Cyclopedia of Commerce, Accountancy, Business Administration, v. 03 (of 10)

by American School of Correspondence

The states, generally, have a statute modelled after this section of the English statute, and providing that contracts for the sale of personal property, the price of which exceeds fifty dollars, shall not be enforceable unless a memorandum of the contract be made and signed, except there be a delivery of at least a part of the property, or except something be paid by the purchaser to bind the bargain. Some of the states have no statute of frauds containing a provision relating to the price of the goods. In many of the states, the valuation fixed by statute exceeds fifty dollars. Where the statute exists, contracts which are not in writing are not void. They are merely voidable. The parties may voluntarily carry them out if they so choose. The law does not prohibit them, but if one party refuses to recognize the contract, the other party cannot enforce it by an action at law. A portion of the fourth section of the English Statute of Frauds provides that contracts, by their terms not to be performed within one year from the time of the making thereof, must be in writing to be enforceable. The states, generally, have a similar statutory provision. This statute applies to sale of personalty as well as to real estate. If the contract can be performed within one year, it is not within the provisions of the statute.

209. Delivery of Personal Property Sold. In the absence of any express agreement to the contrary, there is an implied agreement, on the part of the seller, to deliver personal property sold, when the purchaser pays the price. By delivery is meant placing the personal property at the disposal of the purchaser. It must be borne in mind that in a contract of sale of personal property, title or ownership passes to the purchaser at the time the sale is made, even though possession remains in the seller. This gives the seller the right to obtain possession of the goods upon paying the price. If the goods are destroyed without fault of the seller after the sale, and before delivery, the loss falls on the buyer. If A offers to sell B his wagon for $100.00, and B accepts, nothing being said about delivery, the title to the wagon passes at once to B. If it is destroyed without fault of A, the loss falls on B, even though B has not paid the price or received possession of the wagon. B is entitled to possession of the wagon when he pays A $100.00. A is not obliged to give B possession of the wagon, even though B is the owner of it, until he receives the price, $100.00.

In the above example there is no stipulation about delivery. The parties make a sale, agreeing upon the price and thing to be sold, nothing being said about the delivery. The law in such cases impliedly requires the seller to deliver when the price is paid, and not until then. In many contracts, however, the time, place, and manner of delivery are stipulated in the contract. Sometimes usage and custom supply these things when the parties do not expressly so stipulate. When a time, place, or manner of delivery by the seller is stipulated in a contract, either by express agreement, or by usage and custom, title to the property usually does not pass to the buyer until the time has elapsed, and until the seller has delivered according to the manner stipulated, or has tendered delivery.

A stipulation in a contract of sale that the seller shall deliver at a particular time or place, or in a particular manner is deemed to show an intention on the part of the parties that title shall not pass until the seller has so delivered. If the seller refuses to accept the goods or pay the price, an offer to deliver by the seller is equivalent to a delivery. The seller, on the other hand, is not obliged to give up possession of the goods until he receives the agreed price. If the seller agrees to give the buyer credit, this rule is not applicable. If no time of delivery is mentioned, delivery must be made within a reasonable time, depending upon the circumstances connected with the particular contract. When delivery is to be made in installments, failure to pay for one installment ordinarily entitles the seller to refuse to deliver the balance, or if the seller refuses, or fails to deliver the first installment, the buyer may refuse to accept subsequent installments. The buyer is not obliged to accept anything except the article ordered. If more or less is tendered him, he is not bound to accept. If he accepts more or less, he is bound to pay the reasonable value of the same. If no place of delivery is mentioned, the presumption is that delivery is to be made at the place where the property is located at the time the sale is made.

The mere fact that delivery is to be made in the future does not prevent title from passing at the time the sale is made. There must be something in addition to the fact of future delivery to delay the passing of the title until the time of delivery. If A purchases an automobile from B, making the selection, delivery to be made the following Thursday, title passes at once to A. If the automobile is destroyed by fire, or injured without B's fault, the loss falls on A. If, however, B is to do anything with the property, or is himself to make delivery, this shows an intention on the part of the parties that title is not to pass until delivery is made.

210. When Title Passes. The question of when title to personal property, the subject of a sale, passes to the purchaser is important in determining upon whom the loss falls, if the property is destroyed, stolen, lost or levied upon by judgment of attaching creditors. Title or ownership to property sold does not depend upon possession. Personal property may be sold, and title or ownership may pass to the purchaser, while the seller still has possession, as well as the right to possession. The general rule is that title or ownership of personal property sold passes to the purchaser at the time the parties to the sale intend it to pass. If their intention is expressed, it governs, and the question is settled. In the great majority of sales, however, the parties do not expressly determine when title shall pass and this must be presumed from the circumstances.

For example, if A offers B $20.00 for a certain harness which is selected, and A accepts the offer, nothing being said about the delivery or payment, or when title or ownership shall pass to A, the law presumes it to be the intention of the parties that title shall pass when B accepts A's offer—and from that time, the harness belongs to A. B, however, has the right to retain possession of the harness until A pays him the purchase price of $20.00. When A offers B the $20.00 at the place where the harness was located when the sale was made, B must give A possession. B is not obliged to deliver at any other place. If, however, A offers B $20.00 for B's harness, which is determined upon and selected, B to deliver same at A's place of business the following evening, this shows an intention on the part of the parties that the title is not to pass to A until B delivers the property to A the following evening. A tender or offer by B to deliver the property to A the following evening, passes title and places the property at A's risk. If, however, delivery is to be made merely in the future, not requiring the seller to take the property to any particular place, the fact that delivery is to be made in the future does not prevent title passing to the purchaser at once.

If A purchases B's harness for $20.00, the harness having been selected, delivery to be made in five days, title passes at once to A.