198. Indemnity. The law implies a contract on the part of the principal to a suretyship contract to pay the promisor when the latter pays the suretyship obligation. For example, if A guarantees B's debt to C, as soon as A is obliged to pay C, and does pay C, A may sue B on an implied contract of indemnity for the amount he has paid C.
199. Contribution. Contribution is the term applied to the right of one of two or more co-promisors to a suretyship obligation to secure a pro rata share from his co-promisors of the amount he is obliged to pay the creditor on a suretyship contract. For example, if A, B and C guarantee D's debt of $150.00 to E, and when the debt is due, E sues A and collects $150.00 from him, A can sue B and C for $50.00 each. If A pays C only $50.00 he can collect nothing from B and C, since this is only his share of the debt. But if A settles the debt with C for $50.00, he can recover one third the amount from both B and C. A can pay the debt when it is due, without waiting for suit if he so desires, and proceed to collect one third the amount from both B and C.
PERSONAL PROPERTY
200. Personal Property in General. Personal property is the term applied to property other than real estate. It may be either tangible or intangible. Personal property is sometimes divided into chattels real and chattels personal. Chattels real are interests in real estate not amounting to ownership. Real estate mortgages and leases are common examples of chattels real. Chattels personal embrace all personal property other than chattels real. Every thing subject to ownership not connected with the land is included in the classification of chattels personal. Promissory notes, personal apparel, furniture, tools and animals are common examples. Chattels personal are of a tangible, or of an intangible nature. They are mere rights, or they are things which may be handled and used. A promissory note, a contract, or a mortgage is a right as distinguished from a thing in possession. These rights are sometimes called choses in action, while tangible articles of personal property, such as watches, chairs and horses are called choses in possession. The law relating to personal property is discussed at length under the sections on Sales of Personal Property, Pledges, Chattel Mortgages, Carriers and Wills.
201. Acquisition of Title and Transfer of Personal Property. Title to personal property may be acquired in several ways, chief among them being by contract, by possession, by gift, and by operation of law. If A purchases a carriage from B, the transaction is a sale of personal property and A is entitled to possession of the carriage by reason of the contract. Title to the carriage is given to A by contract. Title to some kinds of property is acquired by possession. Title to wild animals is acquired by possession. The same is true of fish. Title to lost property, except as against the owner, is acquired by possession. Title to property is also acquired by voluntary gift on the part of the owner.
If A dies possessed of articles of personal property, the property passes to his personal representative to be turned into money to pay A's debt, or to be distributed in the form of money, or without being sold, to A's descendant designated by law. This is known as acquiring personal property by succession, or by operation of law. Personal property may also be transferred in specie by will.
SALES
202. Sale Defined. A transfer of title of personal property is termed a sale. By title is meant ownership. Mere possession of personal property does not constitute ownership, neither does right to possession constitute ownership. One may lease personal property, and by means of the lease have the right to possession, while the title or ownership is in another. One may find or borrow personal property, obtaining possession while the title or ownership remains in another. The transfer of the title or ownership of personal property as distinguished from the transfer of mere possession or the right of possession, constitutes the subject of Sales. A sale may be defined to be a contract by which the title to personal property is transferred for a consideration in money, or money's worth. This transfer of title to personal property may be entirely independent of the transfer of possession. One may make a sale of personal property by which the purchaser takes the title while the possession remains in the seller, or in some third person.
When, and under what circumstances the title passes is an important question. A sale of personal property ordinarily gives the purchaser the right to immediate possession of the property. The time the title actually passes to the purchaser does not depend upon the time the property is delivered to the purchaser, but upon the intention of the parties to the contract of sale. A sale is a contract requiring all the elements of a simple contract. There must be a meeting of the minds of the contracting parties, a valuable consideration, competency of parties, etc. (See Elements of a Contract, chapter on Contracts.)
203. Sale Distinguished from a Contract to Sell. A sale is a contract by which the title passes to the purchaser at the time the sale is made. A contract to sell is a contract by which the title passes to the purchaser at a future time. A sale is a present transfer of title or ownership to personal property. A contract to sell is an agreement to pass the title or ownership to personal property to another at a future time. The practical distinction is in determining upon whom the loss falls in case the goods are destroyed or injured by fire, or other accident. In case of a sale, title or ownership passes to the purchaser, even though possession remains in the seller. If the goods are lost by fire, without fault of the seller, the purchaser bears the loss. In case of a contract to sell, the title or ownership does not pass to the purchaser until the time for fulfilling the contract has arrived, and until the conditions of the contract are fulfilled. If the goods are lost before the contract is carried out, the loss falls on the seller. For example, A, a farmer, sells ten barrels of apples to B. B examines the apples, selects the ten barrels, pays A the stipulated price, and says he will call for them the following day. Before B calls, the apples are destroyed by fire, without fault of A. B must stand the loss. The title or ownership passed to him when the sale was made. If B calls on A and enters into a contract by the terms of which A agrees to deliver at B's residence ten barrels of apples the following day, at an agreed price, and the apples are destroyed by fire before A delivers them, the loss falls on A. This is a contract to make a sale, not a sale. Title to the apples does not pass to B until they are delivered by A, according to the terms of the agreement.