defend against it on that ground until he restores the consideration ; that is, if he will repudiate the contract he must first restore his gains from it, — a whole- some doctrine, that will not allow a desecration of the Lord's Day to become a cheat. In the first case at bar, the defendant sold a diseased horse for sound, took the purchase money as the price of a sound horse, and tries to keep it because he cheated on Sunday, or warranted the horse sound on Sunday, both of which he might do under the statute of 1821 and not be accountable therefor. The plaintiff tendered a return of the horse, which was refused. The tender operated to rescind the con- tract. It restored the parties to the same condition they were in before the sale, and the purchase money became the plaintiff's. The defend- ant cannot resist its return because of the old Sunday law. The same result would have followed had the plaintiff sued upon the contract for a breach of warranty. The defendant could not then have de- EFFECT OF ILLEGALITY 1G1 fended until he had returned the consideration that he had received for making the warranty. Such return would have precluded a recov- ery, for the damages might have been more than the price paid, had not the contract been void ; for the plaintiff would have been entitled to the benefit of his bargain, — that is, the horse, if sound, might have been worth more than the purchase price above what he was worth in the condition sold, unsound. A return of the horse, followed by a suit for the price paid, amounts to substantially the same thing as a suit for breach of the warranty. In either case the statute of 1880 bars the defense of Sunday contract until the price paid shall have been returned. Wentworth v. Woodside, 79 Me. 156, 8 Atl. 763; Berry v. Clary, 77 Ale. 482, 1 Atl. 360 ; Bank v. Kingsley, supra. In the second case at bar, the plaintiff procured another to hire for her, on Sunday, a horse and carriage for driving. The carriage let was unsafe, whereby the plaintiff was injured. She sues for damages received from the defective carriage while driving on Sunday. The act of 1821, as before seen, would bar recovery (Wheelden v. Lyford, 84 Me. 114, 24 Atl. 793) ; but the legislature enacted in Acts 1895, c. 129, that the act of 1821 (Rev. St. c. 124, § 20) shall not bar "any action for a tort or injury suffered on Sunday." The plaintiff's injury was suffered on Sunday by defendants' tort; that is, their negligence in letting an unsafe carriage. It matters not whether the plaintiff's action be assumpsit for breach of an implied warranty to furnish a suitable carriage, or case for negligence in not so doing. In either case, the action would be for an "injury suffered" on Sunday, and this the act of 1895 expressly excepts from the operation of the statute of 1821. Exceptions sustained. Both actions to stand for trial. DUNLOP v. MERCER. In re DUNLOP. (Circull Court of Appeals, Eighth Circuit, K>07. 156 Fed. 545, 80 C. C. A. 135.) Appeal from the District Court of the United States for the District of .Minnesota. Petition to Revise Proceedings of the District Court in a Bankruptcy Matter. Before Sanborn and Vax Devanter, Circuit Judges, and rmi<- District Judj nborn, Circuit Jud Two corporations of Arizona, which had been doing bu iness in Minnesota, were adjudged bankrupts in Stat( I ' i loiirl in thai state. The tin ire <>!' one of them, of the Waterbury-Zimmer [mplement Company, filed a petition in the court below m the matter of Uic bankruptcy of the other, the » Part "f tin- opinion la'omitt< d. COOLSTCAB] Sam II 1C2 ILLEGALITY Western Implement Company, for an order that certain vehicles, ma- chinery, and other merchandise, which were in the possession of the Western Company when it was adjudged a bankrupt and thence came to the possession of the trustees of its estate, be delivered to the trustee of the property of the Zimmer Company, because, as he alleged, this property had been sold and delivered by the Zimmer Company to the Western Company under an agreement, dated February 5, 1906, to the effect that the tit l e and ownership thereof should remain in the vendor until the goods were paid for in cash, and no payment on account of them had been made. The trustees of the Western Company defended on the grounds that the contract was not made until September 8, 1906, after most of the property had been delivered; that it was made with the intent to defraud the creditors of the Western Company ; that it was withheld from record with like intent ; that the Zimmer Com- pany was not qualified to do business in Minnesota until June 30, 1906, after the larger part of the property had been delivered ; and that the contract on its face evidenced an absolute sale of the property to the Western Company. Evidence was introduced, and the court overruled all the defenses except the last, but sustained that, and denied the prayer of the petition. This ruling was assigned as error, and the case is presented by petition to revise and by appeal. As it involves the consideration of the evidence of the relation of the parties and of their acts in making and performing the contract, it will be consid- ered on the appeal, and the petition to revise is dismissed. * * * But counsel argue with great ability and admirable ingenuity that the contract of conditional sale was violative of the qualifying statute, that it was consequently void, and therefore that the title and ownership of the property vested in the Western Company. But the premises of this syllogism fail to support its conclusion. If the contract was void because the corporation was not authorized to do business in Min- nesota under its statutes, it was void in every part — in the agreement to sell, in the condition of the sale, and in the agreement to buy. An agreement of absolute sale would have been equally void. The con- tract was that the title and ownership of this property, which was in the vendor, should pass to the Western Company on condition that it paid its notes and accounts, and not otherwise, and that the Western Company would pay them. The latter company defaulted, and, if the agreement was valid, the ownership and title remained in the vendor. If the agreement was void, then there was no contract that the Western Company should pay the agreed price for the goods, or that the Zim- mer Company would sell them, or that the ownership or the title to them should ever pass to the Western Company, either with or with- out condition, and they remained in the vendor. If the fact that the corporation could not lawfully make any contract whatever in Minne- sota concerning these goods made its conditional sale of them upon which the minds of the parties met void, it could not have had the ef- EFFECT OF ILLEGALITY 1G3 feet to create a contract of absolute sale to which neither party agreed, and which would have been equally void. What the appellees really ask here is that because, as they contend, the agreement of conditional sale was illegal and void, this court of equity shall make for the parties a new agreement of absolute sale to which neither of them agreed, and which would have been equally void, and that it proceed to enforce this new agreement, so that the creditors of the vendee, may appro- priate to themselves property of the value of about $12,000 which belongs in equity to the creditors of the vendor. This petition does not appeal with compelling force to the conscience of a chancellor, and it must be denied. The title and ownership of the property in contro- versy remained in the Zimmer Company, and they never passed to the Western Company, or to its trustees, whether the effect of the statutes of Minnesota relative to the authority of a foreign corpora- tion to do business in that state rendered the contract of sale void or left it valid. Moreover, if the sale had been an absolute one, and if it had been void, the trustee of the Zimmer Company might stdl have recovered this property. In Pullman's Palace Car Co. v. Central Transportation Co., 171 U. S. 138, 151, 18 Sup. Ct. 808, 43 L. Ed. 108, the Central Company had made a lease which was beyond its powers, in restraint of trade, against public policy, illegal, and void. Central Transporta- tion Co. v. Pullman's Car Co., 139 U. S. 24, S3, 11 Sup. Ct. 478, 35 L. Ed. 55. It had made this lease in the year 1870, and had thereby stripped itself of all its property, and the lessee, which had been in possession of this property and of its proceeds under this void contract for more than 10 years, refused to perform its part of the agreement, or to deliver back or to account for the property, it had received. The Supreme Court held the contract illegal and void, but compelled the :iay back to the lessor 817,000 in cash and the value of the cars and other property which it had received from the lessor under the void agreement, and which amounted in all to $727,846.50 and in- terest. That cant said: "The courts, whili ing to maintain any action upon the unlawful contract, have always tried to do jusl .cen the parties, so far as could be done consistently with ad- nce to law, by permitting property or money, parted with on the faith of the unlawful contract, to be recovered hack, or con ition to be i le for it." Central Transp. Co v. Car Co., 139 U. S. 60, 11 Sup. Ct. P. Ed. 55; Pullman's Palace Car Co. v. Central Transp. Co., 171 U. S. 150, 18 Sup. Ct. 808, 13 P. Ed. 108. IP 1 for the appellee- claim, the contract evidenced an a . and it is void, no paymenl has ever been made for the property under consideration which the id the trustees of its ■ ined under this agreement. No legal o le is perceived, in the lighl of tl i in 1 'ullman's 1 'a I !ar ( lompany' to requiring them to r< it to the trustee of the vendor for the 1G4 ILLEGALITY benefit of its creditors to whom it in equity belongs, and no court which strives to do justice and succeeds would fail to do so. There would be in such a case an implied and an enforceable contract by the vendee to return the property, or its value, which it had secured with- out consideration under the void contract. Planters' Bank v. Union Bank, 16 Wall. 433, 21 L. Ed. 473; In re Hovey's Estate, 193 Pa. 385, 48 Atl. 311, 315. But was the contract void ? Its only infirmity was that the Zimmer Company failed to comply with the regulations of the statute of Min- nesota which conditioned its authority to make the contract, regula- tions with which it had ample power to comply, and that the statute imposed a penalty of $1,000 and a disqualification to maintain suits in the courts of that state for a failure to comply with those regulations. The making and performance of the agreement were not morally wrong. In the absence of the statute there was no more evil in the doing of business by a foreign corporation in the state of Minnesota without a principal place of business, an appointed agent to accept service, and the payment of a license tax, than there was in so doing with them. The business which this corporation transacted was not, like the sale of liquor, a peril to the welfare of the citizens of the state and subject to regulation by its police power. It was the sale of ma- chinery. It was a transaction of commerce, which was a benefit to the state and to its people. There was no moral turpitude and no peril to the citizens in the making or the performance of this contract. Still, it was undoubtedly violative of the statute and illegal. Counsel invoke the general rules that an illegal contract, a contract in violation of the law of a state, is void and unenforceable in any court sitting in the state, and that the federal courts follow the con- struction of the Constitution and statutes of a state given by its highest judicial tribunal in cases which involve no question of general juris- prudence, of commercial law, or of right under the Constitution and laws of the United States, and they cite Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137, in which the Supreme Court held that the contract of an unqualified foreign corporation for the sale of an engine and machinery in Colorado was not void because in making that sale the corporation was not doing business within the state of Colorado and because the business which it transacted was interstate commerce; Miller v. Amnion, 145 U. S. 421, 12 Sup. Ct. 884, 36 L. Ed. 759, in which a contract for the sale of liquor in Chi- cago without a license was held void, with the prefacing statement that its sale was a peril to the welfare of the community and its regu- lation within the police power of the state; Diamond Glue Co. v. U. S. Glue Co., 187 U. S. 611, 613, 23 Sup. Ct. 206, 47 L. Ed. 328, in which a contract of an unqualified corporation to superintend the con- struction of and to operate a glue factory in the state of Wisconsin was held void under the statute of that state, which expressly declared, EFFECT OF ILLEGALITY 1G5 and which the Supreme Court of that state had held, made such a con- tract "wholly void" on behalf of the foreign corporation, but valid and enforceable against it in favor of the other party to the agreement (Ashland Lumber Co. v. Detroit Salt Co., 114 Wis. 66, 89 N. W. 904) ; Chattanooga N. B. & L. Ass'n v. Denson, 189 U. S. 408, 23 Sup. Ct. 630, 47 L. Ed. 870, in which a note and mortgage taken by an unquali- fied corporation in Alabama were held void because the Supreme Court of the state had held like contracts void under a statute of that state; Trust Company v. Krumseig, 172 U. S. 351, 19 Sup. Ct. 179, 43 L,. Ed. 474, which has been reviewed supra; and Kibbe v. Stevenson Iron Min. Co., 136 bed. 147, 69 C. C. A. 145, and other cases which do not relate to this specific question. Many other cases, however, which treat of this subject, have been carefully read and considered, and they are cited, and some of them are reviewed, in Butler Bros. Shoe Co. v. U. S. Rubber Company, 156 Fed. 1, 84 C. C. A. 167, which was consid- ered and decided with this case, and to which reference is made for citations. The general rule that an illegal contract is void and unenforceable is, however, not without exception. It is not universal in its applica- tion. It is qualified by the exception that where a contract is not evil in itself, and its invalidity is not denounced as a penalty by the express terms of or by rational implication from the language of the statute which it violates, and that statute prescribes other specific penalties, it is not the province of the courts to do so, and they will not thus affix an additional penalty not directed by the lawmaking power. Fritts v. Palmer, 132 U. S. 282, 289, 293, 10 Sup. Ct. 93, 33 L. Ed. 317; Na- al Bank v. Matthews, 98 U. S. 621, 629, 25 L. Ed. 188; L< County Bank v. Townsend, 139 U. S. 67, 76, 11 Sup. Ct. 496. 35 L. Ed. 107; Thompson v. St. Nicholas Nat. Bank, 146 U. S. 240, 13 Sup. Ct. 66, 36 L. Ed. 956; Blodgett v. Lanyon Zinc Co., 120 Fed. 7, 58 C. C. A. 79, 82, 83; Sioux City, etc., Co. v. Trust Co., 82 Fed. 124, 134, 27 C. C. A. 73, 83; Hanover Nat. Bank v. Fat. Hank, 109 Fed. 421, 426, 48 C. C. A. ^S_>. 487; Speer v. Board of County Com'rs, 88 Fed. 749, 758, 32 C. C. A. 101. 110; National Bank of Xenia v. Stewart, 107 U. S. 676, 2 Sup. Ct. 77i<, 27 L. Ed. 592; Gold Mining Co. v. Nat. Bank, 96 U. S. 640, 24 L,. Ed. ; O'Hare v. Bank, 77 Pa. ( V; Pangborn v. Westlake, 36 towa, a R. & C. R. Co. v. Evans, 14 C. C. A. 116, 121, 122, Fed. 809, 815. * * * The contracl in suit was innocent in it ! ' because it v violative of the statute ; bul it wa nol void, and the trustee of the ven was the owm r of th< pn ipert.3 in 1 ontroversy under it. The order of the courl below, which denied his petition for a return of the prop ■ 1, and the I be remanded to the coi ; ow, with instructions to take further proceedings nol incon istent with the view., expressed in this opinion, tt is so ordered. 166 CONDITIONS AND WARRANTIES CONDITIONS AND WARRANTIES I. In General 1 POPE v. ALUS. (Supreme Court of United States, 18S5. 115 U. S. 363, 6 Sup. Ct. 69, 29 ' L. Ed. 393.) Edward P. Allis, the defendant in error, was the plaintiff in the circuit court. He brought his suit to recover from the defendants Thomas J. Pope and James E. Pope, now the plaintiffs in error, the sum of $17,840, the price of 500 tons of pig-iron, which he alleged he had bought from them and paid for, but which he refused to ac- cept because it was not of the quality which the defendants had agreed to furnish. The plaintiff also demanded $1,750 freight on the iron, which he alleged he had paid. The facts appearing upon the record were as follows : The plaintiff carried on the business of an iron-founder in Mil- waukee, Wisconsin, and the defendants were brokers in iron in the city of New York. In the month of January, 1880, by correspondence carried on by mail and telegraph, the defendants agreed to sell and deliver to the plaintiff 500 tons of No. 1 extra American and 300 tons No. 1 extra Glengarnock (Scotch) pig-iron. The American iron was to be delivered on the cars at the furnace bank at Coplay, Pennsyl- vania, and the Scotch at the yard of the defendants in New York. By a subsequent correspondence between the plaintiff and the defend- ants it fairly appeared that the latter agreed to ship the iron for the plaintiff at Elizabethport, New Jersey. It was to be shipped as early in the spring as cheap freights could be had, consigned to the National Exchange Bank at Milwaukee, which, in behalf of the plaintiff, agreed to pay for the iron on receipt of the bills of lading. That quantity of American iron was landed at Milwaukee and delivered to the plain- tiff about July 15th. Before its arrival at Milwaukee the plaintiff had not only paid for the iron, but also the freight from Coplay to Mil- waukee. Soon after the arrival in Milwaukee the plaintiff examined the 500 tons American iron, to which solely the controversy in this case referred, arid refused to accept it, on the ground that it was not of the grade called for by the contract, and at once gave the defend- ants notice of the fact, end that he held the iron subject to their order, and brought this suit to recover the price of the iron and the freight thereon. i For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 70-72. IN GENERAL 167 The defenses relied on to defeat the action were (1) that the iron delivered by the defendants to the plaintiff was Xo. 1 extra American iron, and was of the kind and quality required by the contract ; and (2) that the title having passed to the plaintiff when the iron was shipped to him at Elizabethport, he could not afterwards rescind the contract and sue for the price of the iron and the freight which he had paid, but must sue for a breach of the warranty. It was conceded upon the trial that if the plaintiff was entitled to recover at all, his recovery should be for $22,315.40. The defendants pleaded a counter-claim for $5,311, which was admitted by the plain- tiff. The jury returned a verdict for the plaintiff for $16,513.11, for which sum and costs the court rendered a judgment against the de- fendants. This writ of error brings that judgment under review. Woods, J. 2 * * * 4. The assignment of error mainly relied on by the plaintiffs in error is that the court refused to instruct the jury to return a verdict for the defendants. The legal proposition upon which their counsel based this request was that the purchaser of personal property, upon breach of warranty of quality, cannot, in the absence of fraud, rescind the contract of purchase and sale, and sue for the recovery of the price. And they contended that, as the iron was delivered to defendant in error either at Coplay or Elizabethport. and the sale was completed thereby, the only remedy of the defendant in error was by a suit upon the warranty. It did not appear that at the date of the contract the iron had been manufactured, and it was shown by the record that no particular iron was segregated and propriated to the contract by the plaintiffs in error until a short time before its shipment, in the latter part of April and the early part of May. The defendant in error had no opportunity to inspect it until it arrived in Milwaukee, and consequently never accepted the partic- ular iron appropriated to fdl the contract. It was established by the verdict of the jury that the iron shipped was not of the quality required by the contract. Under these circumstances the contention of the plaintiffs in error is that the defendant in error, although the iron ship ped to him was not what he bought, and could not lie used in busim was bound to keep it, and could only recover the difference in value between the iron for which he contracted and the iron which was de- livered to him. We do not think that such is the law. When the subject matter of ) tence, or nol rtained at the time of the contract, an undertaking that it shall, when existing or ascertained, possi tain qualities, is not a mere warranty, hut a condition, the pei f irmance of which is precedent to any obligation upon the vendee under contract; because the existence of tho e qualitii g part of the ription of the thing sold becom tial to its identity, and the vendee cannot be obliged t' .e and pa)- for a thing different from r. i rt '.r i be opinion is omlttt d. 1G8 CONDITIONS AND WARRANTIES that for which he contracted. Chanter v. Hopkins, 4 Mees. & W. 404; Barr v. Gibson, 3 Mees. & W. 390; Gompertz v. Bartlett, 2 EL & Bl. 849; Okell v. Smith, 1 Stark, N. P. 107; notes to Cutter v. Powell, 2 Smith, Lead. Cas. (7th Amer. Ed.) 37 ; Woodle v. Whitney, 23 Wis. 55, 99 Am. Dec. 102; Boothby v. Scales, 27 Wis. 626; Fair- field v. Madison Manuf'g Co., 38 Wis. 346. See, also, Nichol v. Godts, 10 Exch. 191. So, in a recent case decided by this court, it was said by Mr. Justice Gray : "A statement" in a mercantile contract "descrip- tive of the subject-matter or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty in the sense in which that term is used in insurance and maritime law ; that is to say, a condition precedent upon the failure or non-perform- ance of which the party aggrieved may repudiate the whole contract." Norrington v. Wright, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 366. See, also, Filley v. Pope, 115 U. S. 213, 6 Sup. Ct. 19, 29 L. Ed. 372. And so, when a contract for the sale of goods is made by sample, it amounts to an undertaking on the part of the seller with the buyer that all the goods are similar, both in nature and quality, to those exhibited, and if they do not correspond the buyer may refuse to receive them ; or, if received, he may return them in a reasonable time allowed for ex- amination, and thus rescind the contract. Lorymer v. Smith, 1 Barn. & C. 1 ; Magee v. Billingsley, 3 Ala. 679. The authorities cited sustain this proposition : that when a .vendor sells goods of a specified quality, but not in existence or ascertained, and undertakes to ship them to a distant buyer, when made or ascer- tained, and delivers them to the carrier for the purchaser, the latter is not bound to accept them without examination. The mere delivery of the goods by the vendor to the carrier does not necessarily bind the vendee to accept them. On their arrival he has the right to inspect them to ascertain whether they conform to the contract, and the right to inspect implies the right to reject them if they are not of the qual- ity required by the contract. The rulings of the circuit court were in accordance with these views. We have been referred by the plaintiffs in error to the cases of Thornton v. Wynn, 12 Wheat. 184, 6 L. Ed. 595, and Lyon v. Bertram, 20 How. 149, 15 L. Ed. 847, to sustain the proposition that the de- fendant in error in this case could not rescind the contract and sue to recover back the price of the iron. But the cases are not in point. In the first, there was an absolute sale with warranty and delivery to the vendee of a specific chattel, namely, a race-horse ; in the second, the sale was of a specified and designated lot of flour which the vendee had accepted, and part of which he had used, with ample means to ascertain whether or not it conformed to the contract. The cases we have cited are conclusive against the contention of the plaintiffs in error. The jury has found that the iron was not of the quality which the contract required, and on that ground the de~ IN GENERAL 1G9 fendant in error, at the first opportunity, rejected it, as he had a right to do. His suit to recover the price was, therefore, well brought. Other errors are assigned, but, in our opinion, they present no ground for the reversal of the judgment, and do not require discussion. Judgment affirmed. PLANO MFG. CO v. ELLIS. (Supreme Court of Michigan, 18SS. GS Mich. 101, 35 N. W. 841.) This is an action of assumpsit, commenced in the recorder's court of the city of Niles, Michigan, by summons issued September 26, 1885. Plaintiff declared, orally, on the common counts, in assumpsit, and filed this bill of particulars: "Plaintiff's declaration: Common counts in assumpsit for the price and value of one Piano Manufacturing Co. binder, sold and delivered to the defendant by the plaintiff for the sum of $120." Defendant pleaded the general issue, with notice. The recorder rendered judgment for the defendant, and plaintiff appealed to the circuit court, Berrien county, where judgment was rendered for plaintiff. Defendant appealed. Champlix, J. On the eighth day of July, 1885, the plaintiff, through its agents Harder & Haynes, entered into an agreement with defendant in writing, as follows: "Niles, Michigan, July 8, 1885. "We hereby agree to let Peter Ellis have the sample Piano binder, 1885, at same price that Mr. Ream has his for, and the binder is to do good work and give satisfaction; and, if not, the said Ellis is to pay for use of same. Harder & Haynes. "Peter Ellis." ' Plaintiff, by its agents, delivered a Piano binder at defendant's farm, and set it up, and put it in operation. Defendant used it in cut- ting about 95 acres of grain, and claims that it did not do good work, and did not give to him satisfaction; and, on July 27, 1885, he served written notice on Harder & Haynes, as follows : "Niles, Mich., July 27, 1885. "Messrs. Harder & Haynes — Gentlemen: The sample Piano binder, that you let me have on trial, docs not do good work, and does not give satisfaction. I am not satisfied with it. It is at my place, where you left it, subject to your order; you can come and take it. I am willing to pay for the use of the same, and hereby offer so to '1". ours, etc., Peter Ellis." On the trial, testimony was offered to show how the machine worked. The defendant's counsel objected to its introduction, ing imma terial. The circuit jud uled the objection, and admitted the testimony, saying: "My opinion of the construction of this contract is this: that it is to be a sat ry machine, not to him, but such 170 CONDITIONS AND WARRANTIES as people knowing the quality of machines would be satisfied with; it is to do satisfactory work." Under this ruling a large amount of testimony was received as to the working of the machine while in defendant's possession, and the circuit judge, construing the instrument, in his charge to the jury, in- structed them as follows : "As I said in the outset, this word 'satisfac- tion' has no further significance than the fact that it should be a good ■ machine, and do good, reasonable work, which would be satisfactory to intelligent, reasonable men using machinery." 'And again : "The question for you to determine is, was this machine capable, with proper management, of doing as good work as those that are called good, first-class machines, working through the country, under the same cir- cumstances, and in the same kind of grain ? Was it a good machine, and did it do good work, under proper management, and proper con- ditions ; did it do that kind of work so it should have been satisfac- tory to a man of intelligence in relation to this kind of machines ; did it do that? That is the question." We are of opinion that the circuit court erred in the construction which he placed upon the contract. A cardinal axiom, in the construc- tion of written contracts, is that all the parts must be examined, and effect given to every word and phrase, if practicable. Vary v. Shea, 36 Mich. 388; Norris v. Showerman, Walk. Ch. 206; Id., 2 Doug. 16; Paddock v. Pardee, 1 Mich. 421; Howell v. Richards, 11 East, 643. The object is to arrive at the intention of the parties; and this is to be deduced from the language employed by them to express their in- tention. If the language employed is not free from doubt or uncertainty, resort may be had to the condition of the respective parties, the subject- matter of the contract, and the circumstances surrounding the trans- action and connected with it, and everything except the contempora- neous and previous declarations of the parties, for the purpose of enabling the court to ascertain the intention of the parties. Mills v. Spencer, 3 Mich. 127, 136. Applying the above principles of con- struction to the writing introduced as the basis of plaintiff's claim, it is clear that the binder was not only to do good work, but it was to give satisfaction to defendant. Unless he was satisfied with the ma- chine, although it did good work, he was not bound to purchase. The construction placed on the instrument by the circuit judge completely nullify the words "and give satisfaction." He construed them as syn- onymous with, to do satisfactory work, such as people knowing the quality of machines would be satisfied with ; or, to use his own lan- guage, "this word 'satisfaction' has no further significance than the fact that it should be a good machine, and do good, reasonable work, which would be satisfactory to reasonable men using machinery." This, certainly, is not the usual signification of the word, and there is nothing in the context, or in the subject-matter, which indicates that the word was used in any other than its ordinary meaning. The ven- dor had already agreed that the binder should "do good work," and if IN GENERAL 171 the learned judge had defined that phrase in the same way he did the word "'satisfaction," it would have been applicable and proper. No one can read this writing, and give to the words their ordinary mean- ing, without understanding that something more was required than that the binder should do good work before defendant was obliged to keep and pay for the machine. He was not obliged to do so unless, also, it gave satisfaction to him. We may not take judicial notice of the fact, but we may well suppose that there is a choice between ma- chines for reaping and binding that do good work. It may be that a machine which will do good, satisfactory work in reaping and bind- ing, may, at the same time, have more side-draught than another, or it may be so geared as to require much more power to propel it than an- other, or its machinery may be complicated, and so constructed as to easily get out of repair, or require greater care and skill in operating it. All these things may not be impossible, or even improbable. How, then, can it be said that, although it does good work, nevertheless it may not give satisfaction? Or why should it be said, when the bargainer has reserved the right to elect whether he be fully pleased or not, that he is bound to be pleased if another reasonable or intelligent man is pleased with the work of such machine? There is another clause in the contract which has a bearing upon the question. It is stipulated that if the machine does not do good work, and give satisfaction, the said Ellis is to pay for the use of the same. It cannot be contended, with reason, that Ellis agreed to pay for the use of a machine that did not do good work. This clause implies that it may do good work, and yet not give satisfaction so that he will be willing to keep and pay for it. He agreed that, if it did not do good work, and give sal isfaction, he would pay for the use of the binder. He was entitled. under the agreement, to give the machine a thorough, practical trial; and then, if he was not satisfied with it, he was to pay for the use of it. This provision entitles the writing to a liberal construction in his favor. It shows that he had an option to accept or reject the hinder, according as it gave him satisfaction or not. A proper construction of the contract clearly livings it within the first class of such contracts referred to in Machine Co. v. Smith, 50 Mich. 565-569, 15 N. W. 906, 45 Am. Rep. 57, and is governed by the decision in that case. The judgment must be reversed and a new trial granted. 172 CONDITIONS AND WARRANTIES II. Warranties 8 J. I. CASE PLOW WORKS v. NILES & SCOTT CO. (Supreme Court of Wisconsin, 1S95. 90 Wis. 590, 63 N. W. 1013.) Action by the J. I. Case Plow Works against the Niles & Scott Company, for breach of warranty. There was a judgment for plain- tiff, from which both parties separately appeal. The plaintiff brought action against the defendant company, engaged in the manufacture of wheels for agricultural implements, to recover damages sustained by reason of the breach of warranty of 11,000 such wheels, ordered and purchased of the defendant under a written contract dated August 16, 1888, which, it appears, was a written or- der given by the plaintiff to the defendant, and accepted by the lat- ter, in writing, as follows; "You may enter our order for our season's wants on the following styles of wheels, and at the prices and terms named: 32-in. walking cultivator wheel, V/± rim, half oval, 8 steel spokes or 10 iron spokes, % $ 60 each 32-in. walking cultivator wheel, lVi rim, half oval, 8 steel or 10 iron spokes, % 59 each 32-in. sulky wheel, 2 1 /! rim, half oval, 14 steel spokes, % 100 each 24-in. wheel, 2 in. double channel rim, 8 steel spokes, % 70 each ********** "You to guaranty the wheels against breakage in shipping, and against defects in material and workmanship. * * * '■ It was alleged in the plaintiff's complaint that the defendant, at the time of entering into the contract, well understood and knew that the plaintiff desired said wheels to attach to the farm machinery manufactured by it, such as cultivators, etc., and that the defendant guarantied the wheels as above stated, and that said wheels should be proper and suitable for the purposes for which the plaintiff de- sired them ; that the plaintiff ordered and received of the defendant, under the contract, wheels to the number of 11,000, and paid it there- for $7,331.12; that at the time of the sale such wheels were defective in material, construction, and workmanship, and were totally unfit for the uses and purposes for which the plaintiff purchased them, to its damage of $7,331.12; that the plaintiff, at great expense, and relying on said guaranty, placed large numbers of such wheels upon plows, cultivators, etc., and placed the same on the market, and, when tested, said wheels were found worthless, and a large number of such plows, cultivators, etc., were returned by the various purchas- ers of the same, and the plaintiff was put to $5,000 expenses in the 3 For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 73-75. WARRANTIES 173 premises, and by reason of such defective wheels it lost the sale of a large number of its machines and implements, and suffered injury to its business and reputation. The defendant denied that it made any other or further war- ranties than those expressed in the contract, and it alleged that, prior to making the contract, samples of wheels were carefully examined and tested by the plaintiff, and that it had full knowledge of the prin- ciple of construction of said wheels, and of the material, workman- ship, and quality thereof, and of all weakness, if any, and liability to breakage, except from defective material or workmanship, and made selection of the kind of wheels it desired, and of the materials thereof, and assumed the risk of failure or breakage, except from shipment, defective materials or workmanship. Pixxey, J. 4 The finding of the court proceeds, in part, upon the basis of an implied warranty that the wheels were suitable for the purpose for which the plaintiff desired them, namely, "for our sea- son's wants," it being engaged in manufacturing plows, cultivators, etc., intending to attach them to such implements, with which it was supplying the trade, and in part on the basis of the written warranty "against defects in material and workmanship," the defendants having used common iron in the manufacture of the spokes, and that the wheels were defective in material, and were not fit and proper for the uses and purposes for which they were desired. The plaintiff's dam- ages were assessed at the gross sum of $4,655.54, but how much for defective materials, or how much upon the breach of the alleged im- plied warranty, it is impossible to say, nor does it appear upon what number of wheels the assessment was made ; so that, in the view we have taken of the rights of the parties, judgment cannot be given on the finding, and a new trial becomes necessary. 1. The wheels were made specially for the plaintiff, and it specified the sizes, dimensions, and material, and had looked over and examine. 1 els of that kind manufactured by the defendant, which had been tested in the presence of the plaintiff's representatives, as to their qual- ity and strength, before signing the contract. In th( ice of any written or oral warranty, it seems to be quite well established that in e. as the present no warranty of the suitableness of the wheels for the purpose desired can be implied. The purchaser, in SU( h case, takes the risk of the fitness of the wheels for their intended : and although it v. ted that they were required for a par dcular purpose, if the known, defined, and described hind of wh actually supplied, there was no implied warranty that they would answer the particular purpose intended by the purchaser, although nded and ted t<> d This is made clear in Leake, Cont. 104. 'I itract was not for the manufacture <<\ wheels generally, to satisfy a required put bul for the manufacture and deliver} "i *Tbe statement <>r (ai I I abridged and pari <>r the opinion la omitted 174 CONDITIONS AND WARRANTIES a specific kind or plan of wheels, of specified dimensions and sizes. This was the essential matter of the contract. Boiler Co. v. Duncan, ^7 Wis. 120. 124, 58 N. W. 232, 41 Am. St. Rep. 33; Chanter v. Hop- kins, 4 Mees. & W. 399; Ollivant v. Bayley, 5 Q. B. 288; Jones v. Just, L. R. 3 Q. B. 197, 202 ; Goulds v. Brophy, 42 Minn. 109, 43 N. W. 834, 6 L. R. A. 392; Seitz v. Machine Co., 141 U. S. 518, 12 Sup. Ct. 46, 35 L. Ed. 837 ; Deming v. Foster, 42 N. H. 165. Where, how- ever, a manufacturer or dealer contracts to supply an article which he manufactures or produces, or in which he deals, to be applied to a particular purpose, so that the buyer necessarily trusts to the judg- ment or skill of the manufacturer or dealer, there is in that case an implied warranty that it shall be reasonably fit for the purpose for which it is to be applied. Benj. Sales (4th Ed.) § 657; Jones v. Just, supra. The test in such cases is whether the purchaser trusts and relies upon the judgment of the manufacturer, and not upon his own. Brown v. Edgington, 2 Man. & G. 279 ; McQuaid v. Ross, 85 Wis. 494, 496, 55 N. W. 705, 22 L, R. A. 187, 39 Am. St. Rep. 864. This case, we think, falls within the rule first stated, and that there was no im- plied warranty of suitableness of the particular kinds of wheels, with specified sizes and dimensions, required by the plaintiff. 2. It is insisted, however, that the plaintiff relied upon the repre- sentations made by the defendant's agent as to the plan or method of construction, and, in particular, the manner of securing the spokes in the hubs of the wheels ; but these representations preceded the execution of the written contract, and the plaintiff took a limited war- ranty, incorporated in the written contract, in respect to material and workmanship, going to and covering in part the suitableness of the wheels for the purpose for which the plaintiff desired them. Where an article is sold by a formal written contract, which is silent on the subject of warranty, no express or oral warranty made at the same time or previously can be shown, nor can any additional oral war- ranty be ingrafted upon or added to one that is written, as the writ- ten instrument is conclusively presumed to embody the entire contract. Merriam v. Field, 24 Wis. 640; McQuaid v. Ross, 77 Wis. 470, 46 N. W. 892; De Witt v. Berry, 134 U. S. 312, 10 Sup. Ct. 536, 33 L. Ed. 896. The rule on this subject is too firmly settled to require dis- cussion, or the citation of other authorities. Evidence to show an ex- press oral warranty of the wheels, made previous to the written con- tract, was therefore clearly incompetent. 3. The contention of the plaintiff that it was not precluded by the warranties in the written contract from insisting upon an implied war- ranty that the wheels should be suitable for the purposes for which they were required, for reasons in addition to those already stated, cannot, we think, be sustained. The fact that the limited warranties going to the question of suitableness of the wheels were expressed in the contract, by the strongest implication, excludes and negatives the idea that it was intended that other or more comprehensive warranties WARRANTIES 175 should exist, and repels any implication of law to that effect. The contract, as written, must be taken as the final and conclusive evidence of all that was intended or agreed upon. The familiar rule, "Expres- sio unius est exclusio alterius," clearly applies. The demand of the purchaser for certain specified warranties indicates that no others were intended or expected. Had the parties intended that there should be an implied warranty, there was no occasion to make any stipulation on the subject. The one introduced must be taken as covering the en- tire subject; otherwise it would be idle and unmeaning. Adjudicated cases on this point are numerous and conclusive. We have not been referred to any decision expressly on the point to the contrary. Dickson v. Zizinia, 10 C. B. 602 ; Chanter v. Hop- kins, 4 Mees. & W. 399; Baldwin v. Van Deusen, 37 N. Y. 487; De Witt v. Berry, 134 U. S. 313, 10 Sup. Ct. 536, 33 L. Ed. 896; Carle- ton v. Lombard, Ayres & Co., 72 Hun, 254, 25 N. Y. Supp. 570, 575 ; Whitmore v. Iron Co., 2 Allen (Mass.) 58; Deming v. Foster, 42 N. H. 165; Budd v. Fairmaner, 8 Bing. 52; Shepherd v. Gilroy, 46 Iowa, 193. The case of Merriam v. Field, 24 Wis. 640, was relied on as establishing a contrary view. In that case there was an express warranty of title in the bill of sale, but it was held that facts might be shown from which an implied warranty of quality would arise. Between these two subjects there was no dependent connection, but each stood by itself. There was not, as in this case, any qualified or restricted warranty upon the question of quality or suitableness, and the case was ruled on the authority of Bigge v. Parkinson, 7 Hurl. & N. 955, where the warranty, as in Merriam v. Field, was on a sep- arate and independent subject, namely, that the goods would pass in- spection, and it was held that an express written warranty on that .subject would not preclude an implied one that the goods were in fact fit for the purpose intended. The case of Boothby v. Scales, 27 Wis. 626, was also referred to, but in this case there was no express war- ranty by written contract, and it was held that an implied warranty of suitableness might exist, although a handbill had been delivered at the time <>f the and the agent of the vendor affirmed of the fanning mill that it possessed the capacities therein set forth. There was no written warranty on any subject, and the particular point liti that the agent making the oral affirmation had no authorit} to .-.arrant the mill. Tin.- case, therefore, is no authority upon ;■ c< n ideral ion. |y stated, iIh- plaintiff having specified the sizes and dim siori materials of the particular plan or kind of wheel it desi and having lo over and examined wheels of thai kind. ired by the vendor, which had been tested in their pi as io their quality and h, the conclusion seems in ile that, subject to i in material and wo i hip, the case falls within that of Boiler Co. v. Duncan, 87 Wis. 122, . r :: V W. 232, 11 Vm. St. Rep. 33, and tin' plaint ill' mn t he In Id to have obtained thai for which 176 CONDITIONS AND WARRANTIES it contracted, subject to such remedy as it may be entitled to on the warranties against defective material and workmanship; and, in this connection, it is proper to observe that a defect in the plan of the wheels is not a defect of workmanship, for workmanship has only to do with the execution of the plan, and it follows that the objection much relied on, that the plan for the wheels was defective and imprac- ticable, is not covered by the written warranties. The plan relates to the question of suitableness of the wheels for the purpose for which they were purchased, in relation to which, for reasons already stated, we hold that there was no implied warranty. * * * Reversed on each appeal. CARLETON v. LOMBARD, AYRES & CO. (Court of Appeals of New York, 1S96. 149 N. Y. 137, 43 N. E. 422.) Action by T. Osgood Carleton and another against Lombard, Ay- ers & Co., a corporation, for alleged breach of contract to deliver plaintiff's a specified quality and quantity of petroleum. From a judg- ment of the general term, first department (28 N. Y. Supp. 1107) af- firming a judgment for defendant, plaintiffs appeal. O'Brien, J. 5 The plaintiffs sought to recover damages in this action for the breach of an executory contract for the sale of goods. The defendant is a domestic corporation engaged in refining crude petroleum for sale and export, and both parties to the action were members of the New York Produce Exchange. On the 10th of Jan- uary, 1887, the parties entered into a contract in writing, which, by its terms, was made subject to the rules of the exchange, whereby the defendant agreed to sell and deliver to the plaintiffs a large quan- tity of refined petroleum. The following is the material part of the contract, in which the kind, quantity, and price of the goods are spec- ified, as also the time and place of delivery, in these words : "Fifty- five thousand cases, ten per cent., more or less, each case packed with two of their patent cans, with low screw tops or nozzles and brass labels, containing five gallons each of refined petroleum of their Stella brand, color standard white or better, fire test 76 degrees Abel or upwards, at eight and one-half cents per gallon, cash on delivery. To be delivered in yard, free of expense to vessel ; to be ready not earlier than the twenty-fifth January, 1887, not later than the tenth of Feb- ruary, 1887, with twenty-five days to load. Brass labels one-half of one cent each." It appears that before closing this contract the plaintiffs had re- ceived from the firm of Graham & Co., merchants at Calcutta, British India, an offer to purchase a like amount of refined petroleum of the same brand, color, test, and packing, to be shipped at the port of New « Tart of the opinion is omitted. WARRANTIES 177 York, not later than March 15, 1887, for their account and risk, on board the British ship Corby, bound for Calcutta. This offer the plain- tiffs accepted on the same day that they entered into the contract with the defendant, and immediately after closing it. On or before March 1, 1887, the defendant delivered the oil, packed in the manner speci- fied in the contract, to the plaintiffs, alongside the Corby, at its fac- tory at Bayonne. The delivery by the defendant to the plaintiffs, and by the plaintiffs to their vendees in Calcutta, was thus accomplished by substantially the same act. The rules of the Produce Exchange, which were made part of the contract between the plaintiffs and the defendant, so far as material to the questions involved, were these: (1) The committee on petroleum were authorized and required to license duly qualified inspectors, members of the exchange, for the various branches of that business. (2) Buyers should have the right of naming the inspector, but must do so at least five days before the maturity of the contract. Failing in this, the seller might employ any regular inspector at the buyer's expense, and his certificate that the oil is in conformity with the contract shall be accepted. (3) When goods are delivered to vessel by buyer's orders, the acceptance of them by buyer's inspector shall be an acknowledgment that the goods are in accord- ance with the contract. The plaintiffs, under the rule, named the inspector, who on March 1, 1887, after the cargo was loaded on board the Corby, made and delivered to them a certificate in writing which certified that he had inspected the oil shipped on board the Corby, and stated therein the brand, color, test, and gravity of the same, which corresponded with the contract. The vessel started upon her voyage. The plaintiffs paid the defendant the purchase price of the oil, and then drew upon the parties in Calcutta to whom they had sold, for the price as between them, and their draft was paid. The vessel did not arrive at Calcutta till some time in June, and, when she began to discharge the cargo, it was found that the cans had become corroded from the inside by some foreign substance in the oil, and so perforated that they did not retain their contents. A large part of the oil was lost by leakage, and the whole cargo was pronounced unmerchantable, and finally sold at Calcutta for a small sum, for account of whom it might concern. When the condition of the goods was discovered by the consignees, during the discharge of the cargo from the ship, the plaintiffs were notified by cable of the situation and the condition of the oil. They laid these dispatches before the defendant, and a long correspondence by cable followed, in which tin- defendanl participated, and of all of which it had knowledge. The purpose of it was to ascertain the defect, if any, in the oil, and to reai h ome amicable arrangement. In the end all parti m to have become sati fied that a large loss had been sustained, and the parties in Calcutta, who had paid the plaintiffs for the property, called up' in them to make good their contract. The plain- COOLKt ''vi - S.u i- iu 178 CONDITIONS AND WARRANTIES tiffs in turn called upon the defendant to indemnify them from loss, and it then took the ground that it had, in all respects, performed its contract, and was not liable for the result. * * * The property which was the subject-matter of the contract between the parties was not in existence at the time it was made, but was thereafter to be produced by refinement of the crude material through a manufacturing process by the defendant. It was therefore a contract by a dealer with a manufacturer, and is subject to the rules and prin- ciples that apply to executory contracts for the sale and delivery of goods when the parties occupy these relations to each other. It is a conceded fact in the case that the oil delivered by the defendant to the plaintiffs alongside the Corby was of the kind and quality de- scribed in the written contract. In quantity, brand, color, and fire test, it corresponded with the terms of the contract. But it is claimed that, while all this is true, yet there was a latent or hidden defect in the article so delivered, the result of improper refinement or manufac- ture, not discernible upon inspection, which rendered the oil unmer- chantable, and unfit for transportation by sea in a sailing vessel, and that this defect was the cause of the loss which the plaintiffs have sus- tained. The most important question in the case is whether the defendant, notwithstanding its written contract, is bound to make good the loss, assuming that it was caused by such defect in the goods. The general rule of the common law, expressed by the maxim caveat emptor, is not of universal application, though the exceptions are quite limited; and one of them is the case of a manufacturer who sells goods of his own manufacture, who, it is said, impliedly warrants that they are free from any latent defect growing out of the process of manu- facture. The seller in such a case is liable for any latent defect aris- ing from the manner in which the article is manufactured, or from the use of defective materials, the character of which he is shown or is presumed to have knowledge of. This rule, and the reasons upon which it rests, or its qualifications and limitations, have seldom been stated in the same form by courts, and writers upon the subject; but that it exists, as a principle in the law of contracts, cannot be doubted. The leading case in this state is Hoe v. Sanborn, 21 N. Y. 552, 78 Am. Dec. 163. The learned judge who framed the opinion in that case, after stating the rule, proceeds to show the grounds upon which it rests. In his view, while this peculiar obligation is called a "warranty," for convenience, it does not rest upon any supposed intention of the parties or agreement, in fact, but is one which the law raises upon prin- ciples foreign to the contract, in the interest of commercial honesty and fair dealing, and analogous to those upon which vendors are held liable for fraud. It is quite difficult to reconcile the authorities upon the question, but it may be observed that they recognize the principle that in such cases the seller and buyer do not deal with each other quite at arm's length ; WARRANTIES 179 that the seller possesses superior knowledge on the subject, upon which the buyer is presumed to repose some degree of confidence; and that commercial honesty and fair dealing require that in such cases the seller be held bound to deliver the article free from secret or latent defects which are actually or presumptively within his knowledge. The principle was applied, in a later case in this court, to a contract for the sale of seeds of a particular description by the grower. It was there said that, as the grower of seeds must be presumed to be cognizant of any omission or negligence in cultivation whereby they were rendered unfit for use, there was the same reason for implying a warranty that they were not defective from improper cultivation, as, in the case of a sale of an article by a manufacturer, that it is free from latent defects. White v. Miller, 71 N. Y. 118, 27 Am. Rep. 13. The latest case that I have been able to find upon the question is Bridge Co. v. Hamilton, 110 U. S. 108, 3 Sup. Ct. 537, 28 L. Ed. 86. The leading cases bearing upon the point, both in this country and England, are there reviewed, and the court stated the principle in these words : "When the seller is the maker or manufacturer of the thing sold, the fair presumption is that he understood the process of its manufacture, and was cognizant of any latent defect caused by such process, and against which reasonable diligence might have guarded. This presumption is justified in part by the fact that the manufac- turer or maker, by his occupation, holds himself out as competent to make articles reasonably adapted to the purpose for which such or similar articles are designed. When, therefore, the buyer has no op- portunity to inspect the article, or when, from the situation, inspec- tion is impracticable or useless, it is unreasonable to suppose that he bought on his own judgment, or that he did not rely on the judgment of the seller as to latent defects, of which the latter, if he used due care, must have been informed during the process of manufacture. If the buyer relied, and, under the circumstances, had reason to rely, on the judgment of the seller, who was the manufacturer and mal of the article, the law implies a warranty that it is reasonably lit for the use for which it was designed, the seller at the time being in fun of the purpose to devote it to that use." The principle is distinctly admitted in the opinion of the learn< I court below, and I do not understand that it is denied by the lean counsel for the defendant. It is strenuously urged, however, that it can have no application to a case like this, where the contracl is in writing, with such ample d< on of the goods sold. But the obli attached to an utory contracl for the sale of goods by the manufacl nol he changed by the mere fad thai the tract has been reduced to writing. The writing, it is true, is deemed to i the v. 1 tnenl of the parties, bul since this peculiar liability arises from the nature of the transaction and the relations of the ] , without express wool .,r even actual intention, it will ISO CONDITIONS AND WARRANTIES remain as part of the seller's obligation, unless in some way expressly excluded. All implied warranties, therefore, from their nature, may attach to a written as well as an unwritten contract of sale. The par- ties may, of course, so contract with each other as to eliminate this obligation from the transaction entirely. The seller may, by express and unequivocal words, exclude it, and, in like manner, the buyer may waive it. So, also, the parties may provide for a delivery or inspec- tion of the article when made, which will operate to extinguish the liability upon acceptance. McParlin v. Boynton, 8 Hun, 449, and 71 N. Y. 604. In this case the parties did provide for an inspection of the oil. The scope and effect of that provision of the contract will be considered hereafter, but, aside from that, there was no language . used indicating any intention on the part of the buyer to waive, or the seller to exclude, the liability of a manufacturer. The proposition upon which the case turned in the court below, and upon which the judgment is defended here, was thus stated by the learned judge in the opinion at general term : "It is well settled that, when an article is sold under a contract which specifies the qualities which it shall possess, — no matter whether the language be a condition or a warranty, — the law will not, except in special cases, imply a war- ranty or condition that the article has other qualities. A warranty or condition, in a contract of sale, that the article sold has certain qual- ities, excludes the implication of a warranty or condition that it pos- sesses other qualities." From the operation of this general proposition, it will be seen that the learned judge excepts special cases, which, however, are not designated. In its application to this case the rule thus stated must mean that since the parties have, in their contract, specified the particular brand, color, and fire test of the refined pe- troleum which was the subject of the sale, the manufacturer's obliga- tion to deliver an article free from latent defects, arising from the process of manufacture, which would render it unmerchantable, has been excluded by implication. This is not, we think, the meaning of the rule to which the learned judge referred in the language quoted. The rule means that, where parties to a contract of sale have expressed in words the warranty by which they intend to be bound, no further warranty will be implied by law, but that expressed will include the whole obligation of the seller. Benj. Sales, § 666; Deming v. Foster, 42 N. H. 165. Moreover, this principle applies to sales of specific, existing chattels, and not ordinarily to sales of goods to be made or supplied upon the order of the buyer. There is much confusion in the cases on this subject, arising, doubtless, from an inaccurate use of the term "war- ranty." When an article is sold by the owner or maker by the par- ticular description by which it is known in the trade, it is a condi- tion precedent to his right of action that the thing which he has de- livered, or offers to deliver, should answer this description. But in many cases in modern times the sale of a particular thing by terms of WARRANTIES 181 description has been treated as a warranty, and the breach of such a contract a breach of warranty, whereas it would be more correct to say that it was a failure to comply with the contract of sale which the party had engaged to perform. Chanter v. Hopkins, 4 Mees. & W. 404 ; Eenj. Sales, § 600. There are many cases in which such words of description are not considered as warranties at all, but conditions precedent to any obligation on the part of the vendee, since the ex- istence of the qualities indicated by the descriptive words, being part of the description of the thing sold, becomes essential to its identity, and the vendee cannot be obliged to receive and pay for a thing dif- ferent from that for which he contracted. 2 Smith, Lead. Cas. (6th Eng. Ed.) 27; 2 Schouler, Pers. Prop. pp. 352, 353. The tendency of the recent decisions in this court is to treat such words as part of the contract of sale descriptive of the article sold and to be delivered in the future, and not as constituting that collateral obligation which sometimes accompanies a contract of sale, and known as a "war- ranty." Reed v. Randall, 29 N. Y. 358, 86 Am. Dec. 305 ; Iron Co. v. Pope, 10S N. Y. 232, 236, 15 N. E. 335. It is not now important to inquire how far, or under what circum- stances, the principle stated by the learned judge applies to contracts of sale of goods in esse between dealers, in which there is an express warranty. It is not, we think, applicable to the obligation of a man- ufacturer who contracts, as in this case, for a sale of his own product, the condition of which he is presumed to know. It is plain that in the case at bar the plaintiffs intended to buy, and the defendant to sell, an article of refined petroleum, which should not only correspond to the description in the contract, but should be free from latent de- fects arising from the process of manufacture, so as to constitute a thing which, in the commercial sense, would be of some use or value. It is quite conceivable that the oil might correspond with all the de- scriptions of the contract, and yet be a useless and unmerchantable thing, in consequence of defects arising from the process of manu- facture, in which case the buyer would have the shadow of the thing bought, without the substance. The defendant's obligation rests, not only upon the terms of the contract, but upon its superior knowh and the confidence which the buyer placed in its ability to produce a proper article; and hence the relations of the parties are quite differ- ent from that of dealers in the article in the market, each possessing equal means of information and opportunity for the detection of latent ects. A strict adherence to the h e words of the i t would not expre the full obligation of tl ndant. Thai the modity shall he so free from latent defects arising from the pro- cess of refining, and which could be guarded against by ordinary care. so as to render it merchantable, LS a term to he implied in all sin h com Story, Cont. (4th Ed.) §§ 836, 837; Jones v. |n t, J,. K 3 Q. I;. 197. 1S2 CONDITIONS AND WARRANTIES The plaintiffs were entitled to something more than the mere sem- blance or shadow of the thing designated in the contract. They were entitled to the thing itself, with all the essential qualities that rendered it valuable as an article of commerce, and free from such latent de- fects as would render it unmerchantable. Mody v. Grcgson, L. R. 4 Exch. 49. If the goods in question were in fact unmerchantable, in consequence of latent defects arising from the process of manufac- ture, and which the defendant could have guarded against by the exer- cise of reasonable care, it would be quite unreasonable to hold that the defendant has, nevertheless, performed the contract, because it has delivered oil of the same brand, color, and test specified. It is quite clear that the words of the written contract do not exclude a liability on the part of the defendant for fraud in the performance, and it is difficult to see how it can affect an obligation of the seller, who is also a manufacturer, which is based upon his actual or pre- sumed knowledge of latent defects in the oil, arising from the process of refinement. In the construction of commercial contracts for the sale and delivery of goods, the courts are not always bound by the literal meaning of words descriptive of the article, contained in the contract. It fre- quently happens, in large transactions, that the article which is the subject of the contract is described by some vague, generic word, which, taken strictly and literally, may be satisfied by a worthless or defec- tive article. In such cases the words may mean more than their bare definition or literal meaning would imply, and impose upon the seller an obligation to furnish, not only the thing mentioned in the contract, but a merchantable article of that name. Murchie v. Cornell, 155 Mass. 60, 29 N. E. 207, 14 L. R. A. 492, 31 Am. St. Rep. 526. If it be true that the defendant in this case delivered alongside the vessel an article which was unmerchantable and unfit for transportation, in con- sequence of hidden latent defects arising from the process of man- ufacture, and of which it had, or should have had, knowledge, in the exercise of reasonable care, it has not, in any just or substantial sense, performed its contract, although the article so delivered was of the brand, color, test, and specific gravity called for by the writing. The plaintiffs were not only entitled to the thing described, but to that thing in such condition, and so free from hidden defects, as to make it available to them as an article of commerce, and fit for transporta- tion. Whether this liability survived the delivery and inspection of the goods remains to be considered. When the rules of the exchange are read into the contract, it is provided that the acceptance of the pe- troleum by the buyer's inspector shall be an acknowledgment that the goods are in accordance with the contract ; and, as we have seen, the inspector so certified. The inspector was not the agent of either party, but an umpire selected to determine whether the article delivered along- side the Corby corresponded with the contract. The parties, in effect, WARRANTIES 183 submitted a certain question to the decision of the inspector, and that was whether the oil corresponded, in brand, color, and fire test, with the contract. He was not authorized to determine whether there was or was not any hidden or latent defects in the article at the time and place of the delivery which would render it unmerchantable. That question was not within the fair scope or purpose of the inspection, and the certificate on this point does not conclude the parties. If, how- ever, the defects which the plaintiffs now claim existed at the time of delivery, and which they claim to have produced the damages, were discernible upon the inspection contemplated by the contract, they were not hidden or latent defects, within the meaning of the rule, and in that case the certificate would conclude the parties. If, in execut- ing the power to determine the brand, color, fire test, and gravity of the article delivered, any other defect which would render it unmer- chantable would necessarily appear, the plaintiffs are concluded as to that defect by the certificate of the inspector. Studer v. Bleistein, 115 N. Y. 316, 22 N. E. 243, 5 L. R. A. 702; Pan Co. v. Remington, 41 Hun, 218. If I am right in these several propositions, it must follow that the plaintiffs were entitled to prove upon the trial, if they could, that the refined petroleum delivered by the defendant alongside the Corby, though corresponding with the description of the article in the con- tract, had in it some hidden or latent defect, not discernible by the inspection provided for, which then and there rendered it unmerchant- able. * * * Reversed. BLACKMORE v. FAIRBANKS, MORSE & CO. (Supreme Court of Iowa. L890. 79 Iowa, 282, 44 N. W. 548.) Action to recover damages alleged to have been sustained by rea- son of breach of warranty in the sale of machinery. There was a trial by jury, and a verdict and judgment for plaintiff. The de- fendant appeals. ROBINSON, J.° The agreement under which the machinery in controversy was sold was in writing, and in the form of an order. The portions material to a determination of the questions raised on this appeal arc as follows: "Messrs. Fairbanks, Morse & Co., Chi- ■ : Plea e furnish me at once the following-named goods : * * * One 25 II. P. Standard Westinghouse engine; one 30 II. P. boiler, with fixtures complete, and machines as follows: One steam pump, with sufficient capacity to supply boiler and heater with water tal from the well; * * * one Still \\ < 11 heater and connections com plete. * * * This order is for the engine and boiler at Lester- ville, I). T., with fixtures complete, excepl inspirator and heater; tho latter to be replaced with the Stillwell heater. Said outfit to be in Part of the opinion la omitted. 184 CONDITIONS AND WARRANTIES good order, except from exposure to weather at Lesterville, which has not damaged the real merits of the machinery." The machin- ery specified in the agreement was delivered to plaintiff. The petition alleges that the machinery was "warranted to be suffi- cient to furnish the motive power for the Aplington Grist & Flouring Mills, and be sound, and do good work, as specified in said warranty. * * * That on a specified test thereof, said engine, machinery, and appliances sold by defendant to plaintiff proved defective and insufficient, in this : that it throws crank case oil into the heater and boiler, so as to render it dangerous, insufficient, and entails great expense in its operation, and is insufficient to furnish the motive power for plaintiff's said mill." The answer denies the alleged war- ranty, denies the alleged defects in the machinery, and avers that the cause of the throwing of crank case oil into the heater and boiler was the use by plaintiff of an open heater, without an oil extrac- tor. * * * Appellant complains of the refusal of the court to give certain instructions asked by it, and of the giving of a portion of the charge on the same subject, which is as follows : "Under this contract, it was the duty of the defendant to furnish to the plaintiff an engine of the kind described, of twenty-five horse power, and all other ma- chinery and appliances specified in the contract, in good condition, and fit for use, except as damaged by exposure to the weather at Lesterville, Dak. ; and if the defendant failed and refused to furnish the plaintiff the said machinery in the condition specified, it would be liable to the plaintiff for damages in such sum as you may find from the evidence, and under the instructions, he has suffered." Ap- pellant contends that its contract would have been fully complied with, had it delivered to plaintiff a Standard Westinghouse engine in the condition in which .such engines are turned Out at the factory, whereas the instruction given required defendant to deliver a West- inghouse engine in good condition, and fit for use, except as dam- aged by the weather; or, in other words, that the court construed the contract to include a warranty that the engine to be delivered, not only had not suffered injury, except by the weather, since it left the hands of the manufacturer, but also that it was so constructed as to be fit for use, and for the use plaintiff desired to make of it. The rule in regard to an implied warranty of quality has been stated as follows : "So far as an ascertained specific chattel, already existing, and which the buyer has inspected, is concerned, the rule of caveat emptor admits of no exception by implied warranty of quality. But where a chattel is to be made or supplied to the order of the purchaser, there is an implied warranty that it is reasonably fit for the purpose for which it is ordinarily used, or that it is fit for the special purpose intended by the buyer, if that purpose be com- municated to the vendor when the order is given." 2 Benj. Sales, § 966. See, also, King v. Gottschalk, 21 Iowa, 513. In this case, IMPLIED WARRANTY OF TITLE 185 plaintiff had not inspected the property ordered, and had no oppor- tunity to do so, when the order was given. On the other hand, de- fendant knew the use for which the property was intended. There- fore, unless excluded by the terms of the order, there was an im- plied warranty that the property was fit for the designed use, and that it was in merchantable condition. Appellant contends that the order, in effect, contains an express warranty that the property shall be in good order; hence, that im- plied warranties must be excluded. It is true that, as a general rule, no warranty will be implied where the parties have expressed in words the warranty by which they mean to be bound, (2 Benj. Sales, § 1002 ;) but the rule does not extend to the exclusion of warranties implied by law, where they are not excluded by the terms of the contract. Thus, an express warranty of title does not exclude an implied warranty of quality. Id., note 40, and cases therein cited; Merriam v. Field, 24 Wis. 640; Boothby v. Scales, 27 Wis. 632; Roe v. Bacheldor, 41 Wis. 360; Wilcox v. Owens, 64 Ga. 601; 10 Amer. & Eng. Cyclop. Law, 109. A warranty will not be implied in con- flict with the expressed terms of the agreement ; but there is no con- flict of that kind in this case. The implied warranty that the ma- chinery is fit for the use for which it was purchased is in harmony with the provisions specifying the power of the engine and boiler, and that it should be in good order, except from exposure to the weather at Lcsterville. W T e think the instruction in question was correct, and that those asked by defendant were properly refused. This conclusion is not in conflict with the cases relied upon by ap- pellant, among which are Warbasse v. Card, 74 Iowa, 306, 37 N. W. 383; Mast v. Pearce, 58 Iowa, 579, 8 N. W. 632, and 12 N. W. 597, 43 Am. Rep. 125 ; and Nichols v. Wyman, 71 Iowa, 160, 32 N. W. 258. An examination of those cases will show that they decided, in effect, that the terms of an agreement in writing could not be varied or contradicted by evidence of a parol contemporaneous agreement. No question in regard to warranties implied by law was involved. The judgment of the district court is affirmed. III. Implied Warranty of Title T G( >ULD v. B< lURGEOIS. (Supreme Court <>t New J( L889. -",i \. J, Law, 861, 18 Ail. fit.) i r., J. H This suit was upon a promissory note made by the defendant. Tin- defen e was the want or failure of consideration. 7 i , r discussion "f principles, ee Tiffany, Sales (2d Ed.) s 7. B. 19) 4 Camp. 144; Howard v. Ho Wend. (N. N . | 1, 35 Am. Dec. ?71; Merriam v. Field, 39 Wis. 578; Fish v. I rry, 22 111. -04 CONDITIONS AND WARRANTIES 288, 299; Babcock v. Trice, 18 111. 420, 68 Am. Dec. 560. See Hight v. -Bacon, 126 Mass. 10, 12, 30 Am. Rep. 639 ; Hastings v. Lovering, 2 Pick. 214, 220, 13 Am. Dec. 420. 2. The plaintiffs put in evidence tending to show that the defend- ants never notified them of any defect in the quality or condition of the ice until after this suit. To meet this, the defendants offered a protest, signed and sworn to by one of them on the day the ice ar- rived. This protest was no evidence that the statements contained in it were true, or that the defendants' story was not false. So far as the plaintiffs' evidence was introduced for the purpose of showing such an acceptance of the ice as to bar the defendants from alleging that it did not satisfy the contract, (Morse v. Moore, 83 Me. 473, 22 Atl. 362, 13 L. R. A. 224, 23 Am. St. Rep. 783 ; Gaylord Manuf'g Co. v. Allen, 53 N. Y. 515, 519,) the protest, of course, had no bear- ing. And, although it did show that the defendants' story was not an afterthought, it was properly excluded, the plaintiffs, so far as ap- pears, not having taken that specific point. Wallace v. Story, 139 Mass. 115, 29 N. E. 224. Exceptions sustained. VI. Implied Warranty in Sale by Sample u GOULD v. STEIN. (Supreme Judicial Court of Massachusetts, 1889. 149 Mass. 570, 22 N. E. 47, 5 L. It. A. 213, 14 Am. St. Rep. 455.) Action by Henry A. Gould and others against Abe Stein and others for breach of warranty on the sale of certain rubber. Judgment for plaintiffs. Defendants except. C. Allen, J. The determination of this case depends upon the construction to be given to the bought and sold notes, which were similar in their terms. It does not admit of doubt that these notes were intended to express the terms of the sale. They were carefully prepared and were read to the parties line by line, as they were writ- ten. Of course all the existing circumstances may be looked at, but the contract of the parties is to be found in what was thus written, when read in the light of those circumstances. The goods respecting which the controversy has arisen were a certain lot of rubber which the defendants had on hand, and which could be identified. The transaction was a present sale, and not an agreement to deliver rubber in the future. The defendants now contend that the contract was executory, and that, if there was any warranty, there was none which survived the acceptance of the goods by the plaintiffs; but the argu- is For discussion of principles, see Tiffany, Sales (2d Ed.) § 79. IMPLIED WARRANTY IN SALE BY SAMPLE 205 merit that it was not an executed present sale finds no support in the bill of exceptions, and no such point was taken at the trial ; and there is no occasion to consider the further question whether, in case of an executory agreement to sell, a warranty will survive the acceptance of the goods. The bought note, which the plaintiffs put in evidence, was of "148 bales Ceara scrap rubber, as per samples, viz., 46 bales of first quality marked 'A;' 102 bales of second quality." The con- troversy relates only to the 102 bales. It appeared that there was no exact standard by which the grade of rubber could be fixed, but that it was a matter of judgment. The court also found that Ceara rubber of second quality is well known in the market as distinct from a third or inferior grade; and there was evidence which well warranted this finding. The parties in their contract recognized the existence of different grades or qualities, though all of the rubber properly classified as of first quality or of second quality might not be of an exactly uniform standard or grade. The plaintiffs at the trial claimed damages merely on the ground that the 102 bales were not of second quality, and made no claim of inferiority to the samples shown, as a distinct ground, but waived all claim founded on the exhibition of samples, and the court found dam- ages for the plaintiffs solely on the ground that the defendants failed to deliver rubber of the second quality; ruling that the broker's note contained an absolute warranty of second quality rubber. If this ruling was right, it disposes of the defendants' second and third requests for instructions. The general rule is familiar and admitted that a sale of goods by a particular description imports a warranty that the goods are of that description. Henshaw v. Robins, 9 Mete. 83, 43 Am. Dec. 367; Harrington v. Smith, 138 Mass. 92; White v. Miller, 71 N. Y. 118, 27 Am. Rep. 13; Osgood v. Lewis, 2 Har. & G. 495; Randall v. Newson, L. R. 2 Q. B. Div. 102; Jones v. Just, L. R. 3 Q. B. 197; Josling v. Kingsford, 13 C. B. (N. S.) 447; Bowes v. Shand, L. R. 2 App. Cas. 455. And where goods are described on a sale as of a certain quality, which is well known in the market as indi- cating goods of a distinct, though not absolutely uniform, grade or standard, the description imports a warranty that the g ts arc of that grade or standard. In such cases, the words denoting the grade or quality of the goods are not to be treated as merely words of general commendation, but they are held to be words having a specific com- mercial signification. Thus, in li iv. Lovering, 2 Pick. 214, 13 Am. I )ec. 420, the words, in a sale-note, "Sold 2,000 gallons prime qual ity winter oil," were held to amounl to a warranty thai the articles sold d with the description; and in Henshaw v. Robins, 9 M 87, it was said thai the doctrine laid down in thai case has ever since n considered as the settled law in this commonwealth. So in Chis- holm v. Proudfoot, 15 l '. C. Q. B. 203, it was held thai where a man ufacturer of Hour marked it as of a particular quality, viz., "Trafalgar 206 CONDITIONS AND WARRANTIES Mills Extra Superfine," that amounted to a warranty of its being of such a quality. A similar doctrine may be found in Hogins v. Plymp- ton, 11 Pick. 97; Winsor v. Lombard, 18 Tick. 57, 60; Forcheimer v. Stewart, 65 Iowa, 593, 22 N. W. 886, 54 Am. Rep. 30; Mader v. Jones, 1 N. S. Law R. 82. In Gardner v. Lane, 9 Allen, 492, 85 Am. Dec. 779 ; Id., 12 Allen, 39, it appeared that the statutes provided for the preparation, division into different qualities, packing, inspecting, and branding of mackerel, and it was held' that if a certain number of barrels of No. 1 mackerel were sold, and by mistake barrels of No. 3 mackerel were delivered, no title passed to the purchaser, and that the barrels of No. 3 mackerel thus delivered by mistake might be at- tached as property of the vendor, and that each different quality, after being thus prepared for market, was to he regarded as a different kind of merchandise, so that no title passed to the vendee; there being no assent on the part of the vendee to take the No. 3 mackerel in place of those which he agreed to buy. Now, if the words "as per samples" had not been in the bought note, it would be quite plain that the present case would fall within the ordinary rules above given. But the insertion of those words raises the inquiry whether they limit the implied warranty of the vendor, so that if the rubber sold was equal in quality to the sample he would be exonerated from liability, though it was not entitled to be classed as of the second quality. If no> other meaning could be given to the words "as per samples" except that they alone were to be considered as show- ing the quality of rubber to be delivered, the argument in favor of the defendants' view would be irresistible. So if there was a plain and necessary inconsistency between the two descriptions of the rubber, it might perhaps be successfully contended that the vendor's obligation was only to deliver rubber which would conform to the inferior quality described ; that is to say, that in case of such inconsistency, the words "as per samples" should prevail, and the words "of second quality" be rejected. If it were to be held that the vendor's obligation was fulfilled by delivering rubber of a quality equal to the samples, though it was not of the second quality, then the words "of second quality" would mean nothing, or they would be overborne by the words "as per samples." But if it is found that the bought note admits of a reason- able construction by which a proper significance can be given both to the words "as per samples" and also to the words "of second quality," there will be no occasion to disregard either. Cases are to be found in the books where such a construction has been given to contracts of sale. Thus, in Whitney v. Boardman, 118 Mass. 242, a sale of Cawnpore buffalo hides, with all faults, was held to mean with such faults and defects as the articles sold might have, retaining still its character and identity as the article described ; *and the court cited with approval the case of Shepherd v. Kain, 5 Barn. & Aid. 240, where there was a sale of a copper-fastened vessel, to be taken IMPLIED WARRANTY IN SALE BY SAMPLE 207 ''with all faults, and without allowance for any defects whatsoever," and this was held to mean only all faults which a copper-fastened ves- sel might have, the court saying by way of illustration: "Suppose a silver service sold with all faults, and it turns out to be plated." So, in Nichol v. Godts, 10 Exch. 191, an agreement for the sale and de- livery of certain oil, described as ''foreign refined rape oil, warranted only equal to samples," was held to be not complied with by the tender of oil which was not foreign refined rape oil, although it might be equal to the quality of the samples. The decision of this case has stood in England, though not without some questioning at the bar. ^ce VVieler v. Schilizzi, 17 C. B. 619; Josling v. Kingsford, 13 C. B. (N. S.) 447; Alody v. Gregson, L. R. 4 Exch. 49; Jones v. Just, L. R. 3 Q. B. 197; Randall v. Newson, L. R. 2 Q. B. Div. 102. In the present case, by a fair and reasonable construction of the bought note, effect can be given to both of the phrases used to describe the rubber. Construed thus, the article sold was ^102 bales of Ceara rubber, of the second quality, and as good as the samples. The rubber delivered was in fact Ceara rubber. There was no question that it was of the right kind, but it was not of the second quality. There is no necessity to disregard the words describing the rubber as of the second quality. They signified a distinct and well-known, though not abso- lutely uinform, grade of rubber. There was no exact standard or di- viding line between rubber of the second quality and of the third qual- ity, any more than there is between daylight and darkness. But never- theless a decision may be reached, and it may be easy to reach it in a particular case, that certain rubber is or is not of the second quality. This general designation being given, the specification "as per samples" being also included in the note, the rubber must also' be equal to the san ■ It must be rubber of the second quality, and it musl be equal to the samples. If it fails in either particular, it is of no consequence that it conforms to the other particular. There is no inconsistency in : i a twofold warranty; and, this rubber having been found to be not of the second quality, the warranty was broken, without regard to the que- lion whether or not it was equal to the samples. The fact that the plaintiffs had an opportunity to examine the nil . and actually made such lination as they wished, will nol n irily do .away with the effecl of the warrant)-. The plaintiffs were it- . t bound t<> exercise their skill, having a warranty. They might well (in tin- description of the rubber, if they were content to accepl rubber which should conform \<> thai description. Henshaw v. Rol 9 Men-. 83, 43 \m. Dec. 367; Jones v. Just, I.. R. .> Q. I'.. 197. And the exhibition <>t' a sample is of no greater effect than the giving of an opportunity to in peel the goods in hull:. Nbtwith tanding the sample or the inspection, it i- an implied term of the contract that the goods shall reasonably an wer the description given, in its commercial sense. Drummond v. Van fngen, L. R. 12 App. Ca .284; Mody v. Gregson, 208 CONDITIONS AND WARRANTIES L. R. 4 Exch. 49 ; Nichol v. Godts, 10 Exch. 191. In the two former of these cases it v as held that there might be, and that under the cir- cumstances then existing there was, an implied warranty of merchant- able quality notwithstanding the sale was by a sample, which sample was itself not of merchantable quality, the defect not being discover- able upon a reasonable examination of the sample. The point urged in the defendants' argument, that the plaintiffs' remedy was destroyed by their acceptance of the goods, was not taken •at the trial, and no ruling was asked adapted to raise the question as to the effect of such acceptance. For these reasons, in the opinion of a majority of the court, the entry must be : Exceptions overruled. J. I. CASE PLOW WORKS v. NILES & SCOTT CO. (Supreme Court of Wisconsin, 1895. 90 Wis. 590, 63 N. W. 1013.) See ante, p. 172, for a report of the case. t PEEFOEMAKCE OF COXTIiACT 209 PERFORMANCE OF CONTRACT I. In General x DAVIS v. GILLIAM. (Supreme Court of Washington, 1896. 14 Wash. 206, 44 Pac. 119.) Action by A. L. Davis against Lane C. Gilliam and J. B. Gilliam for breach of contract. From a judgment for defendants, and an or- der denying a new trial, plaintiff appeals. Gordon, J. The complaint in this action alleges that on the 1st day of July, 1890, the appellant (plaintiff below) was the owner of about 800 head of horses, then on what is known as the "Crab Creek Range" in the counties of Adams and Douglas ; that on that day he entered into a contract with the respondents, wherein and whereby he agreed to sell and deliver said horses to them at the rate of $30 per head, the delivery of the horses to be made at the fall round-up of that year. Four thousand dollars of the purchase price was to be paid at the time of making the contract, and the balance in one, two, three, four, and five years. The first payment was to be made by promissory note in the sum of $4,000, dated July 1, 1890, payable one year there- after. The complaint also alleges that on or about the 1st of Septem- ber, 1890, the fall round-up being about to take place, appellant notified the respondents that he was ready to deliver the horses, and requested them to attend at the range for the purpose of receiving them as counted, and that at that time he was ready to deliver the same and proceed with the contract, but that the respondents neglected and re- fused to receive or accept the horses, or proceed any further with the contract; that, at the time of the occurrence of the breach, the band of horses were not worth to exceed $10,000 in value. The respondents answered, denying the several allegations of the complaint, and alleging affirmatively that they were induced to enter into an agreement whereby the appellant agreed to deliver 800 horses of a certain kind and description ton pondents on the 1st day of Sep- tember, L890, for which horses they . I to pay $30 per head; that on the 1st day of September thereafter they were ready and willing to ive and accept the horses in accordance with the terms of their contract of purchase, and for thai purpose attended at the range wl said horses were located, but thai the appellant did not at that time deliver or offer to deliver said hor C . or any of them; and, further, lFor discussion of principles, Bee Tiffany, Bales (2d Ed.) f§ 80, 8L ( tool kv I ' L0K6 Sai.f.h — 14 210 PERFORMANCE OF CONTRACT that the representations of the appellant as to the description and kind of horses which he pretended to own, and to he ahle to sell and de- liver to respondents, were false and fraudulent, etc. The trial resulted in a verdict for the respondents, and from an or- der denying his motion for a new trial, and from judgment upon the verdict, the plaintiff has appealed. The- sole ground relied upon for a reversal is that the court erred in its charge to the jury, and in refusing to give particular instructions requested hy the appellant. The respondents, while not conceding that any error was committed by the trial court cither in giving the instruc- tions complained of or in refusing to give others as requested by appel- lant, insist that the verdict is right under the evidence, and that the appellant failed to show any offer or readiness to deliver the horses in pursuance of the agreement ; and, further, that it affirmatively ap- peared from the testimony that he was not in possession of the horses either at the time of the contract or at the time provided therein for a delivery of the horses, nor until nearly a year thereafter. "It is the practice of most of the courts, before passing upon exceptions to in- structions, to look into the evidence, and see if the verdict was right, and, if it is found to be so, the court will look no further." Thomp. Trials, § 2403, and authorities there cited. After a careful examina- tion of the entire record, we have reached the conclusion that this con- tention of respondents must be upheld. While detached portions might be construed otherwise, still, when considered as a whole, the testi- mony clearly and unmistakably shows that the appellant was never in a position to carry out his contract by delivering the horses prior to July, 1891, and that in the meantime about 100 of the band had been shipped out of the state, and disposed of. Appellant's own testimony shows that, at the time of entering into the contract, the horses were in the possession of one Glasspoole, who claimed an interest in them ; that one of the respondents, at Appellant's request, accompanied appellant to the range where the horses in ques- tion were located at or about the time of the round-up, but that appel- lant was unable to deliver any of the horses to respondents at that time because of the refusal of Glasspoole to surrender possession of them ; that thereupon they returned to the city of Spokane, distant some 75 miles from the range, where, on the 27th day of August, 1890, the ap- pellant entered into a written contract with Glasspoole, a copy of which contract was attached to the deposition of Glasspoole, and put in evi- dence by appellant. This contract recited that the property, to wit, "a certain band of horses, supposed to contain about 800 head, * * * now on the Crab Creek range, etc., are part of the same band and its increase bought by the first and second parties [Glasspoole being party of the first part, and the appellant party of the second part, to said contract] and John Davis from J. L. Dow," etc. In said contract said Glasspoole agreed to sell his interest in and to said property to the ap- DELIVERY OF WRONG QUANTITY 211 pellant, in consideration of the appellant's delivering to Glasspoole re- spondents' note for $4,000, and a bond of appellant with sufficient sure- ties to insure the prompt payment to said Glasspoole of said note at maturity. This contract also provided that Glasspoole should remain in possession of the horses until their exact number should be ascer- tained by counting, etc., and until payment was made as therein pro- vided. It further appears from the testimony of appellant that the $4,0w0 note (executed by respondents), which, under the terms of the contract with Glasspoole, appellant was required to deliver to Glass- poole before he could obtain possession of the horses, was at that time held by the First National Bank of Walla Walla, where appellant had theretofore pledged it as collateral to his own note for something over $3,000 ; and it further appears that, up to the time of the trial, he had not procured the return of said $4,000 note ; and that Glasspoole con- tinued in the possession of all of the horses until July, 1891, in the meantime shipping about 100 of the horses out of the state to the state of Illinois, where they were sold. Such was the condition of the case made by the appellant. It seems plain that, to entitle the appellant to a recovery, the testimony should have shown an ability upon his part to deliver the horses in question in accordance with the terms of the contract. The undisputed proof, as we think, however, shows that he was wholly unable to make a de- livery because of the interest which Glasspoole owned in the horses, coupled with his refusal to surrender possession of them. It follows that, if any error was committed in the charge of the court, it was wholly immaterial. It is a familiar rule that a good verdict cures all errors and irregularities in the proceedings, and that errors growing out of a charge are always to be disregarded when "the verdict is so plainly in accordance with the evidence that it follows as a conclusion of law thereon." Thomp. Trials, § 2403. It appearing to us, From a consideration of the entire record, that substantial justice has been done, the judgment appealed from will be affirmed. II. Delivery of Wrong Quantity BR< iWNFIELD v. J< 'NX'S' »\ T . (Supreme Court <>f Pennsylvania, 1889. 128 Pa. 264, L8 ah 543, 6 L. i: A. 18.) See ante, p. 108, for a report of the i i or discussion of principles, see Tiffany, Bales (2d Ed.) H 86-88. 212 PERFORMANCE OF CONTRACT III. Delivery by Installments PROVIDENCE COAL CO. v. COXE. (Supreme Court of Rhode Island, 1S9G. 19 R. I. 3S0, 582, 35 Atl. 210.) Action by the Providence Coal Company against Coxe Bros. & Co. Judgment for plaintiff. Defendants move for a new trial. Matteson, C. J. This is assumpsit on a written contract, of which the following is a copy : "Providence, July 2nd, 1892. Sold Providence Coal Co., to be shipped to Providence, R. I., 10,000 tons Beaver Meadow pea coal, @ $1.85 per ton f. o. b. Cash, 30 days. Not insured. To be shipped, viz. : Barge load immediately ; bal- ance in equal monthly proportions before Feby. 1st, 1893; subject, however, to strikes, or any other unavoidable delay caused in shipping same. Coxe Bros. & Co., per F. J. Hartshorne." A jury trial was waived, and the case heard by the common pleas division. Decision in favor of the plaintiffs was given for a part of their claim, where- upon the defendants filed their petition for a new trial, alleging that the decision was erroneous. We think the common pleas division erred in holding the contract to be severable. It is a single contract for the sale of one entire quan- tity of coal, to wit, 10,000 tons. The subsidiary provisions relative to shipments and payment did not have the effect to split it into as many distinct contracts as there were to be separate shipments or de- liveries. Norrington v. Wright, 115 U. S. 188, 204, 6 Sup. Ct. 12, 29 L. Ed. 366; Iron Co. v. Naylor, 9 App. Cas. 434. The common pleas division found, on the evidence, that the plaintiffs, though constantly urged by the defendants to furnish barges for the transportation of the coal according to the custom and course of dealing between them, or to allow the defendants to procure barges for that purpose for the plaintiffs, did not do so, and did not take the coal which was by the terms of the contract to be shipped in the months of July, August, September, October, and November, but received only 572.2 tons out of the proportions for those months, shipped with an installment of coal purchased under a former contract. We think that each neglect of the plaintiffs to take the shipments of coal for the months mentioned was a breach of the contract which warranted the defendants in canceling it, in the absence of facts tend- ing to show a waiver of the right of the defendants to insist upon such breaches, or some legal justification on the part of the defendants for such breaches. King Philip Mills v. Slater, 12 R. I. 82, 90, 34 Am. Rep. 603. The declaration, which consists of a single count, avers no * For discussion of principles, see Tiffany, Sales (2d Ed.) $ 89. DELIVERY BY INSTALLMENTS 213 facts showing, or tending to show, a waiver by the defendants of their right to insist on the cancellation of the contract for the failure of the plaintiffs to take the proportions of coal stated, nor any legal ex- cuse for the failure, but avers a readiness and willingness at all times, of the plaintiffs, to receive and pay for the coal according to the con- tract. This affirmation of the declaration being negatived by the evi- dence, and the plaintiffs themselves having been in default, it is clear that they were not entitled to recover damages for the refusal of the defendants to ship the proportions of coal for the months of December and January. We think the common pleas division erred in its decision awarding such damages. New trial granted, and case remitted to the common pleas division. On Rehearing. The case which the plaintiffs seek to raise by their reargument, and which they also attempted to make on the original hearing, is not the case made by the declaration. Our opinion was rendered on the dec- laration as it is framed. The declaration avers a readiness and willing- ness of the plaintiffs at all times to receive the installments of coal which the contract required them to receive, and claims damages for the refusal of the defendants to deliver the coal according to the con- tract. The common pleas division found, on the evidence, that, though constantly urged by the defendants to take the coal to be shipped in July, August, September, October, and November, 1892, the plaintiffs neglected to do so, and received but a small portion of one install- ment, shipped with coal under a former contract. The plaintiffs thus being in default, we held that on the declaration, as framed, averring their readiness and willingness at all times to receive the coal accord- ing to the contract, and claiming damages generally as for an entire eh of the contract, they were not entitled to recover for the re- fusal of the defendants to ship the installments of coal for the months of December, 1S92, and January, 1893. We no reason to change our decision. It seems to us that, to raise the question which the plaintiffs seek to raise, the declaration ild set forth that though the plaintiffs neglected to send for and re- ceive the coal required to be shipped during July, August, September, October, and November, 1892, and though the defendants were entitled to rescind the contract on that account, they nevertheless did not rescind it, but treated it as continuing in force, and therefore were bound to deliver to r on their demand, the installments of coal for ember, L892, and January, 1893, and that, though the plaintiffs demanded the installment which the defendants v, i bound to de- liver in December, 1892, the defendants refused to deliver the same, and to deliver any real under the contract, etc. The plaintifl the averment in the declaration of a readiness and willingness on their part to receive the coal may bi 214 PERFORMANCE OF CONTRACT regarded as immaterial, and rejected as surplusage. We do not think that it can be so treated. The declaration proceeds on the theory that the contract was an entire contract. In that view, the averment of a readiness and willingness to receive the coal, or, in other words, to perform the contract by the plaintiffs, was a condition precedent to the right to recover. The case which the plaintiffs now seek to estab- lish is that the contract, though an entire contract, is so far separable that its installments or deliveries may be treated as separate or inde- pendent stipulations of the contract, so that the plaintiffs are entitled to sue, notwithstanding the fact that they were not ready and willing to perform the entire contract on their part, for such of the installments as they had been ready and willing to receive, because the plaintiffs had not elected to treat the contract as at an end, and had not rescinded it, before the demand by the plaintiffs for an installment of the coal deliverable under the contract at the time of the demand. CRESSWELL RANCH & CATTLE CO. v. MARTINDALE. (Circuit Court of Appeals, Eighth Circuit, 1S91. 63 Fed. 84, 11 C. C. A. 33.) In Error to the Circuit Court of the United States for the Western District of Missouri. Action by William Martindale and Thomas J. Price against the Cresswell Ranch & Cattle Company, Limited, for a breach of contract to deliver cattle. The district court rendered a decree for the plain- tiffs. Defendant appeals. Before Caldwell and Sanborn, Circuit Judges, and Thayer, District Judge. Sanborn, Circuit Judge. If the vendee of personal property, to be delivered and paid for in installments, refuses, upon the demand of the vendor, to accept and pay for a substantial part of an install- ment according to the contract, will the fact that he does so in good faith, and in the belief that he is not required by the contract to receive any of the property so rejected, deprive the vendor of his right to refuse to further perform the contract on his part? This is the prin- cipal question presented by this case. September 19, 1892, the Cresswell Ranch & Cattle Company, Lim- ited, a corporation, the plaintiff in error, sold to William Martindale and Thomas J. Price, the defendants in error, 5,021 steers, 1,321 of which were to be delivered not later than October 20, 1892, and the remaining 3,700 at the rate of 1,000 each week, commencing October 24, 1892. The vendees agreed to pay $28 per head for the cattle, and at the date of the contract paid $5,000, which was to be applied to the pavment for the cattle as they were delivered at the rate of $1 per head. The 3,700 cattle were part of a herd of cattle owned by the vendor that was on a range in Texas, 40 miles square, and the DELIVERY BY INSTALLMENTS 215 contract provided that when any installment of these cattle was ready to load upon the cars the vendees should he notified, and might cut out any of the steers gathered that did not weigh 900 pounds. After the 1.321 cattle and two installments of the 3,700 had been delivered and paid for, making in all 2,2S9 steers, the parties met on November 14, 1892, for the fourth delivery, and the vendor tendered, and de- manded that the vendees should receive, 980 steers that weighed over 900 pounds each, and that complied with the other requirements of the contract. The vendees cut out and refused to accept or pay for 282 of these cattle, on the ground that they did not weigh 900 pounds each, but accepted and paid for the remaining 698. Before the time for another delivery arrived, the vendor notified the vendees that they had violated the contract on their part by rejecting the 282 steers, and that the cattle company would deliver no more cattle to them there- under. The vendees then brought this suit for damages for the fail- ure of the vendor to deliver the remainder of the cattle specified in the contract, and for the balance of the $5,000 not yet applied to the merit for the cattle already delivered. The vendor answered that the vendees had committed the first breach by failing to receive and pay for the 282 cattle tendered November 14, 1892. At the close of the trial the court instructed the jury, in effect, that the mere fact that the vendees refused to accept the steers that com- plied with the- contract on November 14, 1892, did not relieve the vendor of its obligation to make tender of the remainder of the 5,021 steers due under the contract, if the jury further found that the ven- dees made the rejection in good faith, in the belief that the rejected steers did not come up to the requirements of the contract. The court also refused to charge, as requested by the vendor, that the rejection of these steers entitled it to treat this action as a breach of the con- tract, and that, if the vendor notified the vendees that it so elected in a reasonable time after the rejection, the latter could not recover. The court also instructed the jury that, although they found that the vendor tendered and the vendees refused to accept cattle that fulfilled the requirements of the contract, yet, if the vendor had subsequently waived that breach of the contract, the vendees could recover dam. for the failure of the vendor t<> make the subsequent deliveries. There was a verdict and judgment for the vend or damages for the fail- ure of the vendor to deliver th< dm- subsequent to Nbvi mbi r II. 1. tint the jury found that tin- 282 st< ndered and rejected on thai day fulfilled the requirements <>f the contract, and gave the vend "ii account of th The verdicl does not hether the jury found that the vendees' breach of the eon I on November II. 1892, \\ use they made it in ■ \ faith or because the vendor had waived it. The contracl on which this action was based was an entire contract. It was a contract for the £ 5,021 cattle for $140,588, and the aid at the time the contract Was in. ide was paid -16 PERFORMANCE OF CONTRACT on account of the entire purchase. The subsidiary provisions of the contract, that the price was $28 for each steer, and that there were to be five deliveries of the cattle, no more made as many contracts of this one as there were to be installments of cattle delivered than it made as many as there were cattle to be delivered. Norrington v. Wright, 115 U. S. 188, 203, 6 Sup. Ct. 12, 29 L. Ed. 366; Iron Co. v. Nay lor, 9 App. Cas. 434, 439. Nor was the vendees' breach of this contract slight or in an immaterial part. It was substantial, and went to the very root of the contract. It consisted in their refusal to accept 282 cattle, and to pay $7,896 for them, at the time and place they agreed to accept and pay for them under the contract. These cattle had been gathered by the vendor from a range 40 miles square by the labor of many men for many days and driven near to the rail- road station to be delivered to the vendees. Their refusal to take them imposed upon the vendor the necessity of gathering other cattle from this extended range in the same manner to carry out its contract in the face of the fact that the vendees had refused to accept nearly three hundred cattle that complied with its provisions. ' A plaintiff cannot maintain his action for the breach of a contract made with him by a defendant unless he can establish such performance on his part as will entitle him to demand performance of the defendant. A prior substantial breach of the contract on the plaintiff's part is ordinarily a conclusive answer to an action for a subsequent breach on the de- fendant's part. In their complaint the vendees recognized this prin- ciple, and alleged that they "have in all things kept and performed the said contract upon their part," but that the cattle company, on November 19, 1892, refused to perform on its part. The verdict does not rest, however, upon proof of this prior perform- ance on the part of the vendees, but upon the facts that, before they charge any breach upon the cattle company, they had themselves failed to perform a substantial part of the contract, but that they then in good faith believed that they were not so failing. Nor was this exer- cise of good faith and belief by mistake, or without notice of the fact. It was a willful and determined exercise of faith. The vendor insisted, at the time, that these cattle weighed over 900 pounds each, weighed some of them in the presence of one of the vendees on some defective scales that indicated that its claim was well founded, and demanded that the vendees should accept them. All this may not have demonstrated the weight of the cattle, though it seems to have proved it to the satisfaction of the jury, but, although the judgment of the vendor's agent was liable to be at fault, and although the scales were defective, this was ample warning to the vendees to determine the weight of these cattle in some way correctly before they rejected them. They had, by the express terms of the contract, reserved to themselves the exclusive privilege of rejecting cattle that did not in fact weight 900 pounds, and by that very provision they had imposed DELIVERY BY INSTALLMENTS 217 upon themselves the duty of determining the fact, and of rejecting, at their peril, those whose weight exceeded that amount. The provision of the contract which presents this question is that the vendees may cut out "any objectionable steer that may not weigh 900 pounds." It was perfectly competent for these parties to this con- tract to have provided in it that the vendees might cut out and reject any steer that in their judgment weighed less than 900 pounds, or any steer that they in good faith believed weighed less than 900 pounds. This they did not do. They provided that the vendees might cut out those steers 'that in fact weighed less than 900 pounds each. There is a well-known and accurate standard and method for measuring the weight of cattle and most mercantile commodities, and contracting parties know when they make their contracts what the standard is, and what the method is, and that neither of them will probably change. But there is no accurate test, standard, or method by which the belief of vendees as to the weight of the articles they purchase can be meas- ured, and no one can know in advance what such a belief may be. The belief of the defendants in error in this case was, according to the verdict of the jury, too far from the fact to authorize its substi- tution in this contract for the actual weight, for out of 980 cattle that weighed over 900 pounds each they believed that more than 28 per cent, of them weighed less. To substitute in this contract, for the actual weight, the judgment or belief in good faith of the vendees on that subject as the standard by which to determine what steers were heavy enough to comply with the terms of the contract, would be to make a new contract for these parties, — a contract they neither made nor intended to make, and one which the verdict shows would have been far more beneficial to the vendees than was the actual contract. It is not claimed that this can be done. But it is insisted that, although the good faith and belief of the vendees cannot be made the standard to determine the exi e of the breach of this contract, yet they may be interposed to deprive that breach of some of its ordinary legal effects. But that as effectually makes a new contract for the parties as to substitute the vendees' bi as to the weight for the actual weight. The established rights and remedies for the breach (if an agreement are as effectually contra* for as the performance of the acts stipulated. One of the rights of the vendor under this contract was to refuse to perform sul quenl acts stipulated after the vendees had refused to perform a sub- stantia] part of the contracl on their part. This right is given by the law for hi, protection to the party i<> a contracl againsl whom the first breach I 1 n committed. No sound rea on occurs t<> us why its - made dependenl <>ii the l; 1 faith or belief of him who firsl breaks the ■ ' >n the other hand, there are ■ nt p i ontrary. First. It i the breach itself, and not tli. 1 faith or belief the party who commits it, thai i and mea ures the damage of 218 PERFORMANCE OF CONTRACT the injured party. The injury to the vendor in the case before us was not less because the vendees broke the contract in good faith, in the belief that they were not breaking it. Nor did the fact that they broke it in good faith, in the belief that they were complying with it, raise any presumption that they would not continue to do so. On the other hand, this fact presented the guaranty of word and of act that i hey would continue to break it. Second. The rights and remedies of parties for breaches of civil contracts ought not to depend on the good faith and belief of those who violate them, because these are so difficult to ascertain. The proof of the existence or absence of such good faith and belief is peculiarly within the knowledge and control of the violators them- selves. Frequently they alone know what they believe, and whether or not they are acting in good faith. It would always be difficult, and often impossible, to establish their bad faith or their belief that they were violating their contracts, without their testimony, and gen- erally impossible to do so with it. The rights and remedies of par- ties for the breach of civil contracts ought not to be so placed at the mercy of those who break them. It would be intolerable that parties to continuing contracts should be compelled to perform them on their part until they could prove that the other contracting parties, who were constantly breaking them, were doing so in bad faith, and in the belief that they had no right to do so. Our conclusion is that the right of a party to a continuing con- tract to refuse to make subsequent performance on his part, after the other contracting party has refused, upon full notice and demand, to perform a substantial part of the contract on his part, is not de- pendent on the good faith of the latter, nor on his belief that he is not violating the contract, but rests solely upon the fact whether or not he has violated or failed to perform a substantial part of the contract that the agreement required him to perform. Norrington v. Wright, 115 U. S. 188, 204, 205, 6 Sup. Ct. 12, 29 L. Ed. 366; Filley v. Pope, 115 U. S. 213, 6 Sup. Ct. 19, 29 L. Ed. 372; Rolling-Mill v. Rhodes, 121 U. S. 255, 261, 264, 7 Sup. Ct. 882, 30 L. Ed. 920; Beck & Pauli Lithographing Co. v. Colorado Milling & Elevator Co., 3 C. C. A. 248, 52 Fed. 700, 703, 10 U. S. App. 465, 470; Philip Mills v. Slater, 12 R. I. 82, 34 Am. Rep. 603 ; Smith v. Lewis, 40 Ind. 98 ; Hoare v. Rennie, 5 Hurl. & N. 19; Pope v. Porter, 102 N. Y. 366, 371. 7 N. E. 304; Dwinel v. Howard, 30 M)e. 258; Robson v. Bohn, 27 Minn. 333, 344, 7 N. W. 357; Reybold v. Voorhees, 30 Pa. 116, 121; Stephenson v. Cady, 117 Mass. 6, 9; Branch v. Palmer, 65 Ga. 210; Fletcher v. Cole, 23 Vt. 114, 119. In Norrington v. Wright, supra, most of the authorities cited by counsel for the defendants in error in this case in support of their contention that the failure of the vendees to accept a part of one installment of the cattle would not authorize the vendor to refuse to make the subsequent deliveries, are carefully reviewed, and disap- DELIVERY BY INSTALLMENTS 2l'J proved or distinguished from cases like that hefore us. It would be idle to review them here again. In that case 5.000 tons of iron rails were sold to be shipped at the rate of about 1,000 tons per month. The vendor shipped 400 tons the first month and 885 tons the second, when the defendant refused to accept the rails, because the shipments had been less than 1,000 tons per month. The vendor shipped the remainder of the rails, and sued for damages for the fail- ure of the vendee to accept them. The supreme court held that he could not recover, and stated the rule to be: "A statement descriptive of the subject-matter, or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty, in the sense in which that term is used in insurance and maritime law ; that is to say, a condition precedent, upon the failure or nonperform- ance of which the party aggrieved may repudiate the whole contract." An attempt is made to distinguish this case from that at bar, be- cause in the former the default occurred in the delivery of the first installment, and in the latter in the acceptance of the fourth install- ment. But it is a distinction without any substantial difference. The reason why the vendor could not recover in Norrington v. Wright was that he had committed the first breach of the contract, and that relieved the vendee from subsequent performance on his part. For the same reason the breach committed November 14, 1892, relieved the cattle company from any subsequent performance on its part. If a default on the first installment by one party relieves the other < tracting party from the performance of all the stipulations of the contract, by so much the more will a default on a later installment relieve him from all subsequent performance. It is the first breach which he commits, and not the number of the particular installment to which it relates, that defeats the plaintiff, in these actions. Thus in Robson v. Bohn, supra, a contract was made May 19, 1873, for the sale of 425,000 feet of lumber, to be delivered at the rate of 20,000 per week from the date of the contract, and the defendant agreed to give his promissory note for $3,000 at that time, to pay $2,000 in h August 1, 1873, and to pay the balance on the full delivery of the lumber. ive his note for $.3,000. The vendor delivered the lumber weekly until August 1, 1873. The vendee then failed to pay the $2,< : in cash, and the court held thai the refusal of vendee to pay thi the vendor Erom the delivery of any lumber subsequent ti To the same i are Dwinel v. Howard and Id v. Vborhees, supra. The rul neral I he who commits the ubstantial breach of a contract cannol tain an action again other contracting pari lent failure to perform, and it rules this ca e. Finally, il i the cattle company waived the breach committed by the vendee , and that, even it' there in the ruction we ha ■. il ••> a error without prejud and the judgment should be affirmed. The claim of a waivi 1'L'O PERFORMANCE OF CONTRACT upon the fact that the cattle company received payment November 14, 1892, for the 698 cattle that the vendees accepted, and the claim that its agent then told the vendees to come at some later date for more cattle, and arrange to gather and deliver them. It is difficult to see how the cattle company waived any of its rights by insisting upon its acknowledged right to deliver and receive payment for the 69S cattle the vendees accepted, especially in view of the fact that these cattle were, according to the verdict, worth several hundred dol- lars more than the contract price which the vendees paid for them, and they could have lost nothing by taking them If the company had received payment for the 282 cattle that were rejected, there might have been some ground for the claim of waiver here. Nor is it easy to see how the statement that the vendees might come at some future day for more cattle, or any action the vendor took to gather and ship them, could work a waiver, when the cattle company notified the vendees, before they started to come for these cattle, that they need not do so, and that it would deliver no more cattle to them under this contract. There seems to be nothing in all this that could have in- duced the vendees to act or omit to act to their prejudice. We have grave doubts whether the evidence in this case is sufficient to sustain a verdict of a waiver of this breach by the cattle company if it were rendered. But it is unnecessary to determine that question here. That ques- tion, and the question whether or not the vendees committed the breach in good faith, in the belief that the rejected steers did not comply with the requirements of the contract, were submitted to the jury under instructions to the effect that, if they answered either in the affirmative, the vendees could recover, although they did commit the first breach of the contract. The verdict shows that the jury found that the vendees committed the first breach, and that they must have answered one of these two questions in the affirmative. But it does not show which one. Such a verdict cannot be upheld where there is more than one issue tried, and upon any one of them error is committed in the admission or rejection of evidence, or in the charge of the court, because it may be that the jury founded their verdict upon the very issue to which the erroneous ruling related, and that they were controlled in their finding bv that ruling. Coal Co. v. John- son, 6 C. C. A. 148, 56 Fed. 810; State of Maryland v. Baldwin, 112 U. S. 490, 492, 5 Sup. Ct. 278, 28 L. Ed.. 822. There are other questions discussed in the briefs, but, as the case must be retried, and these questions may not arise upon a second trial, it is unnecessary now to notice them. The judgment is accord- ingly reversed, with costs, and the cause remanded, with directions to grant a new trial. DELIVERY TO CARRIER 221 IV. Delivery to Carrier 4 WHEELHOUSE v. PARR. (Supreme Judicial Court of Massachusetts, 1SS6. 141 Mass. 593, 6 N. E. 7S7.) This was an action of contract to recover $440.22 for a lot of leath- er sold to defendant. Hearing in the superior court, which found for the plaintiff, and the defendant appealed. The facts appear in the opinion. D evens, J. Where goods ordered and contracted for are not de- livered directly to the purchaser, but were to be sent to him by the vendor, and the vendor delivers them to the carrier, to be transported in the mode agreed on by the parties, or directed by the purchaser; or where no agreement be made, or directions given, to be transported in the usual mode; or where the purchaser, being informed of the mode of transportation, assents to it; or where there have been pre- vious sales of other goods to the transportation of which, in a simi- lar manner, the purchaser has not objected, — the goods, when de- livered to the carrier, are at the risk of the purchaser, and the prop- erty is deemed to be vested in him, subject to the vendor's right of stoppage in transitu. This proposition assumes that proper direc- tions and information are given the carrier as to forwarding the goods. Whiting v. Farrand, 1 Conn. 60; Ouimby v. Carr, 7 Alien, 417; Finn v. Clark, 10 Allen, 484; Finn v. Clark, 12 Allen, 522; Downer v. Thompson, 2 Hill (N. Y.) 137; Foster v. Rockwell, 104 Mass. 170; Odell v. Boston & M. R. R., 109 Mass. 50; Wigton v. ley, 130 Mass. 252. The defendant had made a purchase of leather in November pre- vious to the purchase of that the price of which is in controversy, under a direction to plaintiff to "ship to care of D. and C. Mclver, shipping merchants, Liverpool, as soon as possible, for their next nner t< ton, direct." This shipment was made as ordered, and on Di ber 3, 1884, the defendant sent a further ord mil;: "A- regards tin- shipping of the leather, just received, you have done rything satisfactory. Shi]) this order in like manner,"- adding some directions as to marking the pai . not here important. The directions by which the plaintiff was i . » be controlled inn 1 interpreted as requiring him to forward the goods to Mclver & Co., to be transported by them by the Cunard line, <<\~ which they were managers and agents. The words "their next steamer" could not have meant a earner which would accept freight from Mclver & Co. Ca i s may 1m- readily imagined where these words would he « I or d Iod <»f prin< Iples, see Tiffany, Bales (2d Ed I B \, 9L 222 PERFORMANCE OF CONTRACT of the highest importance; as if the defendant had an open policy of insurance protecting his goods, which might be sent by the Cunard line. It might also be true that defendant would not deem a policy of insurance necessary where goods were sent by a well-established passenger line, where greater precautions might probably be taken Eor safety, which he would deem necessary when they were sent by a purely freighting steamer. The goods were actually forwarded to Mclver & Co., with instructions in conformity with the directions of the defendant; and, had the matter ended there, so far as any direc- tion to Mclver & Co. is concerned, the plaintiff would be entitled to treat them as delivered to the defendant, and to require him to pay the purchase money. If, on the other hand, while the goods were vet in the hands of the carrier, and before transportation of them had commenced, the plaintiff changed the directions as given to him by defendant, or authorized the carrier to transport them in a different mode from that directed by defendant, and loss has thereby occurred, he cannot claim that they were delivered to defendant by him. By continuing to exercise dominion over them, and by giving a new di- rection, impliedly withdrawing the directions previously given, he cannot be allowed to assert that he had made a complete delivery by his original act, if a loss has occurred by reason of that which he has subsequently done or directed. The change in the direction given relates back to and qualifies the original delivery. The plaintiff, in answer to a letter from Mclver & Co., after the goods had reached them, inquiring whether they were to keep the goods "for our steamer on the 14th, or ship by the Glamorgan," or- dered them to be shipped by the steamer arriving out first, presum- ably the steamer which Mclver & Co. believed would be first to ar- rive. The Glamorgan was not a steamer of any line of which Mclver & Co. were owners or agents, and in no way answers the descrip- tion of "their steamer" as applied to Mclver & Co. By neglecting to limit the authority of Mclver & Co. to send by a steamer which could be thus described, and by directing them to send by the steam- er which would first arrive, the plaintiff had failed to comply with the orders of the defendant as to the shipment of goods ; and if cor- rect directions had originally been given, had withdrawn them, and substituted others. When, therefore, exercising the authority thus given by plaintiff, Mclver & Co. sent by the Glamorgan, as being, in their judgment, the steamer likely to arrive the first, and a loss oc- curs, it should not be borne by the defendant, whose directions have not been followed. Judgment for defendant. DELIVERY TO CARRIER 223 KELSEA v. RAMSEY & GORE MFG. CO. (Court of Errors and Appeals of New Jersey, 1893. 55 N. J. Law, 320, 26 Atl. 907, 22 L. R. A. 415.) Action on a contract by Joseph U. Kelsea against the Ramsey ec Gore Manufacturing Company. Plaintiff had judgment, and de- fendant brings error. Van Svckhl, J. 5 It appears in the case that the defendants, who live in Paterson, N. J., made a valid contract in March, 1890, with the plaintiff, who is a bobbin manufacturer in New Hampshire, un- der which the latter was to manufacture 6,000 bobbins and send th to the defendants at Paterson. The following are the controlling- facts in the case: The contract was made in March, 1890, and the plaintiff at once commenced to make the bobbins. On the 28th of March, 1890, the defendants wrote to one Wilkius, who had intro- duced them to the plaintiff, requesting him to tell the plaintiff to stop the order for the time being. It does not appear that the con- tents of this letter were communicated to the plaintiff. On the 2 l Hh of March, 1890, Wilkins replied to the letter of the defendants, ask- ing them to explain why they wished to have the order canceled. The case shows no reply to this letter. On the 6th of June, 1890, the plaintiff shipped to defendants by railroad 1,400 bobbins, and on July 25, 1890, the balance of the 6,000 were shipped in same way. Both lots arrived safely in Paterson, and on the 14th of August, 1890, the defendants wrote to the plaintiff that they would not accept or pay for them. This suit was instituted to recover the price agreed upon when the order was given. * * * The third ground of defense is that the order to stop for a til terminated the plaintiff's right to fill the order, but to this I cannot agree. His right, under the contract, was to proceed at once with the manufacture of the goods, and to make delivery within a reason- able time. The defendants had no right to require him to stop temporarily, and could not, by such notice, change the plaintiff's rights under the contract. The fourth ground relied upon by the defendants is the debatable . and thai is thai there was no acceptance by the defendanl ;, and therefore that the title did not pass to defendants, and the price con- sequently cannol be sued for; thai the only remedy of the plaintiff Is an action of damage for nonacceptance. If the question in this i was whether there was delivery and acceptance to take the ease out of the statute of fraud-, it would be clear thai the plaintiff could nol tver, for there wa a refusal to accept, In this case the contract conceded to be a valid contracl in writing, and the question p sented is the narrower one, whether there was such a delivery as the title to the venders, so that they may he held for the pur Part <>f the opinion is omll ted. 224 PERFORMANCE OF CONTRACT chase price. The vendor claims that the delivery of the goods to the common carrier constituted a delivery to the purchasers, and passed the title to them, subject only to the right of stoppage in transitu. It is not asserted that the receipt by the carrier constitutes accept- ance by the vendees ; it is only a delivery, not an acceptance. That the carrier, in the absence of authority to accept, represents the pur- chasers only to receive and forward. Although the cases upon this subject are not entirely in accord, the authorities generally hold that a delivery to a common carrier of the goods, properly addressed to the vendee, is a delivery to the vendee, subject to the vendor's right of stoppage in transitu, and to the vendee's right to reject for nonconformity to the contract. Brown v. Hodgson, 2 Camp. 37; Dutton v. Solomonson, 3 Bos. & P. 582 ; Dunlop v. Lambert, 6 Clark & F. 600 ; Fragano v. Long, 4 Barn. & C. 219; Dawes v. Peck, 8 Term R. 330; Krulder v. Ellison, 47 N. Y. 36, 7 Am. Rep. 402 ; Silver Plate Co. v. Green, 72 N. Y. 17; Spencer v. Hale, 30 Vt. 316, 73 Am. Dec. 309; Stanton v. Eager, 16 Pick. 467; Hunter v. Wright, 12 Allen, 548; Hall v. Richardson, 16 Md. 396, 77 Am. Dec. 303 ; Magruder v. Gage, 33 Md. 344, 3 Am. Rep. 177; 1 Benj. Sales, §§ 161, 181; Story, Sales, § 306; 2 Kent, Comm. 499. The distinction is made in some of these cases that, in order to give to the delivery to the carrier the effect of a delivery to the buyer, the carrier must be selected or named by the buyer. When the contract of the manufacturer is simply to make the goods at an agreed price, he has fully executed the agreement on his part when the goods are produced at his factory, ready to be delivered on demand. In that case, however, he is not authorized by the ven- dee to deliver them for transportation. But when the purchaser in- structs the vendor to send the goods to him it does not appear how it makes any difference in the rule applicable to the case whether he names the carrier or not. If the carrier is not specified, the vendor, acting in this respect under the order of the purchaser to forward the goods, is his agent in the selection of the carrier, and in either case the carrier is, in contemplation of law, chosen by the purchaser. In this case the purchasers expressly instructed the plaintiff to send the goods from New Hampshire to Paterson. When the goods passed out of the possession of the plaintiff into the hands of the car- rier, who must be regarded as the agent of the purchasers to trans- port them, the transfer of the title to the purchasers 'became complete, and all the rights of ownership in them passed to the purchasers. If the carrier had converted the goods to his own use, the defendants could have maintained an action for them; or if there had been a loss in transit it would have fallen on them. In my opinion, there- fore, the vendor was entitled to recover the contract price, and the judgment below should be affirmed. buyer's eight to examine goods 225 V. Buyer's Right to Examine Goods 6 MURPHY v. SAGOLA LUMBER CO. (Supreme Court of Wisconsin, 1905. 125 Wis. 363, 103 N. W. 1113.) Action by A. M. Murphy and another against the Sagola Lumber Company. From a judgment for plaintiffs, defendant appeals. This is an action for the breach of a contract for the sale and de- livery of a quantity of lumber. The plaintiffs are box manufactur- ers doing business at Green Bay, and the defendant is a corporation manufacturing lumber at Sagola, Mich. On the 4th of September, 1902, the parties entered into the following written contract : "Green Bay, Wisconsin, September 4, 1902. Sagola Lumber Company, Sagola, Mich. — Gentlemen : We agree to pay to the Sa- gola Lumber Company, $10.00 per M for one million feet of No. 4 Boards, F. O. B. Sagola, same grade and thickness as we have been getting in the past, to be no inferior in any way, and to be ship- ped as ordered when in shipping condition. We to advance the ola Lumber Company, $5,000.00 to hold said lumber until we are ready to have same forwarded to us. It is also understood that three-quarters of this lumber is dry, or will be at the time it is wanted. The above purchase is to hold good with the understand- ing we are able to get a rate of 7V2 C - or stop-over rate that will not exceed 7\^z. Murphy Box Company, E. N. Murphy, Mgr. "We accept the above. Sagola Lumber Company. John O'Calla- ghan, President." 7 Winslow, J. The trial court held that the defendant breached the contract by refusing to forward lumber until the plaintiffs for- warded the last half of the consideration. Were there no other facts bearing upon the refusal to forward the lumber, we should have no difficulty in agreeing with the conclusion, but there are other undis- puted facts which seem to us of paramount importance, ami which demonstrate that the plaintiffs first breached the contract. The contract v. nple and easily understood. It provided for the purchase by the plaintiffs and the delivery by the defendant of 1,000,000 feel of lumber in parcels as ordered. The lumber was to be put "free on board" it al Sagola. This was plain- \ it and delivery by the defendant. When tins was done, the title pa — 1 to the plaintiffs, and the lumber was at their risk-, it' it corn ponded in quality with the provisions of the contract, and t! is no claim thai it did not. The amounl of lumber t" he paid for n For 6 on "f principles, see Tiffany, Salea (2d Ed.) S§ [)2, 93. f Tin- tatemenl of tacts Is abi Id i i. Cooj i v Cv-i S.\i i -15 226 PERFORMANCE OF CONTRACT was necessarily the amount put upon the cars at Sagola (provided it conformed with the contract), not the amount taken off the cars at Green Bay. Hence, under the terms and necessary implications of the contract, while the plaintiffs might tally the lumber at Green Bay on its arrival, and this tally would be some proof of the amount loaded on the cars at Sagola, they had no right to say that they would only pay for the amount received at Green Bay. If such was the definite position taken by them during the progress of shipments, it was a breach of the contract, for the contract was to pay for the amount put onto the cars at Sagola. We think that the evidence very clearly shows that such was their position and claim. When the shipment of November 18th was re- ceived, they at once sent back a statement showing that it was 480 feet short, and deducting the shortage from the defendant's credit. The defendant wrote, requesting the plaintiffs to send a man to Sagola to tally out a lot with defendant's man, if there could be no agree- ment on the tally. To this letter plaintiffs made no reply, but on January 23d, following, sent to defendant a voucher for the amount then shipped in excess of the first half million feet, deducting the alleged shortage, and required a receipt in full of the account before it would be paid. This seems a very clear indication that the plain- tiffs claimed that delivery was to be made at Green Bay, and that they would only pay for the amount actually received at that point. That this was their position is further evidenced by plaintiffs' letter of January 20th, in which they say they will pay as cars are received and unloaded ; also by the testimony of one of the plaintiffs, who said, "We refused to pay for any of the lumber until it was received by us in Green Bay." Of course, the plaintiffs had a right to inspect the lumber received at Green Bay, and reject the same if not in ac- cordance with the contract. They also had the right to tally it, and such tally would be some evidence as to the amount actually delivered by loading on the cars at Sagola. But they had no right to insist that they would only pay for the amount received at Green Bay, re- gardless of the amount loaded on cars at Sagola. This latter posi- tion was clearly the position which they took. When this position was definitely taken by the plaintiffs, late in January, 1903, shipments were suspended for a time ; but it is evident that the plaintiffs did not regard it as a final suspension, for on the 18th of February they re- quested the defendant to ship the balance of the lumber. In reply to this the defendant again suggested that, if there were to be differences in the tally, it would be better to have the tally cor- rected at Sagola. The plaintiffs rejected this suggestion as unneces- sary, and the defendant on February 21, 1903, declined to ship unless plaintiffs agreed definitely to accept inspection and tally at Sagola as final, or advance $5,000, when they would proceed to ship all. The defendant had already submitted to the slight cut which plaintiffs made on the November shipment, by accepting the money sent in ACCEPTANCE I'll January in full, but we do not regard this act as foreclosing it from insisting on the proper construction of the contract as to future ship- ments. The ground had been taken by plaintiffs that the lumber was to be delivered at Green Bay, and that only the lumber so de- livered was to be paid for ; and the defendant, by the letters last quoted, substantially took the ground, which we believe to be the proper one, that under the terms of the contract the lumber was de- livered when loaded on cars at Sagola, and must be paid for if of the quality required. Viewed in the light of all the circumstances, the plaintiffs' letters can only be construed as a demand that the lumber be delivered at Green Bay, and that only lumber so delivered would be paid for, when the contract provided for its delivery at Sagola. This was an announcement that they declined to carry out the contract according to its terms, and the defendant thereupon had the right to refuse to further execute the contract on its part. Nor were the rights of the parties affected by the offer of the defendant to deliver at Green Bay on condition that advance payment be made for the balance of the lumber. This amounted simply to an offer to vary the terms of the contract, which was not accepted by the plaintiffs. The conclusion reached upon this question renders unnecessary any consideration of the custom found by the jury, or of any of the other questions dis- cussed by counsel. The defendants were entitled to judgment upon the evidence and the verdict, and, the proper motion for judgment having been made in the trial court, there is no necessity for further trial. Judgment reversed and action remanded, with directions to enter judgment for the defendant dismissing the complaint. VI. Acceptance 8 BAGBY v. WALKER. (Curt of Appeals of Maryland, L893. 78 Md. 239, 27 Atl. 1033.) See ante, p. 44, for a report of the case. - For di cu '"ii of principles, see Tiffany, Bales (2d Ed.) 5 !»t. 228 PERFORMANCE OF CONTRACT VII. Excuses for Nonperformance of Conditions • 1. Renunciation of Contract ROEHM v. HORST. (Supreme Court of the United States, 1900. 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953.) This was an action for breach of four certain contracts, brought by Paul R. G. Horst and others against John Roehm in the circuit court of the United States for the eastern district of Pennsylvania, in Janu- ary, 1897, and was tried under a stipulation, waiving a jury, before Dallas, circuit judge, who made a special finding of facts, and, on the facts so found, gave judgment for plaintiffs. 84 Fed. Rep. 565. The case was carried by defendant to the circuit court of appeals for the third circuit, and the judgment of the circuit court was affirmed. 62 U. S. App. 520, 91 Fed. Rep. 345, 33 C. C. A. 550. Thereupon Roehm applied to this court for a writ of certiorari, which was granted, and the cause subsequently heard here. The opinion of the circuit court of appeals stated the case thus : "In August, 1893, Paul R. G. Horst, E. Clemens Horst, and Louis A. Horst, trading as Horst Brothers, entered into a contract with John Roehm, the defendant below, for the sale of 1,000 bales of prime Pa- cific coast hops, to be delivered at various dates in the future, at an uniform price of 22 cents per pound. Of the whole quantity 600 bales had been delivered, accepted, and paid for at the contract price, so that in July, 1896, there remained undelivered 400 bales. These were de- liverable at the rate of 20 bales per month during each month from October, 1896, to July, 1898, both inclusive, excepting, however, from said period the months of August and September, 1897, when no de- liveries were called for. The record shows that this contract was the result of one negotiation, and provided for a supply of hops for five years. Ten separate papers were drawn, each covering a period of five months or one season. They all bear the same date and are similar as regards the quantity of hops to be delivered and the price to be paid. They differ only in the time of delivery and the year's crop from which delivery was to be made. "In June, 1896, the firm of Horst Brothers was dissolved by the re- tirement of Paul R. G. Horst. He assigned his interest in the Roehm contract to the remaining partners, who continued the business under the same firm name. Roehm, the defendant below, was notified of this dissolution of the firm and of the transfer of Paul R. G. Horst's e For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 97-99. EXCUSES FOE NONPERFORMANCE OF CONDITIONS 229 interest in the contract to its successors. He thereupon gave notice to the firm that he considered his contract canceled thereby. Subsequent- ly the firm of Horst Brothers advised the defendant of their ability and willingness to perform the contract, and under date of September 4, 1896, wrote Roehm, as follows : " 'Dear Sir: Will you please write us whether you wish us to ship the hops under your contract direct to your city ? The contract calls for delivery m Xew York, and as we ship direct from this coast we can ship to either city at same rate. Consequently there will be a saving to you of freight if we ship to your city direct from here. Awaiting your reply, we are, " 'Very truly. Horst Brothers.' "To this letter Roehm replied, under date of September 14, 1896: " 'Dear Sirs : In response to your letters dated 3d and 4th inst., state that before shipping me any hops always send me samples from which I can select lots, the same as you have been doing in the past. " 'Very truly, John Roehm.' "On October 9, 1896, Horst Brothers advised Roehm of the ship- ment of 20 bales of hops for the October delivery, as called for by the contract, which Roehm, by telegraph, refused to receive, and as supple- mentary thereto sent the following letter, dated October 24, 1896: " 'Gentlemen : Yours of October 9, inclosing bill of lading and bill of particulars per 20 bales of hops forwarded me under the terms of contract of August 25, 1893, was received, and I have wired you that I decline to receive the same. I notified you under date of June 27, 1896, that, owing to the dissolution of the copartnership with which I originally contracted and the fact that this firm was no longer in exist- ence, I considered my contract at an end, and will make arrangements for purchasing my supplies elsewhere. I am advised that I am under no obligations by that contract to accept supplies from you. If you desire to bill these goods at the current market rate under a new con- tract, I will accept them if upon inspection they are of the quality de- sired; otherwise they will remain at the freight station subject to your order. " 'Very truly yours, John Roehm.' "No further efforts were made by Horst Brothers to make delivery under the contract, but ill January, 1897, this action was begun by all the original parties thereto, to the use of the linn as at present con- stituted, to recover damages for its breach. Judgmenl was rendered in >r of the plaintiffs." Mr. Chief Justice Fuller delivered the opinion of the court: 10 It is conceded that the contri I oul in the finding of facts were four of ten simultaneous contracts, for 100 hales each, covering the furnishings of l.'KK) bales of hops during a period of five years, of ip The statement of facta la rewritten and pari of the opinion is omitted 230 PERFORMANCE OF CONTRACT which 600 bales had been delivered and paid for. If the transaction could be treated as amounting to a single contract for 1,000 bales, the breach alleged would have occurred while the contract was in the course of performance ; but plaintiffs' declaration or statement of de- maud averred the execution of the four contracts, "two for the pur- chase and sale of Pacific coast hops of the crop of 1896, and two for the purchase and sale of Pacific coast hops of the crop of 1897," set them out in extenso, and claimed recovery for breach thereof, and in this view of the case, while as to the first of the four contracts, the time to commence performance had arrived, and the October shipment had been tendered and refused, the breach as to the other three con- tracts was the refusal to perform before the time for performance had arrived. The first contract falls within the rule that a contract may be broken by the renunciation of liability under it in the course of performance and suit may be immediately instituted. But the other three contracts involve the question whether, where the contract is renounced before performance is due, and the renunciation goes to the whole contract, and is absolute and unequivocal, the injured party may treat the breach as complete and bring his action at once. Defendant repudiated all lia- bility for hops of the crop of 1896 and of the crop of 1897, and noti- fied plaintiffs that he should make (according to a letter of his attor- ney in the record that he had made) arrangements to purchase his stock of other parties, whereupon plaintiffs brought suit. The question is therefore presented, in respect of the three contracts, whether plain- tiffs were entitled to sue at once or were obliged to wait until the time came for the first month's delivery under each of them. It is not disputed that if one party to a contract has destroyed the subject-matter, or disabled himself so as to make performance impos- sible, his conduct is equivalent to a breach of the contract, although the time for performance has not arrived ; and also that if a contract provides for a series of acts, and actual default is made in the perform- ance of one of them, accompanied by a refusal to perform the rest, the other party need not perform, but may treat the refusal as a breach of the entire contract, and recover accordingly. And the doctrine that there may be an anticipatory breach of an ex- ecutory contract by an absolute refusal to perform it has become the settled law of England as applied to contracts for services, for mar- riage, and for the manufacture or sale of goods. The cases are ex- tensively commented on in the notes to Cutter v. Powell, 2 Smith, Lead. Cas. 1212, 1220, 9th edition by Richard Henn Collins and Ar- buthnot. Some of these, though quite familiar, may well be refer- red to. In Hochster v. De la Tour, 2 El. & Bl. 678, plaintiff, in April, 1852, had agreed to serve defendant, and defendant had undertaken to em- ploy plaintiff, as courier, for three months from June 1st, on certain EXCUSES FOR NONPERFORMANCE OF CONDITIONS - :> >L terms. On the 11th of May, defendant wrote plaintiff that he had changed his mind, and declined to avail himself of plaintiff's servi Thereupon, and on May 22d plaintiff brought an action at law for breach of contract in that defendant, before the said 1st of June, though plaintiff was always ready and willing to perform, refused to engage plaintiff or perform his promise, and then wrongfully exon- erated plaintiff from the performance of the agreement, to his dam- age. And it was ruled that as there could be a breach of contract be- fore the time fixed for performance, a positive and absolute refusal to carry out the contract prior to the date of actual default amounted to such a breach. In the course of the argument, Mr. Justice Crompton observed : "When a party announces his intention not to fulfil the contract, the other side may take him at his word and rescind the contract. That word 'rescind' implies that both parties have agreed that the contract shall be at an end, as if it had never been. But I am inclined to think that the party may also say: 'Since you have announced that you will not go on with the contract, I will consent that it shall be at an end from this time ; but I will hold you liable for the damage I have sus- tained ; and I will proceed to make that damage as little as possible by making the best use I can of my liberty." " In delivering the opinion of the court (Campbell, C. J., Coleridge, Erie, and Crompton, JJ.), Lord Campbell, after pointing out that at common law there were numerous cases in which an anticipatory act, such as an act rendering the contract impossible of performance, or disabling the party from performing it, would constitute a breach giv- ing an immediate right of action, laid it down that a positive and un- qualified refusal by one party to carry out the contract should be treated as belonging to the same category as such anticipatory acts, and said : "But it is surely much more rational, and more for the benefit of i parties, that, after the renunciation of the agreement by the de- lant, the plaintiff should be at liberty to consider himself absolved 'i any future performance of it, retaining his right to sue for any damage he i ffered from the breach of it Tims, instead of remain- idle and laying out money in preparations which must be lie is at liberty to seek service under another employer, which would go in mitigation of the damag vhich he would otherwise be entitled for a breach of the contract I that the defendant, after »ntract and absolutely declaring that he will never act under it. should i litted to object that faith is given to hi tion, and thai an opportunil ol Left to him of changing his mind. If tl irred of any remedy by entering into an i i inconsistent with starting as a i with the defendant on the It Jui e, he is prejudiced by putting faith in thi ertion; and it would be moi onant with principle if the defendant were i;i- performance of contract precluded from saying that he had not broken the contract when he de- clared that he entirely renounced it. Suppose that the defendant, at the time of his renunciation, had embarked on a voyage for Australia, so as to render it physically impossible for him to employ the plaintiff as a courier on the continent of Europe in the months of June, July, and August, 1852; according to decided cases, the action might have been brought before the 1st June; but the renunciation may have been founded on other facts, to be given in evidence, which would equally have rendered the defendant's performance of the contract impossible. The man who wrongfully renounces a contract into which he has delib- erately entered cannot justly complain if he is immediately sued for a compensation in damages by the man whom he has injured; and it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait till the time when the act was to be done, still holding it as prospectively binding for the exercise of this option, which may be advantageous to the innocent party, and cannot be prejudicial to the wrongdoer. An argument against the action before the 1st June is urged from the difficulty of calculating the damages ; but this ar- gument is equally strong against an action before the 1st of Septem- ber, when the three months would expire. In either case, the jury in assessing the damages would be justified in looking to all that had happened, or was likely to happen, to increase or mitigate the loss of the plaintiff down to the day of trial. We do not find any decision contrary to the view we are taking of this case." * * * In Johnstone v. Milling, L. R. 16 Q. B. Div. 467, Lord Esher, Mas- ter of the Rolls, puts the principle thus : "When one party assumes to renounce the contract, that is, by anticipation refuses to perform it, he thereby, so far as he is concerned, declares his intention then and there to rescind the contract. Such a renunciation does not, of course, amount to a rescission of the contract, because one party to a contract cannot by himself rescind it, but by wrongfully making such a renunci- ation of the contract he entitles the other party, if he pleases, to agree to the contract being put an end to, subject to the retention by him of his right to bring an action in respect of such wrongful rescission. The other party may adopt such renunciation of the contract by so act- ing upon it as in effect to declare that he too treats the contract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation." Lord Justice Bowen said (p. 472) : "We have, therefore, to consider upon what principles and under what circumstances it must be held that a promisee, who finds himself confronted with a declaration of in- tention by the promisor not to carry out the contract when the time for performance arrives, may treat the contract as broken, and sue for the breach thereof. It would seem on principle that the declaration of such intention by the promisor is not in itself and unless acted on by the promisee a breach of the contract; and that it only becomes a EXCUSES FOE NONPERFORMANCE OF CONDITIONS 233 breach when it is converted by force of what follows it into a wrongf .1 renunciation of the contract. Its real operation appears to be to give the promisee the right of electing either to treat the declaration as brutum fulmen, and, holding fast to the contract, to wait till the time for its performance has arrived, or to act upon it and treat it as a final assertion by the promisor that he is no longer bound by the contract, and a wrongful renunciation of the contractual relation into which he has entered. But such declaration only becomes a wrongful act if the promisee elects to treat it as such. If he does so elect, it becomes a breach of contract, and he can recover upon it as such." The doctrine which thus obtains in England has been almost univer- sally accepted by the courts of this country, although the precise point has not been ruled by this court. In Smoot's Case, 15 Wall. 36, 48, sub nom. United States v. Smoot, 21 L. Ed. 107, 110, Mr. Justice Miller observed: "In the case of Phill- potts v. Evans, 5 Mees. & W. 475, the defendant, who had agreed to receive and pay for wheat, notified the plaintiff, before the time, of de- livery, that he would not receive it. The plaintiff tendered the wheat at the proper time, and the only question raised was, whether the meas- ure of damages should be governed by the price of the wheat at the time of the notice or at the time of the tender. Baron Parke said : T think no action would have lain for the breach of the contract at the time of the notice, but that plaintiff was bound to wait until the time of delivery to see whether the defendant would then receive it. The defendant might have chosen to take it and would have been guilty of no breach of contract. His contract was not broken by his previous declaration that he would not accept.' And though some of the judges in the subsequent case of Hochster v. De la Tour, 2 El. & Bl. 678, dis- approve very properly of the extreme ground taken by Baron Parke, they all agree that the refusal to accept, on the part of the defendant, in such case, must be absolute and unequivocal, and must have been acted on by the plaintiff." * * * In Dingley v. Oler, 117 U. S. 490, 29 L. Ed. 9S4, 6 Sup. Ct. 850, it was held that the case did not come within the rnle laid down in Hochster v. De la Tour, but within Avery v. Bowdcn and Johnstone \. Milling, since, in the view entertained by the court, there was not a renunciation of the contract by a total refusal to perform. So in Cleveland Rolling Mill v. Rhodes, l-'l U. S. 255, 264, 30 L. Ed. 920, 923, 7 Sup. Ct involving a contract for the delivery of iron ore, the court said: "The nec< ary conclusion is that the defend- ant was justified in refusing to accept any of the iron shipped in 1881 : and whether the notice previously given by the defendanl to the plain tiff, that it would not accept under the contract any iron made after December 31, 1 lit have been treated by the plaintiffs as a re- nunciation and a breach of the contract, need not he considered, bi cause the plaintiffs did not act iq on it as Mich." 234 PERFORMANCE OP CONTRACT In Anvil Min. Co. v. Humble, 153 U. S. 540, 38 L. Ed. 814, 14 Sup. Ct. 876, performance had been commenced, but completion was prevented by defendant, and Mr. Justice Brewer, speaking for the court, said : ''Whenever one party thereto is guilty of such a breach as is here attributed to the defendant the other party is at liberty to treat the contract as broken and desist from any further effort on his part to perform; in other words, he may abandon it, and recover as damages the profits which he would have received through full per- formance. Such an abandonment is not technically a rescission of the contract, but is merely an acceptance of the situation which the wrong- doing of the other party has brought about." * * :;: In Hancock v. New York L. Ins. Co. Fed. Cas. No. 6,011, Hochster v. De la Tour was followed by Bond, J., in the circuit court for the eastern district of Virginia; and in Grau v. McVicker, 8 Biss. 13, Fed. Cas. No. 5,708, Drummond, J., fully approved of the principles decided in that case, and remarked: "It seems to me that it is the better rule to hold that the party who has refused to perform his con- tract is liable at once to an action, and that whatever arises afterwards, or may arise in consequence of the time not having come or not having expired, should be considered in estimating the damages." * * * The great weight of authority in the state courts is to the same effect. * * * The rule is disapproved in Daniels v. Newton, 114 Mass. 530, 19 Am. Rep. 384, and in Stanford v. McGill, 6 N. D. 536, 38 L. R. A. 760, 72 N. W. 938, on elaborate consideration. The opinion of Judge Wells in Daniels v. Newton is generally regarded as containing all that could be said in opposition to the decision of Hochster v. De la Tour, and one of the propositions on which the opinion rests is that the adop- tion of the rule in the instance of ordinary contracts would necessitate its adoption in the case of commercial paper. But we are unable to as- sent to that view. In the case of an ordinary money contract, such as a promissory note, or a bond, the consideration has passed ; there are no mutual obligations; and cases of that sort do not fall within the reason of the rule. In Nichols v. Scranton Steel Co., 137 N. Y. 487, 33 N. E. 566, Mr. Justice Peckham, then a member of the court of appeals of New York, thus expresses the distinction : "It is not intimated that in the bald case of a party bound to pay a promissory note which rests in the hands of the payee, but which is not yet due, such note can be made due by any notice of the maker that he does not intend to pay it when it matures. We decide simply this case where there are material provisions and obligations interdependent. In such case, and where one party is bound, from time to time, as expressed, to deliver part of an aggregate and specified amount of property to another, who is to pay for each parcel delivered at a certain time and in a certain way, a refusal to be further bound by the terms of the contract or to accept further de- EXCUSES FOE NONPERFORMANCE OF CONDITIONS 235 liveries, and a refusal to give the notes already demandable for a por- tion of the property that has been delivered, and a refusal to give any more notes at any time or for any purpose in the future, or to pay moneys at any time, which are eventually to be paid under the contract, all this constitutes a breach of the contract as a whole, and gives a pres- ent right of action against the party so refusing to recover dam:. which the other may sustain by reason of this refusal." We think it obvious that both as to renunciation after commencement of performance and renunciation before the time for performance has arrived, money contracts, pure and simple, stand on a different footing from executory contracts for the purchase and sale of goods. The other proposition on which the case of Daniels v. Newton was rested is that until the time for performance arrives neither contracting party can suffer any injury which can form a ground of damages. Wells, J., said: "An executory contract ordinarily confers no title or interest in the subject-matter of the agreement. Until the time arrives when by the terms of the agreement he is or might be entitled to its performance, he can suffer no injury or deprivation which can form a ground of damages. There is neither violation of right, nor loss upon which to found an action." But there are many cases in which, before the time fixed for per- formance, one of the contracting parties may do that which amounts to a breach and furnishes a ground of damages. It has always been the law that where a party deliberately incapacitates himself or ren. performance of his contract impossible, his act amounts to an injur the other party, which gives the other party a cause of action for breach of contract ; yet this would seem to be inconsistent with the reasoning in Daniels v. Newton, though it is not there in terms decided "that an absolute refusal to perform a contract, after the time and un- der the conditions in which plaintiff is entitled to require performance, is not a breach of the contract, even although the contract is by its terms to continue in the future." Parker v. Russell, 133 Mass. 74. in truth, the opinion goes upon a distinction between cases of re- nunciation before the arrival of the time of performance and tl of renunciation of unmatured obligations of a contract while it is in course of performance, and it is said that before the argument on the ground venience and mutual advantage to the parties can pi erly have weight, "the point b eached mu : be shown t< nt with logical deductions from the strictly legal aspects of the hink that there can be no controlling distinction on this point am the two classes ol d thai it is proper to consider I hat the absolute n nunciatii m of ] lar contrai stitutes such a breach a- to ju tify i Hon and n for. The parties to a contract which is wh< ■ utory have a rir the opinion is omitted. 238 RIGIIT OF UNrAID SELLER AGAINST THE GOODS in consequence of facts occurring- after the vendee gave his original notes. The agreement to give credit for 90 days after each install- ment of lumber was placed in a deliverable condition, and had been inspected and estimated, was wholly inconsistent with any right of the vendor to retain possession until the price was paid. The duty of immediate delivery, credit having been given was wholly inconsist- ent with a right to hold as security for the purchase price. * * * Thus, after the execution to the vendor of the promissory notes of the vendee, the title or right of property and the right of possession to the lumber embraced within each monthly settlement were vested in Barker & Co. The actual, manual possession was with the Met- ropolitan Lumber Company, which was under obligation to deliver to the buyer as delivery should be required. Delivery could not be refused unless one of two things should occur before the actual pos- session was surrendered, namely, insolvency of the buyer or non- payment of the price when the credit expired. In case of the hap- pening of either of these contingencies before the actual possession of the lumber passed from the seller to the buyer, the vendor's lien, which had been waived by a sale on a credit, would revive, and the vendor might lawfully retain his possession until the price was paid. Even if goods have been delivered to a carrier consigned to the ven- dee, and insolvency occurs before they reach the actual possession of the buyer, the vendor may exercise the right of stoppage in tran- situ to recover his possession, and thereby revive his lien. The right of stoppage in transitu is but an equitable extension or enlargement of the vendor's lien, and is not an independent or distinct right. 2 Benj. Sales (Corb. Ed.) §§ 1229-1245 ; Loeb v. Peters, 63 Ala. 249, 35 Am. Rep. 17; Babcock v. Bonnell, 80 N. Y. 244. In the very well considered case of White v. Welsh, 38 Pa. 420, it was said by the court that: "Judges do not ordinarily distinguish between the retainer of goods by a vendor and their stoppage in tran- situ on account of the insolvency of the vendee, because these terms refer to the same right, only at different stages of perfection and exe- cution of the contract of sale. If a vendor has a right to stop in tran- situ, a fortiori he has a right of retainer before any transit has com- menced." "The rule is," said the court, "that so long as the vendor has the actual possession of the goods, or as long as they are in the custody of his agents, and while they are in transit from him to the vendee, he has a right to refuse or countermand the final delivery, if the vendee be in failing circumstances." Unless, therefore, the actual possession had been surrendered be- fore the alleged change in the contract, to be hereafter considered, the vendor's lien would revive, in case insolvency occurred before de- livery or the period of credit expired and the price was unpaid. The effect upon the vendor's right of the expiration of the period of credit, while the actual possession is with the vendor is thus stated: "When goods have been sold on credit, and the purchaser permits them to seller's lien 2.".0 remain in the vendor's possession till the credit has expired, the ven- dor's lien, which was waived by the grant of credit, revives upon the expiration of the term, even though the buyer may not be insolvent." Benj. Sales (Corb. Ed.) § 1227. This revesting of the lien is not affected by the fact that the seller had received conditional payment by promissory notes or bills of exchange, nor by the fact that such notes or bills had been nego- tiated so that they were outstanding when they matured, or unmatu and outstanding when the insolvency occurred. Benj. Sales (Corb. Ed.) §§ 1130-1185, and note 4; Valpy v. Oakeley, 16 Q. B. 941 ; Grif- fiths v. Perry, 1 El. & El. 680; Grice v. Richardson, L,. R. 3 App, Cas. 319; White v. Welsh, 38 Pa.- 420; Wanamaker v. Yerkes, 70 Pa. 443; Arnold v. Delano, 4 Cush. (Mass.) 33, 50 Am. Dec. 754; Townley v. Crump, 4 Adol. & E. 58. The liability of defendant in error as indorser on such notes as had been negotiated operated to continue the relation of an unpaid vendor. The right of retention is not a right of rescission, and it is not es- sential to the revival of the lien that the notes of the purchaser shall be delivered up or ready for delivery, though in Arnold v. Delano, cited above, it seems to have been so regarded. If, after the revival of the vendor's lien by expiration of the credit, the seller extended further credit by taking renewal notes, payable at a future date, the revived lien would be waived, unless there was some agreement that this further credit should not have that effect, and that the seller should hold the property as security for the renewal notes. Tin of things seems to have been contemplated by the parties; for, by one of the clauses of the original contract, a provision was made for renewals or extensions for such time as the lumber in the actual p session of the vendor when an extension was granted should "re- main in the possession" of the lumber company, "not exceeding nin days." The reasonable construction to be placed upon this provi is that the revived lien, resulting from the expiration of the original credit, should not be waived by renewal of purchase notes and an extension of credit. Before such extension, the buyer undoubtedly had the right of property and right of possession. A fur such re- newals, all right of possession till the renewal notes were paid was lost. Independently of the agi il that extended credit should not waive the lien which had been revived by expiration of original credit, the insolvency which occurred during the running of the r< nev al m would operate to revive the suspended lien, and, between vendor and vendee, or a subvendee standing on no higher ground than the vendee, the defendant in error bad a right to hold thi m till the newal notes were paid. The authorities alreadj cited fully sustain this position. Aside from all questions arising on the alleged modification of N T o- vember 14, 1892, and all questions of i toppel, the rights of the fendant in error, in the actual i ion of lumber which had nol -40 RIGHT OF UNTAID SELLER AGAINST THE GOODS been paid for, would not be affected by a sale to a third person. Such a subvendee would buy subject to the right of the vendor to hold pos- session as security for renewal notes; and, without regard to this special agreement, a subvendee would take subject to the possibility that before possession was obtained the lien might be revived by in- solvency of the vendee or expiration of the stipulated credit. These considerations lead us to the conclusion that the rights of the plain- tills in error, as subvendees, must, as the learned judge who presided at nisi prius instructed the jury, depend either upon questions of estoppel or upon the legal effect of the modification in the contract as defeating any right of lien in the vendor. * * * This brings us to the legal effect of the alleged modifications of November 14, 1892, upon the rights of the parties; for, unless that modification materially changed the agreement, the renewals allowed in February following would continue a vendor's lien for the secu- rity of the renewal notes. Concerning this modification, the evidence tended to show that the mill of defendant in error closed down about the 1.1th or 12th of November, 1892. All the lumber theretofore cut, except such as was sawed after October 31st, had been inspected and settled for by the notes of the vendee. The lumber sawed between October 31st and the closing of the mill was inspected and estimated under the contract, and was in value something over $9,000. The purchaser was not required, under the contract, to give notes for any lumber until the end of the month. Defendant in error wished, how- ever, to settle up this matter at once, and therefore requested that Barker & Co. would give their notes for this remnant without waiting, as they had a right to do, until December 1st. Barker & Co. were at first unwilling, and the contention of the plaintiffs in error is that Barker & Co. did execute notes for the November cut, upon certain concessions being made. * * * There is no evidence in this record which would justify a finding that there was an agreement that, after the modifications of Novem- ber 14th, the vendors should no longer remain in possession as ven- dors, but should thereafter hold as agent or bailee for Barker & Co. Upon the contrary, the construction placed upon the agreement, after the alleged modifications, by both parties, was wholly inconsistent with any change in the character in which the vendor remained in the actual possession. The claim of Barker & Co. for an extension of credit was made upon the clause providing for renewals while the vendors remained in possession, and the whole correspondence was based upon the theory that the lumber would stand as a security for the renewal notes. On the evidence before the jury, it was not error to assume, as the trial judge did, that at the occurrence of the ven- dee's insolvency, there had been no delivery to the vendee, either actual or constructive. Neither do we think that it would follow, if there was such evidence, that a mere agreement, express or implied, by an unpaid vendor, to hold possession as bailee or agent for the seller's lien 24:1 vendee, would operate as such a delivery to the vendee as to prevent the revivor of the vendor's lien if the vendee should fail before the actual possession was lost. It is to be borne in mind that this right of the vendor springs out of the relation of the parties and the nat- ural equity that the vendor shall not be compelled to complete a con- tract by delivery when the vendee has not paid the price, or by insol- vency becomes unable to carry out his side of the agreement. * * * The conclusion we reach upon the foregoing questions may be sum- marized thus : 1. That the title and right of possession passed to Barker & Co. upon execution of their promissory notes as each month's product of finished lumber was inspected and received. 2. That during the running of the original notes no lien existed, and during the credit the vendees had a right to demand and take actual possession or make subsalcs to third persons. 3. That the lien of the vendor would revive upon expiration of the stipulated credit, without regard to the solvency of the vendee, or upon the insolvency of the vendee before or after maturity of pur- chase notes, and regardless as to whether such notes were outstand- ing or in the hands of the vendor. 4. That the renewal of matured purchase-money notes and the ex- tension of a further credit would operate as a waiver of the lien which had revived upon the expiration of the original credit, unless there was an agreement to the contrary. 5. That the clause providing for renewal notes provided that this extended credit should not operate to waive the revived lien, by pro- \ iding that the lumber should remain in the possession of the ven- dors till the renewal notes were paid. 6. That there was no evidence that the contract was subsequently modified so that the character in which the vendor thereafter held possession should be as bailee for the vendee, and not as vein' 7. That, were it otherwise, such an agreement would not be such a delivery to the vendee, or loss of possession by the vendor, as would prevent the assertion of a vendor's lien upon expiration of the I or second stipulated credit, or upon the insolvency of the vendee he- fore surrender of the actual possession. A fortiori, an agreement that the vendor should renew the vendee's notes and hold po: till payment of the renewed notes would be unaffected by the alleged eement to hold a- 1 ailee for the vendee. The <>ne agreement would he inconsistent with the other during the running of the extended lit, and, betwi ndor and vendee, the agreement under which notes were renewed would freemenl t<> hold as bailee. Entertaining these views, it is clear that, if the defendant in error 1 from a erting a vendor* upon the insolvency of the . it urn t be b the plaintiffs in error have acquired as subpurchasers which th< ■ topped to deny or contravene ilbtCasi Saw i'; 242 RIGHT OF UNrAID SELLER AGAINST THE GOODS by the assertion of a lien. What are these rights, and what is their origin? As mere subpurchasers of lumber in the actual possession of the vendor, they only acquire the right and interest of the vendee. If, at the time they bought, the vendor had no lien, no right of re- tention, then they would acquire the right to demand delivery. But the right of a vendee who has bought on a credit is not an absolute right to demand delivery. The right is dependent upon the preserva- tion of his credit, and, if he becomes insolvent before he obtains actual possession, the lien of the vendor revives, and the insolvent vendee must pay the purchase price before he can deprive the vendor of the goods remaining in his possession. So, if the vendor, for any reason, remain in the actual possession until the period of credit has expired, his lien revives. Now, a subvendee buys only this defeasible right of the vendee ; and, if he does not obtain the actual possession or obtain from the vendor an actual attornment to him, as in Hurry v. Mangles, cited heretofore, and the credit given the vendee expires while the vendor holds the actual possession, or the vendee becomes insolvent, he can- not, in the absence of some estoppel, deprive the unpaid vendor of his actual possession. The rights of subvendees have most often been under consideration in cases involving the doctrine of stoppage in transitu. But the principle is the same where transit has not begun. It was well said in White v. Welsh, 38 Pa. 420, that, "if a vendor has a right of stoppage in transitu, a fortiori he has a right of re- tainer before any transit has begun." Now the right of stoppage in transitu, special legislation out of the way, can only be defeated by the transfer of a bill of lading to an indorsee who bona fide gave value for it. Benj. Sales (Corb. Ed.) § 1285; Lickbarrow v. Mason, 1 Smith, Lead. Cas. (Ed. 1879) 753. It will not be defeated by a mere assign- ment while in transit, or by an attachment by creditors of vendee. Benj. Sales (Corb. Ed.) § 1242; Mississippi Mills v. Union & Plant- ers' Bank, 9 Lea (Tenn.) 318; White v. Mitchell, 38 Mich. 390; Har- ris v. Pratt, 17 N. Y. 249; Umber Co. v. O'Brien, 123 Mass. 12-14; Calahan v. Babcock, 21 Ohio St. 281, 8 Am. Rep. 63; Stanton v. Eager, 16 Pick. (Mass.) 476; Wood v. Yeatman, 15 B. Mon. (Ky ) 273 ; Loeb v. Peters, 63 Ala. 243, 35 Am. Rep. 17. No subsale during transit will defeat the right, unless the bill of lading be transferred. In the late case of Kemp v. Falk, L. R. 7 App. Cas. 573-582, it was said by Lord Blackburn that "no sale, even if the sale had actually been made with payment, would put an end to the right of stoppage in transitu." * * * The best that can be said, favorable to plaintiffs in error, is that on the 5th of June, 1893, they for the first time obtained the title and right of Barker & Co. to the specified lumber involved in this con- troversy. Before the title to any part of this lumber vested, Barker & Co. had failed. Thereupon, the vendor's lien reattached, even as- suming that it had been suspended by reason of the extended credit, seller's LIEN 24o and had not been saved as an effect of the stipulation concerning renewals. * * * If we are right in these conclusions, it follows that defendant in error is entitled to assert its vendor's lien. * * * Affirmed. CRUMMEY v. RAUDENBUSH. (Supreme Court of Minnesota, 1893. 55 Miiiu. 426, 5G N. W. 113.) Action by George B. Crummey against S. W. Raudenbush for breach of contract of sale. Judgment was ordered for defendant, and plaintiff appeals. Mitchell, J. 3 Stated according to its legal effect, the contract, upon which this action was brought, was an executory one for the sale of a piano by defendant to plaintiff, a part of the price being paid at the date of the contract, and the balance to be paid in quarterly in- stallments from and after the date of the delivery of the piano. The action is for damages for a refusal to supply the piano according to the contract. It is not alleged that the balance of the price has ever been paid or tendered, the plaintiff standing on the terms of the con- tract that it was to be furnished on credit. Much of the answer con- sists of entirely irrelevant matters, the only defense alleged being that since the making of the contract the plaintiff had become, and still is, insolvent, and the only important question in the case is whether the defendant has established a defense justifying his re- fusal to deliver the piano on that ground. Where a vendor con- tracts to sell personal property on credit, he thereby agrees to waive his lien for the purchase money; but he does so on the implied con- dition that the vendee shall keep his credit good. If, therefore, be- fore payment, and while the vendor still retains possession of the property, he d < rs that the vendee is insolvent, he may hold the goods as security for the price. The insolvency of the vendee does not rescind the contract, and is not of itself a ground for rescission. (t merely entitles the vendor to demand payment in cash before part- ing with p< ion ol the pr< iperty. ■ differed a to the name to be given to this right, but all recognize i t< ce Like the an ius right of stop e in transitu, it grows oul of the vendor's original ownership, and dominion, and is- founded on the equitable principle that one man's property ought not to go to pay another man's debt. The right is not limited to cases when- the insolvency of the vendee occurred aft the date of the contract, bul exists also even where the insolvency I time, bul was not di ed by the vendor until ards; and, as the | ption on and law is that, where a vendor sold goods on credit, he believed that the purch; 8 Part "i i he opinion la omit ted. 244 RIGHT OF DNrAID SELLER AGAINST THE GOODS was solvent and able to pay, the burden is on the vendee to prove that the vendor had knowledge of the insolvency at the time, and entered into the contract with that knowledge. The right is not af- fected by the fact that part of the price has been paid ; and it makes no difference whether the sale was of a specific article appropriated to the contract, or, as in this case, a contract to supply an article of a certain description. The term "insolvent" is not used in any tech- nical sense. It is not necessary that the vendee should have been adjudged a bankrupt or insolvent, or have made an- assignment of his property. Insolvency, as applied to this branch of law, means a general inability to pay one's debts or to meet one's financial en- gagements. Passing to the facts of this case, an examination of the evidence satisfies us that it amply justified the trial court in finding that the plaintiff was insolvent in the fullest sense of the term. It follows that defendant had a right to refuse to deliver the property without payment in full of the price, provided he properly asserted that right, and had not in some way waived it. The contract was made in April, 1889. The evidence is practical- ly undisputed that for some two years afterwards the defendant was not only able and ready to furnish the piano, but repeatedly urged the plaintiff to come and select an instrument, but that he failed to do so, giving as a reason his inability to meet the payments. Final- ly, in the winter or early spring of 1893, after defendant had ceased to represent that make of piano in the trade, and hence no longer kept it in stock, the plaintiff for the first time formally demanded the delivery of the instrument within a specified time. Failing in some efforts to induce plaintiff to accept a piano of another kind, the defendant required some assurance that, if he procured a piano of the kind called for by the contract, the plaintiff would be ready to pay for it in cash, or give a mortgage on the instrument to secure the purchase price. The plaintiff positively refused to agree to do either, and insisted on the terms of the original contract for the delivery of the property on credit, which defendant as positively refused to do. The evidence would fully justify the conclusion that the defendant was always willing to furnish the piano if plaintiff would pay the price in cash, or secure it by mortgage on the property, and that his refusal merely went to the extent of refusing to furnish it on credit without security. But at no time during the negotiations did de- fendant assign the insolvency of the plaintiff as his reason for de- manding cash or security, or give any special reason for doing so, except that when demanding the mortgage he said it was the custom of the trade. On this ground plaintiff's counsel invoke the doctrine that if a person, when called upon to deliver, places his right to retain the goods upon a ground inconsistent with a claim by virtue of a specific lien, this is a waiver of the lien ; and that on the trial he will not be permitted to rest his refusal on a different and distinct ground from seller's lien 245 that on which he claimed to retain the property at the time of the de- mand. An examination of the authorities on the subject, from the early case of Boardman v. Sill, 1 Camp. 410, down, satisfies us that they all proceed upon principles essentially of equitable estoppel, and limit the application of the doctrine invoked by counsel to cases where the refusal to deliver the property was put on grounds in- consistent with the existence of a lien, or on grounds entirely inde- pendent of it, without mentioning a lien. Thus it has been repcatedlv held that a lien is not waived by mere omission to assert it as the ground of refusal, or by a general refusal to surrender the goods, without specifying the ground of it, except in certain cases, where the lien was unknown to the person making the demand, and that fact was known to the person on whom the demand was made. In such cases, if the ground of the refusal is one that can be removed, the other party ought in fairness to have an opportunity to do so. But no such state of facts exists in this case. While defendant did not specify his vendor's lien by reason of plaintiff's insolvency as the ground of his refusal, yet he never placed his refusal on any ground inconsistent with or independent of it. On the contrary, from first to last, what he insisted on was payment of, or security for, the price of the property ; and the ground of his refusal was the refusal of plaintiff to give either. True, at the last, he announced his positive refusal to furnish the piano unless plaintiff would agree to give a chattel mortgage on it, — a thing which he had no legal right to insist on; but it is very evident that this demand on defendant's part was merely an alternative for payment in cash, which he had a right to demand, but which plaintiff had refused. The plaintiff probably had a right to be informed, as he was, that the property was held for the purchase money, for that was a matter which he could remedy by ment, but it would have availed him nothing to be informed that u'lant's right to retain the property for the price was based on his insolvency, for that was a fact which he could not have changed. We can see nothing in defendant's acts of omission or commission that amounted to a waiver of his title, or which should estop him from now asserting it. * * * Affirmed. 24.6 RIGHT OF UNPAID SELLER AGAINST THE GOODS II. Stoppage in Transitu 4 1. Against Whom Right may be; Ex^rcisSd KINGMAN v. DENISON. (Supreme Court of Michigan, 1S91. S4 Mich. COS, 48 N. W. 2G, 11 L. It. A. 347, 22 Am. St. Rey. 711.) Replevin by Kingman & Co. against William C. Denison and the McCormick Harvesting Machine Company. There was a judgment in defendants' favor, and plaintiffs bring error. Long, J. 5 On July 8, 1889, defendant Denison wrote the plain- tiffs at Peoria, 111., ordering 5,000 pounds of twine. No dealings had ever been had between the parties prior to that time. The plain- tiffs received the letter next day, and at once wrote Denison : "We have entered your order, and twine will go forward to-morrow." On July 11th the twine was shipped to W. C. Denison, Grand Rap- ids, Mich., plaintiffs taking shipping bill from the railroad company there, and on same day sent it to Denison, with statement of ac- count for value of the twine. The twine was received at Grand Rapids by the Grand Rapids & Indiana Railroad Company, July 17th, and on the 18th they turned it over to a teamster, who delivered it at the store which was occupied by Denison at the time the order was made. It appears that on July 9th the Grand Rapids Savings Bank caused an attachment to be levied upon Denison's property. On that evening Denison gave the bank a chattel mortgage on all the goods in the store, and at a warehouse there, and a store situate at another place outside of Grand Rapids. July 10th, 11th, and 12th he gave mortgages on the same property to the bank and several other creditors, two of them being given to the defendant the Mc- Cormick Harvesting Machine Company. The goods mortgaged were held in the store by the agents of the bank until they were sold under one of the mortgages, which was about July 18th, at which time the defendant the McCormick Harvesting Machine Company bid the goods in, and continued to occupy the store, putting Mr. Denison in as their agent. The McCormick mortgage contained a clause, after a description of the property mortgaged, as follows : "And all additions to and substitutes for any and all the above- described property." On September 7th plaintiffs, who had no notice or knowledge of the changed condition of Mr. Denison's affairs, drew on him at sight for the amount of the bill. This draft was not paid, and on September 14th plaintiffs wrote him for prompt remittance, 4 For discussion of principles, see Tiffany, Sales (2d Ed.) §§ 106-109^. e Part of the opinion is omitted. STOPPAGE IN TRANSITU 247 which was not made. On September 19, 1889, plaintiffs brought replevin against the defendants for the twine, finding about one- half of it; the balance having been sold out of the store by the Mc- Cormick Harvesting Machine Company. On the trial of the cause the defendants waived return of the property, and had verdict and judgment against the plaintiff for $351.91, the value of the twine taken, and costs. Plaintiffs bring error. Tlie plaintiffs asked the court to instruct the jury that plaintiffs were entitled to a verdict; and in the ninth request asked an instruc- tion that "if Mr. Denison did not in fact receive the twine at his store, but was not there when it was delivered, and never received and accepted it for his use in any way, except that, finding it in the store, he allowed the mortgagees to assume control of it, plaint ill's could retake it as against him." And in the tenth request it was asked that the jury be instructed that the McCormick Company, as mortgagee, is in no better position than Mr. Denison. Its mortgage does not cover this twine, nor is it a bona iv.lc purchase. The court, in its charge to the jury, stated: "Plaintiff claims the right to the possession of these goods at the time this suit was commenced — First, because they were ordered by Mr. Denison at a time when he was insolvent, and had no intention, or at least no reasonable ex- pectation, of paying for them according to the terms of the con- tract; and counsel also claims the right of stoppage in transit. All I need to say in regard to the latter claim is that I think the right of stoppage in transit, under the facts in this case as shown by the evidence, has no application whatever; there is no such right exist- ing." This part of the charge relating to the right of stoppage in transit is assigned as error. The court was in error in refusing these requests to charge and in the charge as given. It is not seriously contended here but that, under the evidence given on the trial, the defendant Denison was in- solvent at the time the goods were ordered. At leasl this wa question of fact which should have been submitted t»> the jurj ; ami. if so found, the question of the right of stoppage in transit was an im- portant question in (he case. The right of Stoppage in transit is a right possessed by the seller to reassume the possession <>i g Is paid for while on their way to tin- vendee, in case the vendee becomes insolvent before he lias acquired actual possession of them. It i privilege allowed to the seller ior the particular purpose of proteel him from the insolvency of the consignee, The right i^ one highl) I in the law, being based upon the plain reason of justice and equity that on.- man's property should nol lie applied to the payment of another man's debts. Gibson v. Carruthers, 8 Me< i A 337. Bui it is prop, i i ed only upon goods which are in p and ar.- in tin- hand ime intermediate person between the ven dor and vendee in proce i, and tor the pui if delivery, and this right may be exercised whether the insolv* 24S RIGHT OF UNPAID SELLER AGAINST THE GOODS the sale or occurs at any time before actual delivery of the goods, without the knowledge of the consignor. O'Brien v. Norris, 16 Md. 122, 77 Am. Dec. 284; Reynolds v. Railway Co., 43 N. H. 580; Blum v. Marks, 21 La. Ann. 268, 99 Am. Dec. 725 ; Benedict v. Scaettle, 12 Ohio St. 515. This right of stoppage in transit will not be de- feated by an apparent sale, fraudulently made, without consideration, for the purpose of defeating the right. There must be a purchase for value without fraud, to have this effect. Harris v. Pratt, 17 N. Y. 249. In the present case it appears that the goods arrived in Grand Rapids July 17th, and were taken to the store on the 18th. Mr. Denison was not in the store at the time they were taken in. Mr. Talford was in possession of all the goods and of the store at this time for all the mortgagees, and after the sale under the mortgage the McCormick Company took possession, and were in possession at the time this replevin suit was commenced. The testimony tends to show that at the time demand was made upon the McCormick Company and Mr. Denison for the twine Mr. Denison stated that he thought the plaintiff, having heard of his financial affairs, would not ship the twine, and that he did not know it had been shipped until it was in the store ; and he was very sorry it had come, under the cir- cumstances. The McCormick. Company claimed that by the terms of their mortgage they were entitled to hold it. The court was in error in not submitting to the jury the question whether the goods- had come actually to the possession of Mr. Denison. The circum- stances tend strongly to show that he never had actual possession of them, and never claimed them as owner. He had made the order, and was notified that they would be shipped; but from that time forward it is evident that he made no claim to them. The McCor- mick Company claimed that they passed to them under the terms of their mortgage. They, however, stood in no better position than Denison. If the goods never actually came into the possession of Denison as owner, the mortgage lien would not attach, even under the clause in the mortgage covering after-acquired property. They do not stand in the position of bona fide purchasers of the property. The right of stoppage could not be divested by a purchase of the goods under the mortgage sale. The transit had not ended unless there was actual delivery to Mr. Denison. These were questions of fact for the jury, which the court refused to submit. If the jury had found that Denison was insolvent at the time the order was made,, or became insolvent at any time before the claimed delivery of the goods, and that the goods were never actually delivered to the pos- session of Mr. Denison, then the vendors' rights would have been paramount to any right which the McCormick Company could have acquired at the mortgage sale. Underhill v. Booming Co., 40 Mich. 660; Lentz v. Railway Co., 53 Mich. 444, 19 N. W. 138; White v. Mitchell, 38 Mich. 390; James v. Griffin, 2 Mees. & W. 623. STOPPAGE IN TRANSITU 249 In the view we have taken of the case, we think the other ques- tions raised are unimportant, and we will not pass upon them. The judgment of the court below must be reversed, with costs, and new- trial ordered. The other justices concurred. 2. Termination op Transit SYMNS v. SCHOTTEN. (Supreme Court of Kansas, 1SS6. 35 Kan. 310, 10 Pac. S28.) Action by A. B. Symns & Co. against the Emporia Mercantile Association, for goods sold and delivered. Plaintiff attached certain goods in the possession of the Atchison, Topeka & Santa Fe Railroad Company consigned to defendant. Wm. Schotten & Co. intervened, claiming the goods as sellers to the defendant. There was judgment in favor of the interveners, and plaintiff brings error. 8 Johnston, J. The only question to be decided in this case is whether Wm. Schotten & Co., who interpleaded in the action, had a right, under the facts, to reclaim the goods which they had sold to the Emporia Mercantile Association. It is agreed that the goods were sold on credit, and that after the sale, and before their arriv.nl at the point of destination, the consignee became insolvent. The right of the vendors to repossess themselves of the goods at any ti while they were on the road, and prior to their arrival at Emporia, is conceded. But it is claimed that because the goods had reached the tit to which they were shipped, and had been unloaded from tin- cars, and placed in the warehouse of the railroad company, the transitus was at an end, and the vendors' right of stoppage was tinguished. The right of stoppage in transitu is not so limited a one as the plaintiff would make it. It is one which the law Favors, and is said to be founded upon the just principle that one man's pi erty shall not be applied in payment of another man's debts, and the courts have been inclined to encourage, rather than to restrict, the exercise of the right. The general rule is thai the vendor may Btime possession of the goods at any time before they actually reach thepos on of the vendee. This right continues in the vendor, tlOl only while the goods are being carried to die place of con ignment, may be exercised at any time until the delivery to the vendee or nt has been completed. The unloading of the goods, and the placing of them in the ouse "f tin- railroad company, does nol necessarily terminate tin- transitus, nor put an end to the righl « The ■ tatement ot fa< i Is rewi Itten, -50 RIGHT OF UNrAID SELLER AGAINST THE GOODS stoppage ; so long as they remain in the hands of the carrier or mid- dle-men as such, the right does not cease. There may be cases where the possession of the carrier or ware- houseman, after the final destination is reached, will, owing to the agreement of the parties, or the special circumstances of the case, be regarded as the possession of the vendee, and so put an end to the vendor's right of stoppage. But where goods are consigned and shipped in the ordinary way, and the railroad company which brings i hem to the point of delivery, in performance of its duty as carrier, unloads and places the goods in its warehouse awaiting the payment of freight charges before delivery to the vendee, the presumption will be that the goods are still in transit, and that the right of stoppage yet remains in the vendor. In an Ohio case quite analogous to the one at bar, certain goods that had been consigned and shipped in the usual way were transferred by the railroad company to its warehouse at the station to which the goods were consigned, and near to which the vendee resided and did business, there to await the payment by him of the charges thereon as a condition precedent to their removal and delivery at his business house ; and it was held that the transfer did not, ipso facto, constitute a delivery of possession to the vendee, but was to be regarded as a reasonable exercise of the duty by the carrier in the course of their transit, and as connected with the orig- inal employment of the company as agent of the vendor to transport and deliver, and therefore did not preclude the vendor's right of stoppage in transitu. It was recognized that in some instances the carrier or middle-man might become the agent of the vendee, and hold possession for the vendee, but it was said that such "agency will not be implied from the carrier's original employment, and can arise only by showing affirmatively some arrangement or understanding to that effect other than the general words of an ordinary consignment." Calahan v. Babcock, 21 Ohio St. 281, 8 Am. Rep. 63. There is no conflicting authority upon the question presented here, and no neces- sity for a review of the decided cases. Among many others which might be cited in support of the views expressed, we refer to the fol- lowing: Rucker v. Donovan, 13 Kan. 251, 19 Am. Rep. 84; O'Neil v. Garrett, 6 Iowa, 480; Buckley v. Furniss, 15 Wend. (N. Y.) 137; Covell v. Hitchcock, 23 Wend. 611; Harris v. Pratt, 17 N. Y. 249; Loeb v. Peters, 63 Ala. 243, 35 Am. Rep. 17; Newhall v. Vargas, 13 Me. 93, 29 Am. Dec. 489; Inslee v. Lane, 57 N. H. 454; Hoover v. Tibbits, 13 Wis. 79; Atkins v. Colby, 20 N. H. 155; Blackman v. Pierce, 23 Cal. 508. The record of this case discloses nothing from which we might in- fer that the carrier was the agent of the vendee. The goods were sold and consigned in the ordinary course of business between mer- chants, and when they arrived at Emporia they were taken out ot the cars by the railroad company, and placed in its warehouse, and there held, in its character as carrier, to await the payment of charges STOPPAGE IN T TRANSITU 27)1 and a delivery to the consignee. The railroad company had not de- livered the goods to the vendee, and in that respect its duty as car- rier was incomplete. The freight was never paid, nor have the go ever reached the possession of the vendee. The transitus, therefore, had not terminated, and the vendor's right of stoppage continued nut- withstanding the seizure made under the attachment sued out by the plaintiff. The cause was rightly decided by the district court, and its judgment will be affirmed. BECKER v. HALLGARTEN. (Court of Appeals of New York, 1SS1. S6 N. Y. 1CT ) Action for conversion. YVilhelm & Boemer, merchants in Berlin, Germany, sold to Boas & Stern, of the same place, certain goods on credit, giving them invoices of the same. The goods were shipped by direction of the purchasers to one Becker, the plaintiff, in Bremen. Boas & Stern borrowed 3,000 marks of one Goldstein, a banker in Berlin, on the security of the goods and the bills of lading, directing Becker to hold them subject to Goldstein's order, who directed Becker to ship them to defendants, Hallgarten & Co., of Xew York. Goldstein wrote defendants informing them of the shipment, and directed them to deliver the goods to one L. Stern, of New York, on payment by him of the Goldstein loan and expenses. Becker shipped the goods on August 4th to defendants, with bills of lading made out in his name as shipper, directing delivery of the goods to defendai One bill of lading he mailed to defendants, directing deliver} of the ds to L. Stern, as instructed by Goldstein. The duplicate bill of lading was forwarded to Boas & Stern, who sent it to Goldstein, who forwarded it to defendants, directing the same disposition of the goods by them. Becker cabled defendants on August 19th, on be half of the vendors, stopping the goods in transit, and they to hold them for plaintiff's account. The vendors afterwards assigned to plaintiff their claims against the purchasers for an accepted draft and balance of account. Under the laws of Germany, goods cov< by bills of lading can be transferred only by written indorsement on the bills by the consignee. Thi i til to defendant were not indoi Plaintiff tendered defendants their charges, and demanded the goods. Danforth, J. Keeker was at no time in the course oi thi transactions the agent or representative of the vendors. Until and including the shipment of the goods he was the agenl of Boas & rn, the vendees, or of Goldstein. He obeyed, as was proper, at the different of the affair, first one and then the other of tin narti--. [f hi il character ceased with the shipment, he neither r»ntered the employ of the vendors, nor did he acl under any instruc tion received in itn them. Tlie finding thei that in behalf of the vendors he -topped the goods is without evidi ipport it. 252 RIGHT OF UNPAID SELLER. AGAINST THE GOODS Assuming, in the next place (for the purpose only of this discus- sion,) that by the assignment above set out he became vested with a vendor's right to stop goods while on their way to an insolvent pur- chaser, it is one which we think cannot be exercised in this case, for the reasons : First, that the transit was over before the goods left Germany. They were sent by the vendors to Becker, as the vendees' agent at Bremen. The shipment was preceded by and was in conse- quence of a request by B. & S. to the vendors "to send the boxes" to Becker "at our disposition." Therefore, on the 28th of July, inform- ing Becker of the shipment to him, "at the request of and for account of Messrs. B. & S. of Berlin," they write, we have sent you part ot the goods in question and "request you to carry out the further in- struction of said parties concerning the same;" and in the next let- ter, communicating the shipment of the balance, they say, "and re- quest you hereby to let Messrs. B. & S. have the further disposal thereof.*' It is obvious then that the impulse impressed upon the goods by the vendors carried them only to Bremen. Some other ac- tion was necessary on the part of the vendees before they moved again. They at that point transferred the goods to Goldstein, and made them, in the hands of Becker, subject to his order. The trial court finds not only a "taking of the goods by him as security," but that Boas & Stern "directed Becker to hold and ship the goods ac- cording to Goldstein's directions." This was done. The bills of lad- ing were issued in favor of strangers to the vendees, and who rep- resent a party having actual custody and the right of disposition. The shipment and the consignment by the vendors ended at Bremen. At that place new interests attached, in promotion of which the goods were sent forward. The only consignment by W. & B. was to Becker at Bremen. It has been held that the delivery to the vendee, which puts an end to the state of passage, may be at a place where he means the goods to remain until a fresh destination is communicated to them by orders from himself. Valpy v. Gibson, 4 C. B. 837 ; Biggs v. Barry, 2 Curt. 259; Bolton v. L. & Y. R. W. Co., L. R., 1 C. P. 439. Also Dixon v. Baldwen, 5 East, 175 ; and this case is approved in Covell v. Hitchcock, 23 Wend. 611. In the case before us it is plain that they had reached the place for which they were intended, under the direction given by the vendors, and had come under the actual con- trol of the vendees. Dixon v. Baldwen, supra, is commented upon in Harris v. Pratt, 17 N. Y. 249, and distinguished from the rule thought applicable to the facts of that case. There the suspense in transporta- tion was temporary, and to be resumed at a future time in the direc- tion already given by the vendors. But in the case before us not only is the actual fact like that in Dixon v. Baldwen, but if the de- tention at Bremen was originally intended only to give the vendees an opportunity to determine by which of several routes or at what time, as in Harris v. Pratt, the goods should go on, we have the additional STOPPAGE IN TRANSITU J233 vital circumstances before adverted to of a complete possession and control by the vendees and its transfer to a third party, who also took the actual possession and control of the goods, and has since retained them. Neither Harris v. Pratt nor any of the other cases cited by the appellant go to the extent of upholding the vendor's lien in such a case. Second. The transaction between Goldstein and the vendees was effectual to pass the property to him and so deprive the vendors of the right of stoppage if it otherwise existed. That right may always be defeated by indorsing and delivering a bill of lading of the goods to a bona fide indorsee for a valuable consideration, without notice of the facts on which the right of stoppage would otherwise exist. This was held in Lickbarrow v. Mason, 2 T. R. 63, and has since been deemed established. It does not impair the force of this position that the money was in fact advanced before the delivery of the bill of lad- The goods were in the possession of Goldstein when he paid over the money. The bill of lading was promised and was part of the consideration on which the money was paid, but more than all he had the right, under the authority given to him by B. & S., to take the bill of lading in any form, and it was made out for his benefit. City Bk. v. R. Co., 44 N. Y. 136. Nor is it material, unless made so by the German law (infra), that the bill of lading was not indorsed. It was not necessary that it should be. Hallgarten & Co. were Gold- stein's agents, subject to his control, and in making the bill of lading in their names as consignees all- was effected which the indorsement of a bill taken in the name of B. & S. would have accomplished. The cases cited by the respondent (Meyerstein v. Barber, L. R., 2 C. 1 '. 45 ; Short v. Simpson, 1 id. 255), show that a bill so indorsed has the same effect, even if the ship containing the goods was at sea, as de- livery of the goods themselves. Here there was a delivery of the goods to Goldstein, and the bill of lading followed the possession. Third. The German law, as set out in evidence, has no application to the case in hand. It applies when the bill of lading is i in the name of the vendee or of some person through whom the party claim- ing its benefit must make title. The observations already made show that in our opinion this is not the plaintiff's position. Nor are the ndants estopped from disputing the plaintiff's title. There is no finding of any fact upon which such doctrine can rest; no change ol position by the plaintiff; a promise at most by the defendants with- out consideration, in violation of duty to their principals and in fraud of their rights. If it forms the foundation of any action, it cannot be I of which is to deprive a third party of his property, subject the defendant to a second action by the real owner of the ds. The right of stoppage, when ii i pends upon equity, and thai of the dei' iime- times called a "lien;*' and it is a lien, in the thai the vendee, upon paymenl or tender of the price,.bu1 no1 otherwise, may recover them. I'm it i- something more than a n mmon law lien, winch i only a naked right of | ion. With the^goods in his p ion, the vendor hi :cial property in them, which is parcel "f I inal rship. Whether thi I of the stoppage in transitu, or the retention of the by the vendor, on th ■ if the v Ivency, is to rescind the contract, or not, has been the sub f.t" much ion : and definitely settled. Bui the prevail pinion now is, we believe, thai the contract is not i rily re cinded, unl< the i by i 256 RIGHT OF UNPAID SELLER AGAINST THE GOODS conduct so treat it, which conclusion is most favorable to the vendor, for whose protection the doctrine of stoppage in transitu was first established'; for, if the exercise of the right operated to rescind the contract, the vendor would be deprived of the remedy which it is now generally conceded he has, in a proper case, upon a resale of the goods. to hold the vendee or the assignee of his estate for the loss sustained through his non-performance of the contract, or in consequence of a fall in the market price. And as the stoppage does not rescind the con- tract of sale, it follows that the vendee or his assignee may obtain the goods on payment of the price, or, if the vendee was able and ready to perform the contract on his part, he may recover damages for the failure of the seller to deliver the property according to its terms. But can the vendee maintain such action if he is not able to per- form? And does his insolvency at the time fixed for the delivery of the property amount to such inability? Or, where the sale is upon credit, does a resale of the property by the vendor before the expira- tion of the time of the credit give the insolvent vendee, notwithstand- ing his inability to pay for the goods, a right of action against the vendor for the difference between the contract price and their market value at the time of the resale? As an authority sustaining the right of the vendee to maintain such an action against his vendor, Bloxam v. Sanders, 4 Barn. & C. 941, is cited, where Bayley, J., says: "If goods are sold upon credit, and nothing is agreed upon as to the time of delivering the goods, the vendee is immediately entitled to the pos- session, and the right of possession and the right of property vested at once in him ; but his right of possession is not absolute. It is liable to be defeated if he becomes insolvent before he obtains possession. Whether default in payment when the credit expires will destroy his right of possession, if he has not before that time obtained actual pos- session, and put him in the same situation as if there had been no bargain for credit, it is not now necessary to inquire, because this is a case of insolvency, and in case of insolvency the point seems per- fectly clear. If the seller has dispatched the goods to the buyer, and insolvency occurs, he has a right, in virtue of his original ownership, to stop them in transitu. Why? Because the property is vested in the buyer, so as to subject him to the risk of any accident; but he has not an indefeasible right to the possession, for his insolvency, without payment of the price, defeats that right. And if this be the case after he has dispatched the goods, and while they are in transitu, a fortiori is it when he has never parted with the goods, and when no transitus has begun. The buyer, or those who stand in his place, may still ob- tain the right of possession, if they will pay or tender the price, or they may still act upon the right of property, if anything unwarrant- able is done to that right. If, for instance, the original vendor sell when he ought not, they may bring a special action against him for the injury they sustain by such wrongful sale, and recover damages to the extent of that injury; but they can maintain no action in which EIGHT OF EESALE 237 right of property and right of possession are both requisite, unless they have both those rights." Still the question remains, when is the resale wrongful? And what is necessary on the part of the vendee to enable him to maintain the action for the resale is not decided, nor does it appear to have been a question in the case. The action was trover, to the maintenance of which the right of possession was essential. In Smith's Leading Cases, (volume 1, pt. 11, p. 1199), in the note to Lickbarrow v. Mason, 2 Term R. 63, it is said : "Supposing the contract of sale not to be rescinded, it seems to follow that the goods, while detained, remain at the risk of the vendee, and that the vendor can have no right to resell them, at all events until the period of credit is expired. After that period, indeed, the refusal of the vendee or his representatives to re- ceive the goods and pay the price would probably be held to entitle the vendor to elect to rescind the contract." The only authority cited in support of the note above quoted is Langfort v. Tiler, Salk. 113, from an examination of which it will be seen that it does not meet the question. * * * When the sale is upon credit, it is one of the implied conditions of the contract that the vendee shall keep his credit good; his promise to pay at a future day involving an engagement on his part that he will remain and then be able to pay, which engagement is broken when he becomes insolvent and unable to pay ; and hence the right of the vendor to then stop performance of the contract on his part. Nor is the rule varied by the fact that the vendee has given his nolo or bills or other securities for the price, payable at the end of the time for which the credit is allowed. The vendor, in such case, in- curs no liability by not delivering the property, unless the vendee pay or tender the contract price. But, in order to sue the vendee, he should offer to deliver according to the contract. Such is the scope of the rule laid down in Mining Co. v. Brown, 124 U. S. 385, 8 Sup- Ct. 531, 31 L. Ed. 424, where it is held: "The insolvency of the vendee in a contract for the sale and future deliver)' of personal property in installments, payment to be made in notes of the vend ich in- stallment is delivered, 'is sufficient to justify the vendor for refus ing to continue the delivery, unless payment lie made in cash;' hut it does not absolve him from offering to deliver the property in ] formance of the contract, if he intends to hold the purcha irty to it. lie cannot ; : ipon dama >r non-performance by the insolvent without showing performance on hi- own part, or an offer to perform, with ability to make the offer good." Tin- rule musl work both way-. The right- and obligations of the vendor and vendee correlative. If the insolvency of the vendee i ienl to justify the vendor in ri i to deliver tin prop< rty unli menl he m in cash, it follows that the vendor incurs no liability by hi n in .,1. and thi e no righl of action accrues to the vendee, unlei i CoolbyGa es Sali -17 258 RIGHT OF UNPAID SELLER AGAINST THE GOODS ment be made by him ; and if the vendor cannot insist upon damages for the vendee's non-performance without showing an offer on his part, with the ability, to perform, so neither can the vendee, if he is without the ability to perform, recover from the vendor. * * * But it is contended that, while the vendor may refuse to deliver the property to the insolvent vendee, he is obliged to keep it for the ven- dee until the time of the credit expires, and if he resell before that time the vendor may have his action for damages. When, by the con- tract, the property is to be delivered at a future day, and the vendor sells it to another before that time arrives, the vendee, being able to perform, may have an immediate action ; for the vendor, by thus dis- abling himself from performing by delivery at the proper time, com- mits a breach of the contract, and the vendee need not wait until the time for the delivery arrives. But that rule has no application here. The obligation of the vendor, under a contract like that between the parties in this case, is to deliver the goods at the time stipulated in the agreement, which is at once, upon the receipt or tender of the purchaser's commercial paper, or within a reasonable time, — not at the time to which the credit is extehded. The right of the vendee, is to receive the goods at the time the vendor contracts to deliver them, and he is not bound to receive them at any other time. The breach, therefore, on the part of the vendor, if there be one, consists in his failure to deliver the goods according to the contract, and occurs at that time, and not upon a resale subsequently made ; and the vendee's cause of action arises, if at all, upon the failure to deliver, and not on the resale. In the case now before us the averments of the defendant's answer, which on the trial he was not permitted to prove, though he offered to do so, show that at the time the goods were to have been delivered, according to the contract of sale, the plaintiffs were insolvent and their paper dishonored, so that the condition upon which their right to the goods depended had not been performed by them, and they were with- out the necessary ability to perform the same. Upon what just prin- ciple can the seller, in such a case, be required to hold the goods until the expiration of the credit? It is true that at that time the vendee may again be solvent, and able to pay. There is no presumption or assur- ance that he will. If any presumption arises, it is rather that the in- solvency will continue, which is more in accordance with the experi- ence of the commercial world. But, as we have seen, it is part of the vendee's engagement that he will maintain his credit, which is broken by his insolvency. And it would be unjust to require the vendor to sustain the loss resulting from the destruction or deterioration of the goods in the mean time, which in many instances must ensue if the seller is compelled to keep the goods shut up, and take the risks of the future solvency of the buyer. The injustice of such a requirement is conceded where the goods are of a perishable nature ; and the vendor, it is now settled, is not obliged to keep goods of that EIGHT OF KESALE -50 character until the termination of the credit. In the notes to Lick- barrow v. Mason, in Smith's Leading Cases, (volume 1, pt. 11, p. 1199,) it is said: "But what, it will be said, if the goods be perishable a nature that the vendor cannot keep them until the time of credit has expired? In such a case it is submitted that courts of law, having orig- inally adopted this doctrine of stoppage in transitu from equity, would act on equitable principles by holding the vendor invested with an im- plied authority to make the necessary sale." It is insisted, however, that the right of sale in such cases constitul an exception to the rule. In our opinion the reasons upon which the exception rests, if it be such, should make the exception the general rule. The value of many kinds of merchandise, not perishable, de- pends largely upon their being in the market at the appropriate sea- sons, and to supply temporary demands; and, if not available for those purposes at the proper time, they become comparatively worth- less, or so reduced in value as to- entail great loss, which may be less only in degree,' though greater in amount, than where the goods are perishable; and it is no more just or equitable to subject the vendor to the loss in the one case than in the other. The right of resale ought not, we think, be made to depend upon the degree or extent of the 1 that must ensue if it be denied. It rests upon a different principle, and grows out of the failure of the vendee to keep his engagement. Not that the contract is thereby rescinded, for that would defeat the \ dor's remedy for damages upon resale after due notice, but that he may elect to treat the agreement for the credit as at an end, on account of the vendee's default. We see no good reason for holding that the rights of the seller are any the less where the sale is upon credit, and the property is retained by him on account of the buyer's insolvency, than they would be if the sale were for cash, and the vendee was un- able to pay tbe price agreed upon. In either case the incapacity of the vendee to perform his part of the agreement — and insolvency is in- capacity — warrants the vendor in withholding performance on his i We are therefore of opinion the trial court erred in excluding the evidence of the plaintiffs' insolvency, and in charging the jurj A'li in the I of the case, and also in refusing the ii tion requested by tl ndant therein contained. Counsel ha d a question relating to the charge of the courl on the n dan bm, 2 io i ceptibn was taken to the charge on . it will n<>t be further noticed, For the errors mention the judgments below are reversed, and th< emanded for fui ther proceedings. Di N v. McANDREW. (Coram! Ion of Appeals of Mew JTork, 1870, M N. Y. 72J post, p. 2i I '. '"'' 3 report of the 1?G0 RIGHT OF UNPAID SELLER AGAINST THE GOODS IV. Right to Rescind 9 DUSTAN v. McANDREW. (Commission of Appeals of New York, 1870. 44 N. T. 72.) Action for breach of contract. On August 24, 1860, J. S. & W. Brown, of the city of New York, executed an agreement with the plaintiff as follows : "In consideration of the sum of one dollar, the re- ceipt of which is hereby acknowledged, we have sold this day to Mr. John F. Dustan, of this city, 100,000 pounds of first sort western or eastern hops as we may select; growth of 1860; deliverable in the city of New York, at our option, during the months of October or November, 1860, at seventeen cents per pound, subject to Mr. J. S. Brown's inspection, or other mutually satisfactory. Terms, cash on delivery. Mr. Dustan's name to be made satisfactory either by in- dorsement or by a deposit of $2,500 by both parties. J. S. & W. Brown." On September 7, the plaintiff sold this contract to the defendants, by an instrument as follows: "In consideration of the sum of one dollar, the receipt of which is hereby acknowledged, I have this day sold to McAndrew & Wann the contract of J. S. & W. Brown, dated 24th August, 1860, for 100,000 pounds first sort hops, western or east- ern, growth of 1860; upon condition that the said McAndrew & Wann fulfill the conditions of said contract to the said J. S. & W. Brown, and pay to me, in addition, on delivery of the hops, ten and one-half cents per pound. John F. Dustan. New York, September 7, 1860." On November 28, J. S. & W. Brown notified the plaintiff by letter, that they would deliver the hops pursuant to contract on the 30th of that month; and plaintiff immediately, on the same day, notified the defendants of that fact, inclosing to them the letter of J. S. & W. Brown ; and on the same day the said J. S. & W. Brown wrote a simi- lar letter to the defendants. These notices actually came to the hands of the defendants on the morning of the 30th. Prior to November 30, John S. Browfi had inspected the hops and put his brand upon them, and certified that they were such hops as the contract called for. On November 30, J. S. & W. Brown were ready and willing to deliver the hops, and the defendants were requested to take them, and they declined on the sole ground as they claimed, that they had not had an opportunity to examine them and inspect their quality, and because Messrs. Brown had refused to let an inspector whom they sent, inspect the hops. o For discussion of principles, see Tiffany, Sales (2d Ed.) § 111. RIGHT TO RESCIND 201 On December 24 the plaintiff took the hops from Messrs. Brown and paid for them, and on the same day wrote the following letter to defendants: "New York, December 24th, 1860. Messrs. McAndrew & Wann : Gentlemen. — The 100,000 pounds hops mentioned in con- tract of J. S. & W. Brown with me, of 24th August, I860, and in contract of yourselves with me of 7th September, 1860, are now at the store No. 4 Bridge street, awaiting the fulfillment by you of the terms of your contract, and I hereby tender to you the said hops, ami demand from you the payment of the sum of $27,500, the amount of such contract price. Unless you comply with the terms of said con- tract, on or before the 26th day of December, instant, I will proceed to sell the same on your account and hold you for any deficiency. Your obedient servant, John F. Dustan." Defendant still declined to take the hops, and then on December 26 plaintiff placed them in the hands of a hop broker, who sold them for twenty cents per pound. The plaintiff also gave evidence that on November 30 and on De- cember 26 twenty cents per pound was the fair market value of the hops; and the defendants gave evidence that on both of these days the market value was some cents higher. There was also evidence showing that hops had a downward tendency in market all through the month of December. It was shown that the hops in all respects answered the contract. Judgment for plaintiff. Earl, C. The contract required that the hops should be in- spected by J. S. Brown, or some other inspector satisfactory to both parties. In case J. S. Brown could not or should not inspect them for any reason, then they were to be inspected by some other person mu- tually satisfactory. Neither party had the right to demand any other inspector, unless Brown neglected or refused to inspect. It is doubt- less unusual to insert a stipulation in contracts that the vendor shall inspect the goods sold. But where parties agree to this they musl 'id by their contract, and it must be construed the same as if some other person had been chosen inspector. It is claimed on the part of the respondent, and was held by the court below, that the inspection provided for was intended simply for the convenience of the vendors, to enable them to perform their contract, and that it merely fur; prima : e that the h red the contract, and that the in pection was not conclusive upon the parti I cannot assent to this. The contract was for the and purcha ■ of hop of a certain description, and the of the pection was to determine for the benefit of both parties whether they ai I that description. Until the vendors delivered the hop- with the inspection, the \ ot obliged to pay, and when ed, the vend re entitled to the purchase-pi o The inspection was tlms as much for the convenience and benefit of ■ party as the other. Its purpose, like similar pn 2(52 RIGHT OF UNPAID SELLER AGAINST THE GOODS of contracts, was to prevent dispute and litigation at and after perform- ance. But if the inspection was merely for the convenience of the ven- dors, then they could dispense with it, and compel the vendees to take the hops without any inspection whatever. And if it was merely prima facie evidence of the quality of the hops, then it was an idle ceremony, because not being binding, the vendee could still dispute the quality of the hops, refuse to take them, and show, if he could, when sued for not taking them, that they did not answer the requirements of the contract ; and thus the plain purpose for which the provision was in- serted in the contract would be entirely defeated. The inspection could be assailed for fraud, or bad faith in making it, and perhaps within the case of McMahon v. New York & Erie R. Co., 20 N. Y. 463, because made without notice to the vendee. The inspection here was made without notice ; but it is not necessary to de- termine whether this renders it invalid, as no such defense was inti- mated in the answer or upon the trial. By the purchase of the contract the defendants were substituted, as to its performance, in the place of the vendee therein named, and were bound to do all that he had agreed to do or was bound in law to do. When notified that the hops were ready for delivery they declined to take them, upon the sole ground that they had not had an opportunity to examine or inspect them ; and they claimed that they had sent one Smith to inspect them, and that he had been declined permission to inspect them. There was no proof however that they ever tried to examine or inspect the hops, or that the vendors ever refused to per- mit them to examine or inspect them. They sent Smith to inspect them, and he went to one of the several storehouses where some of the hops were stored, and he says he was there refused an opportunity to inspect them by Mr. A. A. Brown. But there is no proof that he was in any way connected with the vendor, or that he had any agency or au- thority whatever from them. There was no proof that defendants ever tried with the vendors to agree upon any other inspector, or that they ever asked the vendors to have the hops inspected by any other inspector, and they made no complaint at any time that they were inspected without notice to them. The point that they should have had notice of the inspection was not taken in the motion for a nonsuit, nor in any of the requests to the court to charge the jury. If the point had been taken in the answer or on the trial, the plaintiff might perhaps have shown that notice was given by the vendors, or that it was waived. Hence we must hold, upon the case as presented to us, that there was no default on the part of the plaintiff or the vendors, and that the defendants were in default in not taking and paying for the hops. The only other question to be considered is, whether the court erred in the rule of damages adopted in ordering the verdict. The court decided that the plaintiff was entitled to recover the dif- ference between the contract price and the price obtained by the plain- BIGHT To RESCIND 263 tiff upon the resale of the hops, and refused, upon the request of the defendants, to submit to the jury the question as to the market value of the hops on or about the 30th day of November. The vendor of personal property in a suit against the vendee for not taking and paying for the property, has the choice ordinarily of either one of three methods to indemnify himself. (1) He ; .ore or retain the property for the vendee, and sue him for the entire pur- chase-price; (2) He may sell the property, acting as the agent for this purpose of the vendee, and recover the difference between the con- tract price and the price obtained on such resale; or (3) lie may keep the property as his own, and recover the difference between the mar- ket price at the time and place of delivery and the contract price. 2 Pars. Cont. 4S4; Sedgw. Dam. 282; Lewis v. Greider, 49 Barl Pollen v. Le Roy, 30 X. Y. 549. In this case the plaintiff chose and the court applied the second rule above mentioned. In such case the vendor is treated as the agent of the vendee to make the sale, and all that is required of him is that he should act with reasonable care and diligence, and in good faith. He should make the sale without unnec- essary delay, but he must be the judge as to the time and place of sale, provided he act in good faith and with reasonable care and dili- gence. Here it is conceded that the sale was fairly made; it was made in the city of New York, in less than one month from the time the defendants refused to take the hops. It was not claimed on the trial that the delay was unreasonable, and we can find nothing in the case to authorize us to hold that it was unjustifiable. We are therefore of the opinion that the court did not err as to the rule of damages. The judgment should therefore be affirmed, with costs. -e in September, 1 and a verdict rendered in favor of the plaintifl The price paid for the stall 2.7oo. The plainti directed to show that the horse, instead of bein nable i is known among horsemen as a "ridgeling," and nearly worthli a foal getter. The plaintiffs' evid< 'i the opinion ta omitted. 270 ACTIONS FOR BREACH OF CONTRACT for service, he got only about 10 per cent, of mares served with foal, and that his value was not more than that of a common workhorse, or about $150. After the evidence was in the defendants asked the court to direct a verdict in their favor, on the ground that the evi- dence showed that plaintiffs did not return the horse according to the conditions of the warranty, and give the defendants the opportu- nity to replace him with another horse. The court overruled the mo- tion pro forma, reserving the question for further argument upon a motion for a new trial, in case there should be a verdict in favor of the plaintiffs. That motion has now been heard, and fully argued and considered, and the court is of opinion that it must be overruled. The rule is laid down in 28 Am. & Eng. Enc. Law, 827, as follows : "In a sale of certain classes of articles, the contract of sale frequently specifies the buyer's remedy in case the warranty is not complied with. The buyer is not concluded by such a provision, however, but may waive the special remedy, and proceed as if the contract had been silent in that particular. The special remedy usually allowed in such contracts is the privilege of returning the article, if it proves not to be as warranted, and to receive back the price paid." And it seems to be fully supported by the authorities. One of the leading and best-considered cases on the subject is that of Manu- facturing Co. v. Gardner, 10 Cush. (Mass.) 88. In that case the court, by Metcalf, J., says: "When a seller, in addition to a warranty of property, makes a promise to take it back if it does not conform to the warranty, we cannot hold that such superadded provision rescinds and vacates the contract of warranty. We are of opinion that in such case the buyer has, if not a double remedy, at least a choice of rem- edies, and may either return the property within a reasonable time, or keep it and maintain an action for breach of the warranty." The same ruling was made by the supreme court of Connecticut in an opinion by Park, C. J., in Shupe v. Collender, 56 Conn. 489, 15 Atl. 405, 1 L. R. A. 339. In Perrine v. Serrell, 30 N. J. Law, 454, the action was on a warranty in the sale of a horse, with a provision that if the horse did not suit he might be returned, and the seller would take him back and send one that would suit. The court held that this latter provision was independent of the warranty, and that the pur- chaser was not obliged to return the horse, but could maintain his ac- tion upon the warranty. In Love v. Ross, recently decided (October, 1893) by the supreme court of Iowa, reported in 89 Iowa, 400, 56 X. W. 529, the contract was for the sale of a stallion, with a war- ranty that he was a reasonably sure foal getter under favorable cir- cumstances, and in default of which the purchasers conld return the stallion to the sellers in as good condition as he was then in, and the sellers would exchange him for another, giving or receiving the actual difference of value in the two animals. In my judgment the case is not distinguishable from the one at bar. It was held that the pur- chasers had he right to retain the horse and to recover damages for BREACH OF WARRANTY — RIGHTS AFTER ACCEPTANCE -71 the breach of the warranty, or to return him and receive another horse in exchange upon the terms stated. Hefner v. Haynes, by the same court, decided in 1894, reported in 89 Iowa, 616, 57 X. W. 421, holds - to the same rule under a similar warranty in the sale of a stallion. The supreme court of Minnesota, in Mandel v. Buttles, 21 Mini and Fitzpatrick v. D. M. Osborne & Co., 50 Minn. 261, 52 X. W. 861, has held the same doctrine, following Manufacturing Co. v. Gard- ner, supra. * * * The supreme court of Wisconsin has affirn the same doctrine in Osborne v. McQueen, 67 Wis. 3'22. 2 ' N. \Y. I and in Park v. Richardson & BoyiTton Co., 81 Wis. 399, 51 X. W. ?72. * * * In the proper construction of the warranty in the case at bar, there are one or two other considerations which I think should have some weight. The warranty is in print, being part and parcel of a printed blank for the sale of horses by the defendants, furnished and in com- mon use by them. The guaranty is absolute and complete in itself, closing with a full stop. The provision for a return of the hot which is superadded, does not in terms make it obligatory upon the purchasers to return him. It only says that upon his delivery to the sellers without cost, if as sound and in as good condition as when purchased, the sellers will replace him with another horse. It is only by construction that any obligation can lie put upon the purchas to return the horse. It would have been very easy by the change of a few words, to have placed the obligation upon the purchasers, in ress terms, that is now sought to be put upon them by construc- tion. Under these circumstances, it would seem proper to apply the rule that is sometimes applied, that, when there is doubt abi proper construction, to construe the contract most strongly ! son furnishing the printed blank containing the provision in qu in. It is evident that, if the construction contended for by thi be the true one, the remedy under the warranty, in the circum- 3 of this OUnt to but very little. Under I usl be as and in as ondition when returned as at the time of th I i thai t : dd ret'n e i" i him hack it" he lacked in any d< [ n . n sold. 'I in Marc!; could not be tested until late in It' in the meantime a i | come Hi or he should ha ommon to horses, withoul any faull on the plait and perh; though t) ., to or upon his value for the pur| ich he I, in which case the purcha ers would have no om the warranty. 1*72 ACTIONS FOR BREACH OF CONTRACT There is a provision in writing filled into the blank which shows quite clearly that the vendors intended to have it in their power to take advantage of any slight defect or ailment whatsoever in the horse arising after the sale, though it should have no relation to his qual- ities as a foal getter. That provision is this, that : "In case this horse is returned on account of not being a reasonable foal getter, a lump on inside right fore leg, and below the knee, shall not be considered a blemish and reason for not taking him back, as a small injury ap- pears there now." If he did not prove to be a good foal getter, which could not be tested until one season had elapsed, and could not be returned on ac- count of some small blemish not affecting materially his value, which rendered him in not so good a condition as at the time of the sale, the warranty would be of no appreciable value, if there were no remedy for a breach except to return the horse. Such a result, considering the language used, could hardly have been in the contemplation of the parties. The motion for a new trial is denied. 2. Rescission CANHAM v. PLANO MFG. CO. (Supreme Court of North Dakota, 1S93. 3 N. D. 229, 55 N. W. 5S3.) Action for breach of contract by John Canham against the Piano Manufacturing Company. Plaintiff had judgment, and defendant ap- peals. Corliss, J. 6 The defendant sold and delivered to plaintiff a twine binder. For this, plaintiff gave his three promissory notes. He sub- sequently returned the machine, claiming that there was a breach of the warranty accompanying the sale, and, having paid two of these notes, he brings suit to recover the amount so paid, and also the amount due on the other note. If there was a valid warranty on such sale, and a breach thereof, and a valid rescission of the contract, then the consideration for these notes failed, and it was the duty of the defendant to return the note which remained unpaid, and to restore the money which had been paid by the plaintiff in satisfaction of the other two notes. One of the notes was paid to the agent on his prom- ise to remedy defects in the machine, and the other one was paid by plaintiff to one claiming to be an innocent purchaser for value. In making these payments, plaintiff did not waive his right to a return of the money on failure of the consideration of these notes. The other note having been negotiated before maturity by the defendant, it is e Part of the opinion is omitted. BREACH OF WARRANTY — RIGHTS AFTER ACCEPTANCE 273 liable to plaintiff for the amount due thereon if a failure of consider- ation is established. Fahey v. Harvesting Co., 3 N. D. 221 \ 55 X. W. 580, 44 Am. St. Rep. 554 (decided at this term,) and cases there cited. The sufficiency of the complaint was challenged, but it is clearly sufficient. It shows a breach of warranty and rescission of the con- tract which would entitle plaintiff to recover the amounts paid on the two notes and the amount due on the note negotiated by defendant before maturity. All these facts relating to these notes are fully forth in the complaint. It therefore states a cause of action. The court directed a verdict for the plaintiff for the full amount claimed. From the judgment entered upon this verdict, defendant appeals. Was it error to direct this verdict? The machine was sold by an agent of the defendant whose name was Crafts. The warranty was oral. It was, in substance, that the binder would do as good work as any other binder in the market. There is no controversy either as to the fact of this warranty, or as to the fact of a breach thereof. But it is insisted that the plaintiff did not rescind the contract promptly, after discovering the defect. This would be fatal to plain- tiff's recovery unless he was induced to delay action by defendant's promise to make the machine work. Section 3591, Comp. Laws. The sale was in July, 1SS9, and the binder was not in fact returned until August 4, 1890. It is undisputed, however, that the agent Crafts re- peatedly promised to put the binder in working order, and requested the plaintiff to keep it, to enable him (Crafts) to do this. A number of efforts to fix it were made during the season of 1889, hut they all proved abortive. Each time the attempt failed, plaintiff expressed his determination to return the binder, hut was deterred from doing so by Crafts' repeated promises to make the binder do good work, and his often-repeated entreaties that the plaintiff keep the machine, to give him (Crafts) a chance to make it fulfill the warranty. Finally, not being able to make it work during the harvest of 1889, Crafts promised plaintiff that, if he, plaintiff, would keep the binder until next season, he would agree to see that it was put in good working order for next harvest, to do as good work as any other machine in the market. Relj . plaintiff did keep the bind It was urged on the argument that Crafts gave his mere personal guaranty that this should be done, hut we do not so con true the i ord. It was undoubtedly understood by both the parties that he ing for the defendanl in making this promise. During all of this time Crafts v n\ for the defi in the -air of the e machines. He was their general ag< nl for this purpose, being intrusted with this busines ! of • llii g g< nerally, and not merely with thi ■ I thi par ticular machine. "An agenl for a particular tran action is called a -nt. All othi neral a " Section mp. l.av. such agent he had authority to make the warranty on the ! to. Section Id.; M< Cormi< k v. I.. : -74 ACTIONS FOR BREACH OF CONTRACT Minn. 135, 9 N. W. 675. It cannot be doubted that he had power to represent and bind the defendant by his subsequent conduct and prom- ises, inducing- plaintiff to refrain from prompt action on discovery of the defects in the machine. Snody v. Shier, 88 Mich. 304, 50 N. W. 252 ; Pitsinowsky v. Beardsley, 37 Iowa, 9. Defendant, through its authorized agent, by its promises and con- duct, lulled the plaintiff into a sense of security against prejudice from his failure promptly to restore the property, and cannot be heard to insist that the delay until the year 1890 is fatal to plaintiff's right to rescind for breach of warranty. Snody v. Shier, 88 Mich. 304, 50 N. W. 252 ; Manufacturing Co. v. Kelly, -26 111. App. 394. In fact, there was a new warranty made in the fall of 1889 that the machine would do as good work the next season as any other binder in the market. In the month of August, 1890, after repeated efforts by plaintiff to induce Crafts to send an expert to fix the binder in ac- cordance with his promise, one was finally sent out to plaintiff's farm. It was Saturday night before the work was finished. Early Monday morning plaintiff started the machine. It did not do good work. The same day it was returned by plaintiff to the same place from which he took it when he purchased it, and he then notified the agent Crafts that he had returned it, and demanded a return of his notes. If Crafts was agent for the defendant during the year 1890 in the sale of its machines, there can be no doubt that plaintiff acted promptly in re- turning the property to defendant, in view of the promises and con- duct of defendant's agent inducing delay, and therefore amounting to a waiver of return until after defendant's final effort to fix the machine. That Crafts could give a new warranty, after failure to make the binder work during the harvest of 1889, cannot be doubted. There being a breach of a former warranty, plaintiff had it in his power to return the binder, and have back his notes, or a new machine in place of the defective one. This new machine would be delivered upon the same warranty which related to the old one. The parties could agree, after the return of the old one, to a new contract of sale of the old binder with warranty, and therefore the agent could make a new warranty without the formality of a return, which he could not prevent. This same reasoning leads to the conclusion that the agent could attach to the continued holding of the binder by the plaintiff a con- dition that if it should not do as good work the next season as any other binder in the market he would take it back. This is precisely what he did agree to. It amounted, in effect, to a keeping of the ma- chine by the plaintiff on trial, with a right to return it next year if it should fail to work as stipulated by defendant's agent. Had the bind- er been returned as sold Crafts would have had power to sell it on trial. Deering v. Thorn, 29 Minn. 120, 12 N. W. 350; Oster v. Mick- ley, 35 Minn. 245. 28 N. W. 710. He therefore had power to prom- ise to take back the binder if it did not work as warranted, without BREACH OF WARRANTY — BIGHTS AFTER ACCEPTANCE -7 J tas necessity of a formal surrender of the machine and the cancella- tion of the contract of sale and the making of a new contract. What- ever view we take of the matter, — whether we regard the old warranty as undisturbed, or consider that a new warranty was made relating to the work the binder would do during the year 1890, or that an agree- ment was made to take back the binder if it should fail to do good work during the year 1890, — we reach the same conclusion. We h as a matter of law, that the binder was returned in time. * * * Affirmed. 7 3. Breach of Implied Warranty NORTHWESTERN CORDAGE CO. v. RICE. (Supreme Court of North Dakota. L896. 5 N. I>. 432, 67 N. W. 298, 57 Am. St Rep. 563.) Action by the Northwestern Corda npany against D. K. Rice. From a judgment for plaintiff, defendant appea Corliss, J. Defendant ordered of the plaintiff 7,000 pounds of pure Manilla twine. Plaintiff, acting on this order, shipped to defend- ant a lot of twine, which the evidence tend- to prove was not pure Manilla twine, but an inferior article, worth much less in the market. Defendant having been sued Upon the notes given for the purchase price of this twine, he interposed as a counterclaim an alleged c; of action founded upon breach of warranty. ( >n the trial the district judge directed a verdict in favor of the plaintiff. Defendant appeals. At the outset, we are required to determine whether, in fact, th< was a warranty. It is tine that the plaintiff did not, in t> .ar- rant that the twine sold by it to defendant was pine Manilla tu Indeed, it ma presentations whatever in written instrument, or by oral statement. But, when it accepted from defendant an order Manilla twine, it, in contemplation of law, : to sell fendant an articl ring to that description. That a s le ol article by a particular description constitutes a \\ that the ticl to that description, is well settled. Benj. S 622, and i ited; I v. Hilt N. Y. Am 63; Dounce v. 64 \. Y. 11 1 ; W X. |. Law, 262, 13 Am. Rep. ^ 2, 16 Am. St. I' Y 1 18, 17 Am. Rep. 13; U Rounl v ! 21 1. 13 \m Dec. 42 r v. \m. Rep - Compare Milliken v. Bkilllnjw, Wl Me IfO, 36 \n 77 MMi Mundt V. Sinn '• 1. HO N- W '■^- : •■ l20 Xl " 8( Re P '"" '''■' 276 ACTIONS FOR BREACH OF CONTRACT Eng. Enc. Law, p. 776 ; Gould v. Stein, 149 Mass. 570, 22 N. E. 47, 5 L. R. A. 213, 14 Am. St. Rep. 455 ; Love v. Miller, 104 N. C. 582, 10 S. E. 685; Morse v. Moore, 83 Me. 473, 22 Atl. 362, 13 L. R. A. 224, 23 Am. St. Rep. 783. Said the court in Gould v. Stein, "The general rule is familiar and admitted, that a sale of goods by partic- ular description imports a warranty that the goods are of that de- scription." We cannot say, under the facts of this case, that the defendant, as a matter of law, has waived his right to rely upon the warranty. The twine delivered was Manilla twine, but it was not pure Manilla. It is probable that a special examination of it before acceptance would have resulted in the discovery that it was not as warranted. But the case is not one of the failure of the vendor to deliver any article of the character of that ordered. It was not the purchase of twine, fol- lowed by the delivery of some other article. We hold that under the facts of this case the defendant cannot be deemed, as a matter of law, to have waived his right to rely upon the warranty. It is impossible to lay down a rule on this subject which can be readily applied to the varied facts of different cases. Cases may arise where it is apparent that the purchaser could not have relied on the warranty when he ac- cepted the goods, or that he has waived his right to insist upon such warranty. But we think it would be an extremely unjust rule to in- terpret as an implied waiver the conduct of the purchaser in receiving the goods which do not exactly cofrespond to the warranty, merely because he might, by examination, have discovered the defect. It often happens that the purchaser is so situated that it is necessary for him to accept the article in its defective condition. It would in- deed be singular that one who had placed him in this position should be allowed to escape liability on his contract of warranty. In many cases the inference of a purpose to rely upon the warranty is stronger than the inference of a purpose to pay the price of a good article for a defective one. In the case at bar the jury would have been justified in finding that defendant could not, without particular examination, have discovered that the twine was not pure Manilla. In favor of one who has warranted an article, the purchaser does not owe the duty of careful inspection. He may rely on the warranty. There is much confusion in the authorities. This is the consequence of too much refinement in reasoning, and the making of many nice distinctions. The law on this subject should be adjusted to the needs of the business world, and be made as simple as possible. Without attempting to anticipate the exceptions to the general rule which in the future it may be found necessary to establish, we believe it to be in the interests of justice, and to fairly express the sense of business men upon the subject, that whatever form a warranty assumes, if there is in fact a warranty, the mere acceptance of the property will not, as a matter of law, bar a recovery for breach of the warranty, although an inspection of the property would have led to a discovery of the BREACH OF WARRANTY — RIGHTS AFTER ACCEPTANCE -77 breach. Xor will actual knowledge of the defective condition of the thing delivered necessarily preclude a reliance upon the warranty. All the facts are to be laid before the jury, to the end that they may determine whether the purchaser relied on the warranty, and whether he has waived his right to take advantage of its breach. Gould v. Stein, 149 Mass. 570, 22 X. E. 47. 5 L. R. A. 213. 14 Am. St. Rep. 455 ; English v. Commission Co. (C. C.) 48 Fed. 196; Lewis v. Roun- tree, 78 X. C. 323; Best v. Flint, 58 \'t. 5 13. 5 Atl. 192, 56 Am. Rep. 570; Polhemus v. Heiman, 45 Cal. 573; Coal Co. v. Bradley, 2 Wash. 600, 27 Pac. 454, 26 Am. St. Rep. 890; Hege v. Newsom, 96 Ind. 431 ; English v. Commission Co., 6 C. C. A. 416, 57 Fed. 451 ; 2 Benj. Sales (6th Am. Ed.) p. 856, note 29; Daylor v. Hooglund, 39 Ohio St. 671 : Hollowav v. Jacoby, 120 Pa. 5S3, 15 Atl. 4S7, 6 Am. St. Rep. 73 Parks v. Tool Co., 54 N. Y. 586; Zabriskie v. Railroad Co., 131 X. Y. 72, 29 X. E. 1006; Morse v. Moore, 83 Me. 473, 22 Atl. 3^2. 13 1.. R. A. 224, 23 Am. St. Rep. 783; Canning Co. v. Metzger, 118 X. Y. 260, 23 X. E. 374, 16 Am. St. Rep. 753. In Morse v. Moore, 83 Me. 473. 22 Atl. 362. 13 L. R. V 224. 2 Am. St. Rep. 783, — the best-considered case to be found on the point in the books, — the court say: "The Eact of acceptance, however, a matter of evidence, may have great weight on the question of satis- factory or sufficient performance. In the first place, it raises con erable presumption that the article delivered actually corresponded with the agreement. In the next place, it is some evidence of a waiver of any defect of quality, even if the article did not so correspond, — evidence of more or less force, according to the circumstan the case. If the goods be accepted without objection at the lime, or v, in a reasonable time afterwards, the evidence of waiver, unli plained, might be considered conclusive. But if. on the other hand. objection is made at the time, and the vendor notified of the def< I the defects are material, the inference of waiver would he a gether repelled. But acceptance accompanied by silence' i^ not sarily a waiver. The law permits explanation, and seeks to know the nces which induced acceptance. It might he that tin- bu wa « -nt to act upon his own judgment, or had no i tunity t<» do leclined to do so a- a mat* pendence mainly, as he has a right to do, niM.n the warranty f tl ' i'oii tin ion th r the JU under tin- direction of the 1 1 urt." In I h v. Co v 416, 57 !'< d. 451, the . at pa . 57 Fed., page "Thi in the to thi 1 urch; to accept the I rely upon tl the authoi ities ! " ,1 ,h ' ' ; "' M arrival at the place of delivei und, u] camination, to be .Mind, the pui return them to the v< n to take th< m back, and tl i ind thi 378 ACTIONS FOR BREACH OF CONTRACT tract, or he will be presumed to have acquiesced in the quality of the goods. But the great weight of authority, as well as reason, is now, we think, well settled, that, in cases of this kind and character, if the goods upon arrival at the place of delivery are found to be unmer- chantable, in whole or in part, the vendee has the option cither to re- ject them, or receive them and rely upon the warranty; and, if there has been no waiver of the right, he may bring an action against the vendor to recover the damages for a breach of the warranty, or set Up a counterclaim for such damages in an action brought by the ven- dor for the purchase price of the goods." There is nothing in the de- cisions of this court conflicting with our views in this case. It is claimed by plaintiff that defendant, by renewing the notes given by him for the purchase price of the twine, waived his right to re- coup damages for breach of the warranty. But it is evident that, if a cause of action once existed in his favor for damages, the mere giv- ing of renewal notes would not, of itself, extinguish that cause of action. Even payment of the purchase price would not have that ef- fect. Gilmore v. Williams, 162 Mass. 351, 38 N. E. 976. The cir- cumstance that a purchaser had given his note, or had paid for the property, with full knowledge of the facts, would generally be per- suasive — and might, unexplained, be conclusive — evidence that there was in fact no breach of warranty, or possibly that the purchaser had waived his right. We do not, however, wish to be understood as holding that a mere waiver by implication, without consideration, would necessarily operate to defeat the claim for damages. But the purchaser might negative the presumption of waiver, if such an act could create such a presumption, by showing that, as a matter of fact, he distinctly asserted his right to rely upon his claim for damages. In the case at bar it appears that the new notes were given at the solicitation of the plaintiff's agent, and on his promise that defendant should be allowed his damages. We do not say that a cause of action can be predicated on this arrangement. Serious questions of the ex- tent of the agent's authority, and of the contradiction of a written contract by parol evidence, would have to be met, before we could decide the case on that theory. But the evidence was certainly com- petent to explain the circumstances surrounding the giving of the new notes, to the end that defendant might rebut any possible inference from that fact unfavorable to his claim for damages. The trial court should have submitted the question of breach of warranty to the jury, with proper instructions. For the error of the court in refusing to do so, and in directing a verdict for plaintiff, the judgment is reversed, and a new trial is ordered. All concur. BREACH OF WARRANTY— RIGHTS AFTEB ACCEPTANCE - • V TALBOT PAVING CO. v. GORMAN. (Supreme Court of Michigan, 1S94. 103 Mich. 403, 01 N. W. 055, 27 L. R. A. 96.) Action by the Talbot Paving Company against Charles A. Gorman. Judgment for defendant, and plaintiff brings error. Hooker, J. The plaintiff contracted with the defendant for the delivery f. o. b., Detroit, of a quantity of Medina paving stone, the same to answer the requirements of Detroit specifications, of which defendant had a copy. The contract was made by correspondence. At request of defendant, the plaintiff advanced $2,500 upon the con- tract, and afterwards made other payments, leaving a balance of $1,- 338.47. The requisite amount of stone was shipped to Detroit, where it was unloaded, and used by the plaintiff upon its paving jobs, upon which it was at work. It is claimed upon its behalf that the stone did not conform to the specifications rendering it necessary to put work upon them, of which it seasonably informed the defendant, with the suggestion that he might send men to do such work if he chose, and that he did send men who did some such work. This action was brought by the purchaser, who claimed a balance his due of $684.49 for such work done by it and for some broken stone. The defendant claimed the amount of $1,338.47. The defendant recovered $1,432. which probably included some interest. The court instructed the jury that: "There can be no question, with reference to this executory contract, that the acceptance by the Talbots in the first instance precluded their recouping, as we may say, for the character of the stone, because it did not come up to the De- troit specifications. In other words, they had the opportunity to ex- amine the stone as it was delivered on the cars in this city, and, unless there was something further than that,— unless there was some other promise on the part of the defendant,— then the defendant would be entitled to a verdict for the amount claimed, viz. one thousand three hundred and thirty-eight dollars and forty-seven cents, with interest from November 5^ 1892." The court instructed the jury further that if they should find that the defendant came to Detroit, and agreed with the plaintiff to pay for the work mentioned, there was a moral consideration that would support the promise, and the amount should be allowed to the plaintiff. The principal question in this case is whether the plaintiff, by re- ceiving and using the stone, accepted them as a full compliance with the contract, or whether he had a right to take them, and recover his damages by way of recoupment or action -rowing out of their failure lal the specifications. There are cases which hold that an ac- tance of goods precludes such recovery, and there are others which hold the contrary. On principle, the di tinguishing feature seems to be a warranty. If the sale is without a warranty, and affords an op- 2S0 ACTIONS FOR BREACH OP CONTRACT portunity for ascertaining whether the goods conform to the descrip- tion, the doctrine of caveat emptor applies, and an acceptance cuts off all rights of recovery. The vendee should decline to receive the goods, and sue for a breach of the contract. If, on the other hand, the sale is with a warranty, the vendee may lawfully receive the goods, and recover or recoup damages upon the warranty, which is held to be a collateral undertaking. It is believed that the principle is generally recognized. In addition to cases cited by counsel, see Pierson v. Crooks, 115 N. Y. 539, 22 N. E. 349, 12 Am. St. Rep. 831. It seems to be in the present case; counsel for appellant insisting that an implied warranty exists, while, upon the other hand, it is said that the provision in relation to the specifications is a condition pre- cedent merely. The contract was an executory contract, and may fairly be said to have contemplated the manufacture of the curbing from a specified stone, in accordance with specified dimensions and workmanship. If the agreement to furnish such stone of the specified dimensions was a warranty at all, it is difficult to understand why it was not an express warranty, and, if it was such, there can be no im- plied warranty that the stone should conform to the specifications. Indeed, this does not seem to be claimed. These things were a neces- sary part of the description of the commodity, and nothing more, un- less the face of the contract justifies the conclusion that it was intended as a warranty. Neither party asserts this, and so we turn to the ques- tion of implied warranty. The exact point made by plaintiff appears to be that, inasmuch as the defendant knew what the specifications were, the law implied a warranty of fitness. A pertinent inquiry is, "A fitness for what?" Was it fitness for the paving jobs that the plaintiff had on hand? If this be claimed, it is a sufficient answer to say that the evidence fails to disclose that the defendant knew what jobs he had. Moreover, if the law is to imply that the stone was to be fit for the job, it must be, because defendant knew what the job actually required, and had undertaken to provide that, and his lia- bility would be tested by that. But this was not so. He only knew what the specifications required. They might be right or wrong. He had no means of determining, and it was not left to defendant's judg- ment to make suitable stone for the jobs. He had simply undertaken to deliver certain stone of given dimensions. If he should deliver such he would be entitled to pay. If he did not, it could hardly be claimed that he could require acceptance on the ground that the stone was suitable, or better adapted, to the purpose of the plaintiff than as though made according to direction. Clearly, if plaintiff had fur- nished specifications, and had a right to insist on the stone being in conformity thereto, regardless of defendant's judgment, it could not sustain the proposition that the law should imply a warranty to make them conform to some other test; and manifestly it cannot be said that knowledge of the use intended should require defendant to vary BREACH OF WARRANTY — RIGHTS AFTER ACCEPTANCE 2S1 from his contract as to dimensions. The conclusion appears to us ir- resistible that no such warranty as this can be implied. Breen v. Moran, 51 Minn. 525, 53 X. W. 755, is cited as a case "upon all fours" with this, but we infer from a perusal of that c that the contractor there undertook to furnish stone for a particular purpose which he understood. And in that case the court based the right to recover upon a warranty, and not the failure to perform a condition precedent; thus recognizing the rule of law stated. The distinction between conditions precedent and warranty is clearly re< nized in the Minnesota cases cited in Breen v. Moran. See Maxwell v. Lee, 34 Minn. 511, 27 N. W. 196; Thompson v. Libbv, 35 Minn. 443, 29 N. W. 150. An examination of the brief of the plaintiff's counsel will show that all of the cases cited are based on the existence of a warranty. In this respect they are in harmony with the cases cited by oppo- counsel. See Potter v. Lee. 94 Mich. 140, 53 N. W. 1047. We nol one or two that seem to rest upon facts leading to the inference that a warranty may have been found from a bare promise to deliver go of a given description. Such is perhaps the rule in South Carolina, and possibly other states. But if such can be called a warranty, it is an express warranty, and in this case would be a warranty to de- liver stone according to specification, and not a warranty to del' those fit for the purpose that plaintiff had in hand, whatever that n have been. The correctness of those decisions may be questioned in view of the English and American cases in opposition to them. They seem to be based upon language of Mr. Starkie in hi- work "n I dence, and a discussion to be found in notes to the case of Cutter \ Powell in 2 Smith, Lead. Cas. 1, substantially implying that when the vendee uses the goods to prevent loss or injury the rule should apply. See Cox v. Long, 69 \ T . C. 7; 2 Smith, Lead. C th Am Ed.) p. 36. Hut as counsel has not discussed the point, <>r planted their case upon any such claim, we do not feel called upon or at lib< to discuss or decide the question. It was claimed by the plaintiff that tin- defendant came to 1 ■■ and agreed to pay for the work in question. The court instructed th< jury that plaintiff should recover if they found such to be tl ■ which was as favorable a chai plaintiff was entitled to. T view of the case renders it ui ary t.> 'ion in lation to the admi ion of evidence of the meanin ■ of the term b.," plaintiff t injured by the evidence. The judgment must be affirmed. The other justices concurs ACTIONS FOR BREACH OF CONTRACT 4. Diminution of Damages— Recoupment NORTHWESTERN CORDAGE CO. v. RICE. (Supreme Court of North Dakota, 1S96. 5 N. D. 432, 67 N. W. 298, 57 Am. St. Rep. 563.) Sec ante, p. 275, for a report of the case. TALBOT PAVING CO. v. GORMAN. (Supreme Court of Michigan, 1S94. 103 Mich. 403, 61 N. W. 655, 27 L. R. A. 96.) See, ante, p. 279, for a report of the case. UNDERWOOD v. WOLF. (Supreme Court of Illinois, 1S90. 131 111. 425, 23 N. E. 598, 19 Am. St. Rep. 40.) Action by Frederick W. Wolf against Phineas L. Underwood, James Viles, Jr., and Thomas Jordan to recover the price of refrigerating machines and apparatus furnished and set up by plaintiff for defend- ants in their packing-house under a written contract. Plaintiff ob- tained judgment, which was affirmed by the appellate court. Defend- ants appeal. Magruder, J. 8 The contract bears date February 8, 1886. By its terms the appellee was to furnish and erect the refrigerating ma- chinery, with engine, pump, pipes, etc., in the packing-house of ap- pellants, and have the same in complete working order by the 8th day of May, 1886. The evidence tends to show that the whole plant was not ready for use until the 1st day of July, 1886. * * * But the main controversy between the parties arises upon the fol- lowing provision in the contract : "And it is further agreed * * * that if the machines have fulfilled the guaranties made for them in this agreement by 1st of September, 1886, then said party of the sec- ond part [appellants] shall accept the same; and all payments to be made after the payment to be made on July 1, 1886, shall be promis- sory notes, dated on the day of acceptance of the plant, with interest after maturity." The defendants refused to give, and have never given, the notes thus provided for. What are the guaranties which were to be fulfilled? The plaintiff, Wolf, agreed and guarantied that the machine would maintain certain degrees of cooling temperature in certain rooms in the packing-house, and would cool the rooms with- in a certain specified time; that it would cool a certain number of a Part of the opinion is omitted. BREACH OF WARRANTY — RIGHTS AETER ACCEPTANCE 283 hogs, of a specified weight, within a specified time; that the power required to drive the machinery should not exceed a certain limit ; that the fuel required to produce the steam to do the work of the en- gines should not exceed a certain amount ; that the loss of ammonia in doing the work should not exceed a certain number of pounds ; that the refrigerating machines should be of the best material and workmanship ; that the engine should be capable of running the pack- ing-house machinery in addition to the compresses ; that the iron pip- ing to be furnished should be such as would be necessary to carry and convey the brine required for the proper cooling of the rooms. In considering the nature of these guaranties it is unnecessary to discuss any nice distinctions between warranties on the one side, and conditions precedent or descriptions of the property on the other. It is sufficient that the guaranties are treated as warranties, and their non-fulfillment, if they were not fulfilled, will be regarded as a breach of warranty. Inasmuch as the plant was to be completed by May 8, 18S6, and was to be accepted if the guaranties were fulfilled by Sep- tember 1, 1886, it is manifest that the period between these two dates was to be made use of for the purpose of testing the machines, in order to ascertain whether or not they were such as they were guar- antied to be. It is also sufficiently manifest that, if the machines failed in any of the particulars named in the guaranties, the defects which would thus be shown to exist must be regarded as patent defects, as contradistinguished from latent defects. Where there is a sale and delivery of personal property in praesenti, with express warranty, and the property turns out to be defective, the vendee may receive and use the property and sue for damages on a breach of the warranty ; or, when sued for the purchase price, he may recoup such damages under the general issue, or set them up in a special plea of set-off. This is a well-settled rule. In the present case the contract is executory. The title to the prop- erty did not vest in the purchaser until the period for making the test had passed. It has been held in some states that where the contract is thus executory, and a time is fixed for making a test, the acceptance and use of the property, after such time has passed, amount to a waiv- er of the right to claim damages for a breach of the warranty. But such is not the law in this state. In the present case the evidence tends how that the defendants took possession about July 1, 1886, of the machines placed in their packing-house by the plaintiff, and bad b using the same up to the time of the trial of the cause in the court below. The chief complaint of the appellants is that, under the in- structions given by the trial court, the jury were led to regard the nee and u e of the machinery by the defendants as an aban donment of all right to damages for breach of the warranties. We are unable to regard tin's complaint as well founded. We agree with the I for appellants, in the main, in their view of the law. Wc think that, even where the contract is executory, the claim for dam- 284 'ACTIONS FOR BREACH OF CONTRACT ages on account of a breach of the warranty will survive the accept- ance of the property. Chitty on Contracts, (11th Ed.) at page 652, says: "Where, therefore, the vendor of a warranted article, whether it be a specific chattel or not, sues for the price or value, it is compe- tent to the purchaser, in all cases, to prove the breach of warranty in reduction of damages, and the sum to be recovered for the price of the article will be reduced by so much as the article was diminished in value by non-compliance with the warranty." The previous discus- sion of the authorities by the author, before arriving at the conclusion thus announced, shows his meaning to be that the breach of the war- ranty may be proven in reduction of damages, not only in the case of the sale of a specific chattel, but also in the case of an executory con- tract ; as, for example, "where an article is ordered from a manu- facturer who contracts that it shall be of a certain quality or fit for a certain purpose." Id. 647-652. In Benjamin on Sales, (volume 2, § 1356, 4th Amer. Ed.,) it is said: "The buyer will also lose his right of returning goods delivered to him under a warranty of quality, if he has shown by his conduct an ac- ceptance of them, or if he has retained them a longer time than was reasonable for a trial, or has consumed more than was necessary for testing them, or has exercised acts of ownership, as by offering to re- sell them; all of which acts show an agreement to accept the goods, but do not constitute an abandonment of his remedy by cross-action, or now by a counter-claim in the vendor's action for the price." If the retention of the property by the buyer for a longer time than is reasonable for a trial does not waive his right to damages in an action by the vendor for the purchase price, then there is no reason why his retention of the property for a longer time than that fixed in the con- tract for a trial should amount to such waiver. The rule, as announced by these textwriters, has been held to be the law in this state. In Babcock v. Trice, 18 111. 420, 68 Am. Dec. 560, there was an executory contract for the sale and delivery of corn, with an implied warranty that it should be of a fair and merchantable quality. It was there said: "It is true that the acceptance of corn under an executory contract, with opportunity of inspection at the time of delivery, without complaint, may raise a presumption that it was of the quality contemplated by the parties; but it will not pre- clude the party from showing and setting up the actual defect in qual- ity and condition. * * * He could, * * * under the general issue, prove the facts out of which the warranty arose, the breach, and his damages by way of recoupment," etc. Crabtree v. Kile, 21 111. 184. In Strawn v. Cogswell, 28 111. 457, which was a petition for a mechanic's lien founded upon a contract to furnish iron castings for a grist-mill, and where the defense was that the work was not done in a workman-like manner, and the materials were not of the quality required by the contract, we said: "Improvements of this description being permanent and fixed, and requiring skill to test their sufficiency^ BREACH OF WARRANTY — RIGHTS AFTER ACCEPTANCE 285 their being received and being put to use is not such an acceptance as es- tops the party from claiming damages for their being defective." In the case at bar the refrigerating machines were so built into the packing-house, and so much a part thereof, that their rem mid only have been accomplished with difficulty, and perhaps with injury to the house itself. The mere use of them by the defendant September 1, 1886, might not, of itself, amount to such an i as would preclude them from claiming damages for d Nichols, 41 111. 207, 89 Am. Dec. 381; Peck v. [11. 54. In Doane v. Dunham, 65 111. 512, and same case, 79 111. 131, the tinction between executory and executed contracts was r and it was held that, in the former, the law gives the buyer a I able time for making an examination of the chattels sold; that ; for the jury to determine, under all the circumstances, what is such reasonable time; that a failure to make the examination within a reasonable time may preclude the buyer from offering the property back, rescinding the contract, and avoiding payment on th; ind, but will not deprive him of the right to rely upon the breach of the warranty for damages. The only difference between that case and the one at bar is that there the law gives time for examination or test, while here th tract fixes the time. The same rule, however, will apply to Estep v. Fenton, 66 111. 467. In Owens v. Stui 7 111. 366, it held that, where the contract is unexecuted, the buyer may retain the property, and show the warranty and breach to re- luce the n even though he neglected to return the property u of the breach. In Farmer Co. v. Taylor, 69 111. 440, 18 Am. Rep. 621, the contract was to set up a printing-press in complete run! in the defendant's press-room, within 70 days from the a the plaintiff's proposition, with warranty that the ] complete satisfaction, and granting to the defendant 30 daj from the setting up of the press to decide whether the wai good. The defendant gave no notice of its intention alter tl I passed, but kept the press. It was held that tl of the press indi ting of the title in the buyer, and that the defendant could recoup his damages from the contract i there had been a breach of the warranty. We arc therefore of the opinion that the defendanl in the case at bar, to aim for the com price of the machin h 'Inn wei able to -how that they had sustained from a failure to fulfill the guaranties, if there such a failure. * * * Affirm 1T*BT I Ml KM. LAW LIBRARY UNIVERSITY OF CALIFORNIA LOS ANGELES UC SOUTHER". ,,,,,,,,,,,,,,„ IIIIIIIHIIIIIIIIIII AA 000 695 823 5 fTl