Case 7. Sale

Caius wished to sell his house, which was rather old; first, however, because, as he said, newly built houses are daily sold at a high price as though old, he concealed the cracks of the walls inside with new paper and, with the aid of paint, made almost everything outside appear as though new. Afterward he placed in a newspaper a notice concerning a very desirable house for sale, and within a short space of time a certain Julius willingly paid two thousand pounds for the house. After some weeks, however, Julius heard from the account of others what Caius had done, and although the house served all uses well, nevertheless, since he did not wish to retain such a house, he sold it and obtained a price of no more than one thousand pounds. When Caius, a Catholic, heard these things, the scruples that previously had not been entirely lulled were greatly increased, and consequently in his next confession he consults the confessor concerning the whole transaction. Hence it is asked:

1. What is the contract of buying and selling?

2. What is a just price, and what is the value of things?

3. How does error concerning the quality of a thing affect a contract of buying and selling, and especially the price?

4. What is to be said of the case?

1. What is the contract of sale? Sale is a contract by which the seller transfers the owner- ' ship of a certain commodity to the buyer in consideration of a fixed price.

2. What is the just price, and what is the value of things?

The just price of a commodity is the money equivalent of the value of that commodity. Value in general is the worth of a thing, and it is of various kinds. We value an old friend, we esteem his worth; this may be called esteem-value. We also value a pocket-knife for the use it has; this is called use-value. If we want to sell the knife we think of its exchange-value — what other people are prepared to give for it. This exchange-value will depend upon the social estimate of the worth of the knife in the place and at the time in question. Remotely it will depend on what it costs to produce such knives, on supply and demand, on the manner of sale, etc..¹

1 Manual of Moral Theology, vol. i, p. 523.

3. How does mistake about the quality of a commodity affect the contract of sale and especially the price?

Mistake about a quality of a commodity which was not the motive of the contract does not make the contract invalid nor rescindable, but the price should of course be morally equivalent to the value. Mistake about a quality which was the motive of the contract does not make the contract invalid, but it may be rescinded by the buyer if he discovers that he was deceived by the seller.

4. The case. Caius, by means of paper and paint, concealed the defects of his house and sold it for twice its value. He thereby committed a sin against justice by getting more for his house than it was worth, and he is bound to make restitution for the injury to Julius, the buyer of the house. Julius might have rescinded the contract and brought an action for deceit against Caius to recover damages for any loss that he sustained by the transaction.