Section 3. On the Just Price

594. Notion. Price is the value of a thing expressed in money. The value of a thing is the common estimation of men concerning the thing in some region, which estimation depends especially on the utility which the thing brings to men. That price is called just which is considered to equal the value of the merchandise. Further, a threefold price is distinguished: legal, common or natural, and conventional.

595. On legal price. 1. Legal price is called that which is determined by public authority, by statute of the prince or magistrate.

a. Legal price is not divided into highest, middle, and lowest, but is mathematically determined and is presumed just, unless the contrary is established. Besides, today it is rarely any longer in use.

b. A private man who by knowledge justly acquired has learned that the legal price of the merchandise is shortly to be changed can without injustice sell his own things or buy another's at the current price, because the price is still just; yet he sins against charity if by this mode of acting, for the sake of his own gain, he inflicts grave damage on a poor person. But a public person, to whom it is not permitted to use with the damage of others knowledge which he has by force of office, can at most buy things necessary for his own use or sell his own superfluous things.

2. A law which determines legal price obliges in conscience and from commutative justice: for it is established by public power concerning an object which pertains to it, by reason of the common good, and it refers to exchanges.

Therefore he who, without a just title, sells a thing above the legal tax commits injustice and must restore the excess of the price to the buyers. Indeed frequently also he who sells a thing below the legal tax commits injustice, not indeed against the buyers, but against other sellers, to whom damage is inflicted in this way and must be repaired. For legal price is established not only in favor of buyers, but often also in favor of other sellers. Whether this has in fact been done by a law obliging in conscience must be gathered from the tenor of the law.

596. On common or natural price. Notions. 1. Common price is called that which is determined by the common estimation of men, and therefore which men commonly pay for some merchandise at a determined place and time.

2. Common price is not mathematically determined, but highest, middle, and lowest are distinguished: for the prudent estimation of men is not mathematically fixed and determined, but has a certain moral breadth.

a. How great the breadth of the common price is, or how great the distance between the highest and the lowest is, cannot be determined by one rule, since it depends on many and diverse circumstances. Generally, the price of a thing necessary for life has a smaller breadth, the price of a superfluous thing a greater breadth, and the price of a very rare and precious thing the greatest breadth.

b. For things which commonly serve the uses of life, the breadth of the just price between lowest and highest can ordinarily be determined according to this norm. If the middle price is 5, the lowest will be 4, the highest 6; if the middle is 10, the lowest will be 8, the highest 12; if the middle is 50, the lowest will be 45, the highest 55; if the middle is 100, the lowest will be 90, the highest 110. Yet extraordinary circumstances, such as an unexpected coming together of buyers in a particular case, for example, at markets, can bring it about that the highest price is notably increased.¹

c. The circumstances which ordinarily influence the saleable value of merchandise are chiefly abundance or scarcity of merchandise, abundance or lack of money, multitude of buyers and sellers, the mode of selling either in a small or in a great quantity, expenses, damages, dangers, and labors which commonly occur in acquiring and preserving merchandise: for their compensation is justly required. Which commonly occur: for on account of the expenses or labors of some singular merchant the price cannot be increased, because the expenses and labors of one person do not change the common estimation, which regards things commonly happening.

¹ Cf. St. Alphonsus, n. 804; Lehmkuhl I, n. 1117.

597. Principles. 1. When legal price is lacking, the common price must be held as just: for the common estimation indicates the saleable value which the thing has in that place.

Common estimation makes the price just, even if that estimation seems imprudent; hence among barbarous peoples gold or ivory can justly be exchanged for glass or cloths: for the common judgment among those peoples attributes great value to things which elsewhere are of very little value.¹

2. Since any common price is just, merchandise can be sold and bought within the limits of the common price without lesion of justice; but the price which exceeds the highest or does not reach the lowest must ordinarily be considered unjust.

a. Therefore he who sold a thing above the highest is bound to restore the excess, and he who bought a thing below the lowest is bound to supply the defect. In the external forum an action is conceded for rescinding sale both to the buyer and to the seller who has been deceived beyond half the just price.² From this statute of law it does not follow that a buyer or seller who deceives the other short of half the just price is excused from restitution in the internal forum.

b. It can happen that even a price which does not exceed the highest is unjust, namely where the seller by frauds or lies leads the buyer to giving a greater price than he would have given if he had not been deceived: for anyone has the right of requiring that he not be impeded by frauds from buying at the price which he would have wished to give and which is not unjust. Yet the lies by which merchants are accustomed to exaggerate the price of a thing are not considered true frauds.³

3. From a just title it is licit to sell a thing above the highest common price, or to buy below the lowest.

¹ Cf. Lugo, disp. 26, n. 42.

² C.A. Section 1060.

³ Genicot I, n. 633.

598. A title of this kind is had: a. If the seller from the sale or the buyer from the purchase suffers peculiar damage.

If someone in favor of the buyer immediately sells merchandise which he would have kept for another time when it would have had a greater price, he can require a price above the highest; and if someone in favor of the seller now buys a thing which he needs only when it will be of lower price, he can buy at a price below the lowest.

b. If the seller has a special affection toward the thing which he sells in favor of another: for the seller deprives himself of the pleasure which the thing affords him; but this privation is estimable by price, which can be required beyond the highest common price.

alpha. The common opinion with St. Thomas¹ denies that a greater price can licitly be required because the thing brings peculiar utility or pleasure to the buyer: for the seller would require a price for something which is not his. Yet among more recent authors there are some, Gousset, Schwane, Marres, Woffelaert, Genicot, who hold the contrary opinion as probable. Nor is this opinion wholly without reason: for he who, with no necessity compelling him, knowingly consents to a greater price is considered to give the excess of the just value. But today almost common use has this, that a thing which brings a peculiar convenience to the buyer is sold more dearly. Yet an exorbitant price is by no means permitted to be required.

beta. But all affirm that this is valid only when the buyer seeks from the thing to be bought nothing except convenience or pleasure; but that he commits injustice who requires a greater price for this reason, that the other needs this thing: for mere want and necessity, which compels the other to buying the thing, is not estimable by price, nor is the needy person considered to give the excess of the price.

c. If the seller of his own accord offers the thing to be sold, it is permitted to buy below the lowest price: for the value of a thing to be sold decreases the more, the greater the service which is furnished to the seller by purchase. Hence it is said by way of proverb: things voluntarily offered become cheap.

d. If payment of the price is delayed, the thing can be sold more dearly; and if it is anticipated, the thing can be bought more cheaply: for just as gain arises from anticipated payment, so damage arises from delayed payment.

Whether it is permitted to sell merchandise below the lowest common price in order to entice buyers, if in this way other sellers suffer damage.

a. This manner of acting of itself is repugnant neither to justice nor to charity, whether other sellers can procure merchandise for themselves at the same cheap price and sell it at the same price, or whether they cannot, provided frauds and lies are excluded. It is not repugnant to justice, because the sellers use their own right; nor to charity, since charity does not oblige with grave inconvenience, and therefore does not require that someone deprive himself of gain so that another not suffer damage.

b. If sellers who sell their merchandise below the lowest price with damage to others use lies or frauds, they act against justice and are bound to repair damage to the other sellers, if, for example, they adulterate merchandise or lessen weights and measures. It is clear that justice in this case is not injured against the buyers, if namely the price is diminished in the same degree in which the quantity or quality of the merchandise is diminished, but that it is injured against other sellers, from whom buyers are turned away by fraud.

¹ Cf. Summa II-II, q. 77, a. 1.

599. On conventional price. 1. Conventional price is called that which is determined by the free agreement of seller and buyer.

2. Those things have a merely conventional price which, since they are placed outside common commerce, have neither a legal nor a common price.

3. The conventional price of these things is just unless it is of plainly irrational greatness.

4. Very few things are had which can be bought and sold by a merely conventional price:

a. Works of exceptional art, as paintings drawn by a celebrated artist, or very precious things, as gems of extraordinary magnitude, or very rare things, as ancient manuscripts.

b. Cheap things or things already worn by use, such as are the things which are sold by dealers in old goods.

c. Things whose common value is equally unknown by each contracting party, concerning which nevertheless they are doubtful, so that each equally exposes himself to advantage or damage.

alpha. If the contracting parties in this case nevertheless agree concerning a certain price, they mutually condone to each other the excess or defect of the price; wherefore if the buyer afterward sells the thing with the greatest gain, by right he is bound to return nothing to the seller.

beta. From this case must be distinguished the case in which each contracting party, erring about the thing itself, buys a thing of great value at a slight price. Hence a contract is invalid by which someone buys at a cheap price a gem which each considered to be glass, or that by which someone buys at a slight price a precious image of a most celebrated painter which each contracting party thought to be a common panel: for there is substantial error.

If a precious thing is bought at a small price, judgment concerning the justice of the sale must be made thus: a thing is worth as much as it is commonly estimated.

alpha. If the true value of the thing is known by all skilled in the art, the sale is unjust, because the thing in common estimation has a greater value. But if the true value of the thing, either by chance or because of singular skill, is known only to the buyer or to a few others, but publicly is unknown in common estimation, the sale is just.

beta. If a thing cheap in common estimation after the sale is at last known, whether by the immediate or mediate buyer, to be precious, the purchase is just, and therefore neither the first nor the mediate buyer is bound to anything, but can retain the thing.

gamma. If the thing sold-bought is in itself altogether unknown, as being hidden in another thing bought, for example, a fish is bought from a fisherman, in whose belly a precious thing is found; or a garment is bought from a dealer in old goods, in which a precious thing sewn in is found; a thing which belongs to no one becomes the property of the first occupier, but a thing which has an owner is his; but if the owner is unknown, the thing is held as abandoned.¹

¹ Cf. Lehmkuhl I, n. 1120; Ballerini-Palmieri III, n. 773; Genicot I, n. 635; Sporer-Bierbaum II, tract. 6, n. 711 ss.