Buying and Selling

587. Notion. Purchase-sale is a contract by which two persons agree between themselves concerning merchandise to be handed over for a price. Therefore three things pertain to the essence of this contract: a. mutual consent of buyer and seller; b. some thing, either movable or immovable, as merchandise; c. money as price.

a. This contract in itself is indeed one; but because it necessarily involves two acts, buying and selling, it is usually signified by the joined double name purchase-sale.

b. Sale is a consensual contract, which is perfected by consent alone; therefore by natural law neither the handing over of the thing and price nor any solemnity, for example writing, is required for the essence of this contract. Yet positive laws generally establish that by consent itself only a right to the thing is acquired, namely, on the part of the buyer, the right of accepting the merchandise, and on the part of the seller, the right of accepting the price; but ownership or the real right in the merchandise and in the price is acquired only by the handing over of the merchandise and price.¹ These dispositions of law must also be observed in conscience, unless the contracting parties themselves knowingly and voluntarily establish something between themselves contrary to the dispositions of civil law, which they can licitly do, provided they preserve the norms of natural justice.

c. For the essence of this contract it is required that it be made concerning merchandise on the one side and money on the other side, or concerning a price to be handed over for merchandise and merchandise for a price: for if on each side it is made concerning merchandise, there is not sale but exchange; and if on each side it is made concerning money, there is exchange of money.

¹ Thus also C.A. Section 1053 and C.G. Section 433, with which Roman law agrees, but not English nor Belgian law.

588. Division. 1. Purchase-sale is divided into natural and artificial. It is called natural or economic if those things are bought which are necessary for sustenance, and superfluous things are sold; and it is called artificial if things are bought with the intention of selling them with gain. Artificial purchase-sale is called trade.

2. Artificial purchase-sale is twofold: lucrative, when a thing is bought so that, without change of itself, it may be sold at a higher price; and simply artificial, when a thing is bought so that it may be changed naturally or by industry and, once changed, be sold at a higher price. By the former sale trade is exercised in the stricter sense; by the latter, trade in the broader sense.

Three sales especially are to be considered in species: sale by auction, monopoly, and sale through brokers.

600. On sale by auction. Sale by auction, auction, bidding (Versteigerung) is a sale by which, when several buyers come together, a thing is sold in such a way that it is adjudged to the one offering the greater price.

a. Sale by auction is one kind voluntary, another judicial or forced, according as it is done spontaneously by the owner of the thing or is commanded by law, for example, for paying creditors.

b. In sale by auction the thing to be sold is estimable the more as more buyers come together, because with many coming together and offering there is hope of accepting a greater price.

c. The just price in sale by auction is that which is constituted from the bidding itself without fraud, namely that which is offered by the last bidder, whether it is above the highest or below the lowest.

d. The equality required for the justice of the contract consists in this, that on each side there is the same hope of gain and the same danger of damage.

601. Obligations of the seller. a. He is bound to hand over the thing to the one offering more, even if the price has remained below the lowest: for sale by auction implicitly contains the contract of handing over the thing to him who offers more, unless there exists a custom of withdrawing the thing if at least the lowest price is not offered.

b. It is not permitted to send fictitious bidders, who without intention of buying the thing intend only to increase the price of the thing: for bidders have the right of requiring that the price be increased only through the concurrence of buyers and not by frauds.

Authors disagree whether the seller himself, either through himself or through another, can join himself to the bidders. If the bidding is forced, they commonly concede this, because the sale is made not by him but against his will; if it is voluntary, they forbid it, because this would be the same as withdrawing the thing.

c. It is not permitted to change afterward into worse things those things exposed for sale and already inspected by the bidders.

602. Obligations of buyers. a. They are bound to take care that they do not impede others by force or frauds from bidding or from offering a greater price. In this matter sin is committed against justice in two ways: both against him who is impeded from bidding and against the seller, who is deprived of greater gain.

b. They can ask and exhort others to abstain from bidding, because the seller does not have the right that someone come together for buying. Whether it is unjust to agree with another not to bid is disputed.

St. Alphonsus (n. 808) affirms that it is unjust, because the seller has the right of requiring that anyone be able freely to intervene in the bidding; Lehmkuhl (n. 1120) and Ballerini (n. 771) probably deny it, because the agreement of some to abstain from bidding does not prevent others from coming together; but that determined men come together for the bidding, the seller cannot require. Moreover one is not impeded from bidding by force or fraud, but by a just means, namely by a pact freely entered.

603. On monopoly. Notions. 1. Monopoly is the exclusive power of selling certain merchandise, which belongs to one person only or to a few only.

2. A distinction is made between monopoly of right or legal monopoly, which is exercised by public authority, and monopoly of fact, which is exercised without public authority by the deed of private persons. This monopoly especially arises from this, that one or several buyers buy up all merchandise of a certain kind in some place at a modest price and afterward sell it at a great price.

Monopoly of right is either public (Staatsmonopol) if civil society itself reserves to itself the right of selling certain merchandise; or private, if a man or particular society has the exclusive right of selling certain merchandise.

604. Assertions. 1. Public monopoly of right is of itself licit, even if because of it certain merchandise is sold above the highest price which otherwise, with monopoly excluded, it would have. For this monopoly pertains to the means which public authority employs in order to procure for itself money necessary for promoting the common good, and therefore the increased price of the thing has the character of an indirect tax.

2. Private monopoly of right is likewise licit: for public authority from a just cause of the common good can concede rights and privileges to men or particular societies, such as are customarily conceded to inventors of a new art. Those who enjoy this monopoly sin against justice if they sell their things at an excessive price; but the just price of such things can scarcely be established, especially if they have been made by a new art. Others sin against justice if they injure their privilege by making and selling similar things.

3. Monopoly of fact of itself is not repugnant to justice, provided the sellers do not exceed the highest price which the thing had before the monopoly: for by buying up merchandise of a certain kind in some place, they use their own right and, as is supposed, sell it at a just price. But it is against charity if others, especially the poor, with grave inconvenience to themselves, are forced to buy necessary things at a greater price.¹

4. Similar to monopoly of fact is an agreement entered among all sellers of some certain merchandise not to sell it below a determined price (Ring).

a. With force or fraud excluded, this agreement is not opposed to justice if the price does not exceed the highest which the thing would have if the agreement were excluded: for the individual merchants use their own right of not selling their own thing except at the highest price.

b. But it is opposed to the charity owed to buyers if in this way things necessary either to all or to many are sold at the highest price, because to their own damage they are forced to buy at a higher price things which otherwise they would have received at a cheaper price. The same cannot be said concerning things not necessary, because they can abstain from buying these things.²

¹ Cf. Ballerini-Palmieri III, n. 789.

² Genicot I, n. 641. Cf. Lugo, disp. 26, n. 172 ss.

605. On sale through brokers. Notions. a. Sale through brokers is called that which is made by others from the commission of the owner of the thing to be sold.

b. A broker (Makler, Sensal) is called one who buys or sells in the name of another.

There are brokers who are constituted by public authority for exercising this office, and there are brokers who are constituted by owners alone for buying or selling certain things, as children of the family who buy for parents, servants who buy for masters, craftsmen who buy for those from whom they undertook work to be completed.

c. Brokers by their nature are mandataries of those in whose name they sell or buy; wherefore the obligations of a mandatary must also be applied to brokers.

606. Principles. 1. A broker who sells a thing above, or buys below, the price designated to him by the owner cannot retain the profit for himself, unless he acquired it by extraordinary industry: for since he acts not in his own name but in the name of the owner, what he acquires by negotiating he acquires not for himself but for the owner.

2. It is not permitted to a broker to buy for himself a thing to be sold at a determined price and afterward to sell the same thing at a higher price and retain the excess for himself: for the owner is considered to have excluded this mode of acting, as harmful to himself, except in the case in which the broker, after using moral diligence, does not find another buyer. Yet then he must seriously carry out the purchase and take the danger of the thing upon himself.

3. A broker can retain those things which merchants remit from the just price in his favor. But attention must be given whether the merchants remitting from the price intend in reality to favor the buyer or the mandator.

If brokers buy frequently and for diverse men, as craftsmen do, the remission of the price is considered to be made rather in favor of the buyer; but if brokers always buy for the same person, as servants and children of the family do, merchants are considered to remit from the price rather in favor of the mandator.

SALE is a contract by which the seller transfers the ownership of a certain commodity to the buyer in consideration of a fixed price. The English law on the sale of goods is different from that on the sale of real property, and so we will divide this chapter into two articles; in the first we will treat of the sale of goods, and in the second of the sale of realty.

As regards the alienation of ecclesiastical property see Can. 1530 ff.

The term goods includes all personal chattels other than things in action and money. It also includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.¹

A contract of sale of goods may be made in writing, or by word of mouth, or partly in writing and partly by word of mouth, or it may be implied from the conduct of the parties. If the value of the goods sold be ten pounds or upwards, the contract cannot be enforced by action unless the buyer accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the contract or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agent in that behalf. This is a rule of the external forum and does not affect the conscience.

¹ Sale of Goods Act, 1893.

The subject-matter of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract of sale. The contract may be absolute or conditional. Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract, and in the forum of conscience on the intention of the parties. In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is: (1) An implied condition on the part of the seller that in the case of a sale he has a right to sell the goods, and that in the case of an agreement to sell he will have a right to sell the goods at the time when the property is to pass; (2) an implied warranty that the buyer shall have and enjoy quiet possession of the goods; (3) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.

According to English law there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:

1. Where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgement, and the goods are of a description which it is in the course of the seller’s business to supply (whether he be the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose, provided that in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.

2. Where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality; provided that if the buyer has examined the goods there shall be no implied condition as regards defects which such examination ought to have revealed.

But whatever may be the rules of law for the external forum, in the forum of conscience the contract will be invalid whenever on account of hidden defects the thing sold is substantially different from what the buyer thinks that it is, for then there is no consent in the same matter and the contract is void by natural law. If hidden defects only lessen the value of the thing, but do not make it substantially different from what it appears to be, the price should be accommodated to the value, but the seller is not bound to point out the defects to the buyer. If asked about them, the seller should make known even accidental defects, or say that he does not guarantee their absence. _

By law the price may be fixed by contract, or may be left to be fixed in manner thereby agreed on, or it may be determined by the course of dealing between the parties. If no price is thus determined, the buyer must pay a reasonable price, and what is a reasonable price is a question of fact dependent on the circumstances of each particular case,¹ In conscience, however, the price of things sold does not depend merely on the agreement of the parties. In contracts the equality which justice demands must be observed, and so in sale the price must be equivalent to the value of the thing sold. We do not mean the individual value in use to the buyer or to the seller, but the social or exchange value which the thing possesses. This value will be represented by what the law calls a reasonable price, and sometimes it is fixed by law, so that certain commodities and services have a legal price. In the Middle Ages there was a legal price for most of the articles of commerce, and theologians taught that there is an obligation in conscience to adhere to the legal price as long as the law is in force. In cases where the law has not determined the price, theologians teach that there is an obligation in conscience to adhere to the natural or common price of the commodity. This is not something purely subjective, much less is it purely individualistic; it depends upon supply and demand, upon the costs of production, the manner of sale, and on other factors. It is proximately determined by the common judgement or the common estimation of those who are best acquainted with all the factors which determine social value in the particular case. This is the famous theological doctrine of the just price of commodities, and it only needs to be properly understood to be appreciated as eminently practical and equitable. The just price of a commodity is not something which can be mathematically determined; it admits of a certain latitude, like everything that depends on a general moral estimate. Theologians distinguish the highest, the lowest, and the mean just price. The highest is that above which the commodity in question is not commonly sold, the lowest is that below which it is not commonly sold, and the mean is between the two. Justice will be observed if the price at which a thing is sold is not above the highest nor below the lowest at which the thing sells at the time and in the place in question. As a rule, market prices are just, because they are settled according to the common estimate of buyers and sellers as to what are fair and reasonable prices under the circumstances, Here theologians usually discuss a number of questions concerning the price of commodities in particular cases where there is special difficulty. In the case of rare or single objects, such as a first folio of Shakespeare, or a painting by a great master, or a winner of the Derby, where there is no market price, many theologians teach that no injustice is committed whatever be the price received from a buyer who acts with full freedom and knowledge. Fancy prices may be foolish, but they are not unjust. No difficulty is made by theologians in allowing one to sell at the current rate who has certain information of an imminent fall in price. A merchant may also buy things of value from uncivilized owners for trinkets. In the place and among the people concerned there is equality of value between merchandise and price. A seller is justified in asking a higher price—a price of affection the theologians call it—for what he cannot part with without more than ordinary pangs. The seller may not, however, charge for some special value in use which the thing sold has for the buyer. That belongs to the buyer, not to the seller, who cannot therefore sell it.

¹ Sale of Goods Act, 1893, sec. 8.

The following rules as to the transfer of property in the goods sold are given in the Sale of Goods Act, 1893: Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained. Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.

Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer: Rule I.—Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.

Rule II.—Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods, for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.

Rule III.—Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, ‘Measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done and the buyer has notice thereof.

Rule IV.—When goods are delivered to the buyer on approval or “‘on sale or return,” or other similar terms, the property therein passes to the buyer: (a) When he signifies his approval or acceptance to the seller or does any other act adopting the transaction; (b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact.

Rue V.—Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.

Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer; but when the property therein is transferred to the buyer, the goods are at the buyer’s risk, whether delivery has been made or not.

Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault.

As a general rule, the buyer acquires no better title to goods than the seller had, but where goods are sold in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller.

Market overt in the country is only held on the special market-days provided for particular prescription; but in London towns by charter or every day, except Sunday, is Sale of Goods Act, 1893, secs. 16-18. 2 ibid., sec. 22. market-day. The market-place or spot of ground set apart for the sale of particular goods is also in the country the only market overt; but in the city of London every shop in which goods are exposed publicly to sale is market overt, for such things only as the owner professes to trade in. It is of the essence of the custom that the sale should be an open and public sale, so a sale in a salesroom and apart from the shop, or at a wharf, is not within it. Nor is sale by sample, the bulk sold not being exposed in the shop. Nor does the sale of horses come within the rule of market overt.

When the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller’s defect of title.

Where goods have been stolen and the offender is prosecuted to conviction, the property in the goods so stolen revests in the person who was the owner of the goods or his personal representative, notwithstanding any intermediate dealing with them, whether by sale in market overt or otherwise.

Notwithstanding any enactment to the contrary, where goods have been obtained by fraud or other wrongful means not amounting to larceny, the property in such goods shall not revest in the person who was the owner of the goods, or his personal representative, by reason only of the conviction of the offender.

Where a person having sold goods continues or is in possession of the goods, or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof to any person receiving the same in good faith, and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.¹

¹ Sale of Goods Act, secs. 23-25.

In execution of the contract it is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.

Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions; that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods.

Whether it is for the buyer to take possession of the goods, or for the seller to send them to the buyer, is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, express or implied, the place of delivery is the seller’s place of business, if he have one, and if not, his residence, provided that if the contract be for the sale of specific goods, which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.

Where, under the contract of sale, the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.

Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.

Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them; but if the buyer accepts the goods so delivered, he must pay for them at the contract rate.

Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest, or he may reject the whole. If the buyer accepts the whole of the goods so delivered, he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell, mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole.

The provisions of this section are subject to any usage of trade, special agreement, or course of dealing between the parties.¹

Unless otherwise agreed, where goods are delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them.²

Notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law (a) a lien on the goods or right to retain them for the price while he is in possession of them; (b) in case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them; (c) a right of resale as limited by the Sale of Goods Act.

Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and coextensive with his rights of lien and stoppage in transitu where the property has passed to the buyer,³

¹ Sale of Goods Act, secs. 27-30.

² ibid., sec. 36.

³ Sale of Goods Act, sec. 39.

In this article we will give certain general notions on the sale and purchase of real property, which is a very technical subject in English law. Our brief summary is derived from the Encyclopedia of the Laws of England, s.v. Vendor and Purchaser.

In general, any owner of any kind of estate and interest in land has power to sell it, and any person or corporate body legally capable of owning land has power to purchase it. This rule, however, is subject to the exceptions laid down above concerning the capacity to enter into a contract and to many others. Thus, by the Mortmain Act, 1888, a corporation has no power to purchase land otherwise than under the authority of a statute or of a licence from the Crown.

Besides the general conditions which are requisite for the formation of any contract, a sale of real property must be in writing signed by the party to be charged therewith; it is to some extent uberrimae fidei, and it is subject to certain special rules which are implied by law for the regulation of the contract and the duties of the respective parties under it.

When a valid contract for the sale of land has been entered into, its general effect on the legal position of the parties may be summed up as follows: The moment there is a valid contract for sale, the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase money, a charge or lien on the estate for the security of that purchase money, and a right to retain possession of the estate until the purchase money is paid, in the absence of express contract as to the time of delivering possession. As from the date of the contract the property sold is at the risk of the purchaser, who must bear all subsequent losses, and is entitled to all subsequent gains.

Under an open contract and in the absence of special stipulations to the contrary, the duties of the parties as regards completion may be summarized as follows:

(a) Duties of the Vendor—(1) He is bound to both show and make a good title in accordance with the contract. (2) Upon being paid the purchase money and any interest upon it that may have become payable, the vendor is bound to execute, and procure the execution by all other necessary parties (if any) of, a proper deed of conveyance vesting the legal and equitable estate in the purchaser. (3) He must, in or concurrently with the conveyance, enter into proper covenants for title and sometimes into certain other covenants. (4) Upon completion he must hand over to the purchaser all title-deeds in his possession or power. (5) Upon completion possession of the property, if not already obtained, must be given by the vendor to the purchaser. (6) He must do all things necessary for completion within the time agreed upon, if time is essential, or otherwise within a reasonable time.

(6) Duties of the Purchaser —(1) Correlatively with the first duty of the vendor above mentioned, the purchaser is bound to peruse the abstract when received, inspect the title-deeds produced, and make all objections and requisitions in due course. (2) He must prepare the conveyance and tender it to the vendor for execution. (3) Upon completion he must pay the persons properly entitled to receive it the purchase money and any interest upon it which may have become payable. (4) He must pay to the vendor all proper costs and expenses incurred by the vendor, the liability for which is by law imposed upon the purchaser. (5) He must, upon completion, take possession of the property so as to relieve the vendor from all future liabilities incident to the ownership. (6) He must, like the vendor, do all things necessary for completion within the time agreed upon, or if none, within a reasonable time.

Special rules for the alienation of Church property are laid down in the Code, Canons 534, 1530-1534, 2347.

AUCTION is a sale of property, whether real or personal, by which a person binds himself to transfer the ownership of the same to the highest bidder according to the conditions of sale. There are various methods in which the sale is conducted, and descriptions of the property to be sold and the conditions of sale are usually notified to the public by printed particulars of sale or by catalogues, and by the auctioneer himself. The bidding proceeds orderly, each bid being in the nature of an offer, which may be revoked until the auctioneer signifies his acceptance, usually by a stroke of his hammer, By this a contract is concluded with the last bidder, and the property becomes his. Ordinarily, however, the contract cannot be enforced by English law unless there is some memorandum of it in writing signed by the party to be charged therewith, or by his agent in that behalf.

Such a method of sale is, of course, honest and lawful if the conditions required either by the nature of the contract, or by law, or by special arrangement, be duly observed. The nature of the contract requires that, at any rate without notice, the owner himself should not bid, nor any other person on his behalf, and that the property should be knocked down to the highest bidder even if the price obtained be less than its value. The Sale of Goods Act, 1893, expressly provides that where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person. Any sale contravening this rule may be treated as fraudulent by the buyer.¹

However, in the next subsection the same Act also provides that a sale by auction may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller, and where a right to bid is expressly reserved, but not otherwise, the seller, or any one person on his behalf, may bid at the auction.

Similarly, if all those who are present at an auction conspi re together not to bid against each other, or if means are used to hinder people from bidding, injustice is committed. An agreement, however, between two persons not to bid against each other, when there are other bidders present, is not unjust or illegal, and knockouts, as they are called, are common, by which persons agree that only one of them shall bid for any particular article, and after the sale put up privately among themselves the goods that each one has bought.

¹ Sale of Goods Act, 1893, sec. 58, subsec. (3).

A MONOPOLY in general is the exclusive right belonging to one or to a certain number to sell some commodity. A legal monopoly has its origin in the law, which sometimes reserves to the Government the right to sell some commodity or service, or grants the exclusive privilege of doing so to someone or to a certain number. Thus, in some countries the Government has a monopoly of salt or tobacco, as it has in England of the postal telegraph service. Copyright and patent right are private monopolies granted by law to an author or to the inventor of a patent. A natural monopoly arises from one or a few who band together and who are the owners of the sole source of supply of some commodity. When one or more capitalists obtain joint control over the sale of some commodity we have a capitalistic monopoly. The moral principles which govern the exclusive right to sell are applicable also to the exclusive right to buy, and we shall apply them to both in this chapter.

A legal monopoly is lawful provided that it does not militate against the common good. In England the Tudor sovereigns abused their privilege of granting monopolies, and the Parliament under James I made such grants illegal and void. Copyright, however, patent right, and certain other privileges of a monopolistic character, are’ recognized and protected by English law.

A natural monopoly, too, is of course lawful, but if the commodity or service which is thus monopolized is necessary or very useful for the common good, natural equity prescribes that the price demanded should be fair and reasonable, even if it be not regulated by positive law. If the subject-matter of the monopoly belongs to the class of non-necessaries and luxuries, as, for example, a mine of diamonds or rubies of special quality, it cannot be said that the price is fixed and determined by natural conditions, and the owner will be justified in taking any price that he can get without fraud or misrepresentation.

Even capitalistic monopolies of commodities or services which are necessary or very useful to the community are not morally wrong if the prices charged are fair and reasonable, and if there is nothing reprehensible in the method of conducting business. The public may derive considerable advantages from these monopolies. They are capable: of effecting great savings in the costs of production, advertising, distribution, and general management, and they may secure a large return on their capital and at the same time sell cheaply to consumers. They obviate, too, the wastes and the recurring depressions in trade which follow from unlimited competition.

Monopolies, however, are morally wrong when the prices demanded for necessary or useful articles of consumption are excessive, or when the methods of business are unjust, uncharitable, or generally unlawful. The prices will be excessive when much more than a fair return for the capital employed is obtained, after all the costs of production and distribution have been defrayed, and when as a natural consequence they are higher than would rule if there were no monopoly. When means are used to crush rivals in order to secure a monopoly, when bribery of public officials is practised to obtain from Government specially favourable laws or treatment, when discriminating rates are obtained from railways and other companies, when workmen are tyrannically and unjustly treated, when prices of raw material are unduly depressed and producers are robbed of a fair compensation for their toil and trouble, and in general, when fraud or force is used to accomplish the end in view, the methods of business are immoral, and monopolies which employ such methods are to be condemned.

If prices demanded by a monopoly are, in the estimation of prudent men, higher than are fair and reasonable, injustice is committed, and there is consequently an obligation to make restitution to the buyers who have been robbed. If the prices charged are not altogether unfair and unreasonable, but high, and above what in the circumstances would be considered moderate, there will be a sin committed against charity, in that private advantage has been unduly pursued to the detriment of the people, who have been compelled to pay higher prices for the enrichment of the monopolists.

From what has been said, it is clear that what are called “rings ” and “ corners” in wheat, cotton, and other such commodities, are morally wrong, in that they cause the financial ruin of many people, and produce wide distress and instability of trade. Trusts, too, and combinations in trade are full of danger for the community. They wield immense power, and the temptations to abuse it, especially as a company has no conscience, as the saying is, are too great for the common run of business men. It is well that the Government should have the right of examining and inspecting the affairs of such bodies, and of applying the necessary remedies in case of abuse.

We shall speak first about buying and selling generally, then about some buyings and sellings in species.

I. Notion. Buying and selling is a contract by which, through mutual consent, some thing is exchanged for a price. It differs from exchange, in which a thing is granted on each side.

VII. Obligations of the seller. 1. The seller, as regards defects of the thing to be sold, is bound to manifest:

a) Substantial defects, and the defect of a quality to which he perceives the buyer's consent to be bound. For otherwise the contract, because the buyer's consent to the object of the present contract is lacking, is invalid, and therefore the seller cannot accept the agreed price (n. 837; St. Alphonsus, III, 819; cf. St. Thomas, II-II, q. 77, a. 3).

b) A notable and hidden defect. The reason is that a thing is sought by the buyer which lacks a notable defect; this being posited, the seller, by furnishing the thing and not disclosing the defect, tacitly affirms that it lacks such a defect, unless that defect itself is manifest; and therefore he uses deceit and inflicts injury on the buyer. Hence authors generally add that even a notable and manifest defect must be disclosed if it is noticed that the buyer is laboring under invincible ignorance (St. Alphonsus, III, 823). Besides, there must be manifested:

c) A defect about which he is specially questioned, unless the buyer can discover the defect by his own inquiry. The reason is that otherwise buyers would lack a means of inquiring what sort of thing it is concerning which they are going to contract; and this cannot be admitted.

d) Outside the cases assigned there is no obligation of manifesting defects, not even hidden ones; both because otherwise trading would become almost impossible, and because universal custom confirms this.

Corollary I. If some defect can bring damage to the buyer and is not noticed by him, the seller must always - even in a case in which, according to what has been said, he is not held from justice - warn the buyer; as if a horse is furious, or a house ruinous.

Corollary II. The seller, even if he is not bound to manifest a defect, ought nevertheless to take account of the existing defect in establishing the price; if he has not done so, he is bound to restore part of the price received.

Corollary III. A seller who has not manifested defects that had to be manifested is bound, if the contract nevertheless was valid, to restore the excess of price and to reimburse other damages perhaps following from the silence; indeed, if the buyer's error gave cause to the contract, he is bound also to rescind the contract at the buyer's judgment (St. Alphonsus, III, 823).

Corollary IV. "If the seller," says St. Alphonsus with others, "protests that he does not wish to give an account of any defect whatever, but to sell as is commonly said: A sacco d'ossa rotte; then he is bound to nothing. Hence Tamburini deservedly approves the custom which flourishes in some places, especially in great fairs, that animals are sold in this way, even if the defects are most hidden. The reason is that, for removing lawsuits on account of the common good, this can be sufficiently rendered honorable by custom: provided it is understood that the thing is not sold beyond the just price, at least the highest," which the thing has when account is taken of that hidden defect (St. Alphonsus, III, 823). Apply the same to sales by an antiquarian.

Question 1. Whether it is licit to sell a "something for something else," as is said, provided that what is handed over is equivalent to the natural thing, for example to wine, butter, vinegar.

Response. It seems licit, because there is not present a substantial diversity as regards "the end of the buyer" (St. Alphonsus, III, 821). Except: 1° if the buyer manifestly wants the natural thing or a thing of a determinate species; 2° if merchants are held by custom to declare the imitation.

Question 2. Whether it is licit to sell merchandise mixed with cheaper merchandise, provided the just price is retained.

Response. Per se it is illicit. By accident it is licit: 1° if the seller's merchandise is better than usual; 2° if custom so bears. Except if the buyer offers a price greater than usual for this end, that he may certainly receive merchandise not adulterated.

2. The seller is bound to deliver the thing sold to the buyer, who, according to the diversity of civil law, by delivery acquires either a right in the thing and possession, or possession alone. In what way the thing must be delivered is established by civil law; what things must be observed by him or by the buyer as regards the place of delivery, expenses, etc., should be gathered from civil law and from the special stipulations of the contracting parties.

3. The seller is bound to furnish eviction, that is, he is bound to render the buyer unharmed if the thing bought is reclaimed totally or partially by a third party who proves himself to be owner. Hence he is bound to return the price perhaps received.

But what if a seller who proceeded in good faith no longer possesses the price either in itself or in an equivalent?

Response. Most judge that the seller is nevertheless obliged, namely by reason of the contract, whose nature carries this obligation with it. But with St. Alphonsus (III, 800) it seems that it must altogether be denied, because the seller is bound to nothing by reason of the contract, since it is invalid and destitute of all value (n. 894).

VIII. Obligations of the buyer. The buyer is bound to pay the just price, and this at the time and in the mode concerning which agreement was made. Besides, compare civil law. But if he himself perhaps received false money from a third party, he cannot for that reason give it to another contracting party as price. If he has given it, even though he acted in good faith, he is bound to restitution; since the fact that he himself suffers damage is not a reason why you can deny to another what is owed (St. Alphonsus, III, 855).

It remains that we say certain things about earnest money. Now then:

I. Earnest money is called a certain thing handed over to the other party on the occasion of a contract.

II. Earnest money is distinguished as twofold, confirmatory and penitential.

Confirmatory earnest money is that which is given by the buyer to the seller as a sign and confirmation of the contract, perfected according to the intention of the contracting parties. From a contract of this kind, since it is perfected and confirmed, one can retreat without mutual consent even less than from another contract. But the earnest money given is judged to be part of the price.

Penitential earnest money is that which is given by one party to the other for this end, that the contract, not yet plainly perfected, may be rendered more certain. In the case each party can withdraw from the contract, yet in such a way that he who gave the earnest money, if he withdraws, loses the earnest money given; but he who received the earnest money, if he withdraws, restores the earnest money received.

In doubt whether the earnest money is confirmatory or penitential, it is presumed to have been given according to the custom of the place (St. Alphonsus, III, 794).

Besides, also as regards earnest money let civil law be consulted.

I. Sale with an added pact. Sale with a pact concerning the right of the seller to redeem the thing if he himself should demand it,¹ a sale of this kind, I say, is licit, provided that in establishing the price account is taken of the burden which is imposed on the buyer or seller (St. Alphonsus, III, 812, 813). Let the law of one's country also be consulted.

¹ Akin to this pact was the contract whose Spanish name was mohatra, by which someone sold on credit with an explicit or implicit pact that the thing would immediately be sold back to him at a lesser price, but for present money. It was therefore a disguised contract of loan and was for cloaking usury, and therefore was condemned by Innocent XI.² But since civil laws commonly permit interest to be received from money given as a loan, that contract has become obsolete (Sweens, n. 719; cf. St. Alphonsus, III, 813).

² Proposition 40, Denzinger-Bannwart, n. 1190.

II. Sale under the spear. 1. Notion. Sale under the spear, or auction, is a sale in which the things to be sold are proclaimed by a crier and are commonly adjudged to the last or first bidder: to the last, if successively greater prices are offered by the bidders; to the first, if the highest price proposed by the crier is diminished until one bidder assents. It is called sale under the spear because among the Romans in sales a spear, that is, a sign of ownership, was fixed in the ground. It is also called public auction, because a later bidder, by offering more, increases the price offered by a former bidder.

2. Division. It is distinguished as twofold, judicial and voluntary, according as it is made by precept of the judge or freely. In the former, the thing must be adjudged to the last or first bidder; in the latter, the seller can withdraw the thing. Public auction somewhat puts on the nature of an aleatory contract, insofar as the seller has hope of selling his things at a greater price because of the concurrence and rivalry, but runs the risk of selling them at a lesser price; likewise the buyer has hope of buying at a lesser price, but because of the concurrence he also runs the risk of buying at a greater price. These things, however, have more force for a judicial auction than for a voluntary one, because in the latter the seller can still retain his thing if a lesser price is offered.

3. The just price is that which is determined by bidding, even if it is above the highest or below the lowest; and this has force both for a judicial auction and for a voluntary one, provided nevertheless that the matter was done without fraud which restricts freedom of acting. It has force for a judicial auction; for since in the case authority absolutely wills the sale, it itself "implicitly approves as just that price which is publicly approved by the concurrence of buyers" (St. Alphonsus, III, 808). It has force for a voluntary auction; for all, being free to do the same thing if the occasion is given, freely judge as just the price approved by the concurrence of buyers. They judge thus both because the somewhat aleatory character of sale under the spear counsels this, and so that the sale of things, in a case greatly desired, may be better provided for. It was said: provided that the matter was done without fraud. Further, they act unjustly:

a) Sellers, if they positively deceive buyers as regards the thing to be sold. Mere concealment of defects now is not unjust, since they are accustomed to sell things as they are.

b) Buyers, if by an unjust means, for example deceit or fear, they prevent others from bidding; otherwise it must be said if they employ only prayers (St. Alphonsus, III, 808, dub. 1).

c) Officials, if they begin the auction before the time, that is, while buyers are still lacking, so that the thing is sold for less; likewise, if they adjudge the thing to a bidder too quickly.¹

Corollary I. The seller licitly: 1° bids himself, for example through a friend; 2° suborns fictitious bidders; 3° retains the thing if a lesser price is offered. These things indeed were formerly illicit, with attention paid to the commonly admitted aleatory character of an auction; but today, the character of an auction having been tempered by common and known practices, true fraud seems absent, and therefore the aforesaid devices seem licit. There is added that even those whom the seller harms use various devices; hence the devices employed by the seller do not harm the equality to be preserved in the contract.

Corollary II. Buyers licitly agree by pact, either to buy a thing in a common name; or, when a determined price has been offered by one of them, to abstain from bidding; or, that one shall in no way bid against another. Buyers, I say, act licitly in this way if there is question of a voluntary auction, because the seller can withdraw his thing when a lesser price is offered. If there is question of a judicial auction, it seems illicit, because a judicial auction has retained more the nature of an aleatory contract, in which the seller is obliged to yield his thing at whatever price. But the equality to be preserved in contracts of this kind requires that the said obligation be compensated by hope of obtaining a greater price, and this hope is diminished too much if the buyer turns many away from bidding (St. Alphonsus, III, 808, dub. 2). Except, however, if only one or another is turned away from bidding.

Corollary III. A buyer licitly gives or promises money to another so that the latter abstain from bidding; and this holds not only in a voluntary auction, since the seller can withdraw his thing, but also, as is drawn from what was said in Corollary II, in a judicial auction, if he gives or promises money to only one or another. But it is disputed whether one licitly accepts money who does not have the intention of bidding, or even has a positive intention of not bidding. It seems that it must be affirmed, because by accepting the money he takes on the obligation of not bidding; and this is estimable by price.

¹ Cf. Sweens, n. 707.

III. Buying and selling through a broker. 1. Notion. A broker is called one who buys or sells in the name of another, and therefore obliges that other person - not himself - toward the one with whom he deals. Some are public brokers, others are simple mandataries, according as they have been constituted by the municipality or have not been constituted by it. Brokers are distinguished from the so-called commission agents, who indeed act for another, but in their own name, and therefore oblige themselves - not another - toward the one with whom they deal.

2. Obligations of the broker. a) A broker, whether constituted publicly or privately: 1° by reason of the office undertaken, whether gratuitously or for payment, ought from strict justice to carry out the affairs of his patron diligently on account of at least a tacit contract; nevertheless one who receives a stipend for his office is held to greater diligence; 2° he is held from contract, and therefore from strict justice, to observe the obligations defined by a special mandate of the broker.

b) A public broker in addition, from the office tacitly undertaken according to the law in force concerning his function, and therefore from a tacit contract from strict justice, is held to the obligations which civil law decrees are to be observed by him.

c) A broker in the forum of conscience: 1° before any sentence whatever of a judge is held for damage which he has inflicted on the mandator either in bad faith or by grave culpable negligence; 2° for damage inflicted with merely juridical fault, he is not held except after the sentence of a judge.

Corollary I. A broker who in the name of the mandator buys below or sells above the price determined by the mandator cannot per se retain the profit thus made; for the mandator has a right to the profit which the contract entered into in his name carries with it, unless he must be judged to have yielded it to the mandatary. But determination of the price does not contain a cession of profit, since by determining the price the owner intends only this, that the thing not be bought more dearly or not be sold for less. Nevertheless he can retain the profit: 1° if the mandator is judged tacitly to consent, which is presumed by law to have place in the case in which the mandator assigns no wage of labor to the broker; 2° if the broker sold the thing more dearly because he himself improved it by undue industry. If he did not improve the thing, but sold it more dearly by employing undue diligence, likewise if by undue diligence he bought some thing for less, he can retain for himself a wage for the undue diligence (St. Alphonsus, III, 825).

Corollary II. A broker can buy for himself a thing of the mandator which is to be sold at a determined price, and afterward sell it for more, provided both that, after employing moral diligence, he has found no one who offers more, and that he truly buys the thing and therefore has it at his own risk. I said who offers more, because the owner, by determining the price, intends that his thing not be sold for less, but, if it can be done, for more (St. Alphonsus, loc. cit.); the broker is held by this disposition of the owner concerning his own thing. I said also and truly buys the thing and has it at his own risk, so that, if he does not sell the thing for so much, he nevertheless returns the determined price to the owner (St. Alphonsus, III, 825).

Since the matter is not without risk, several civil laws are opposed to a way of acting of this kind.

Corollary III. A broker can sufficiently probably buy for himself at a lower price a thing which the mandator committed to him to buy at a determined price, and afterward sell it to the mandator at a higher price, provided that afterward, after employing ordinary diligence, he has found no occasion of buying the thing except at that higher price (St. Alphonsus, loc. cit.).

Objection 1. The moral diligence to be employed demands that the broker not pass over an occasion of buying that thing for the owner at a cheap price.

Response. It is not clear that the diligence to be employed demands more than that the broker buy at the price assigned by the mandator.

Instance. If the opinion defended is admitted, a broker who in the name of the mandator buys below the price assigned by the mandator can - contrary to what was said in the first corollary - retain the profit for himself, because the mandator also in that case has only the right that the thing, if it can be done, be bought at the assigned price.

Response. I deny the parity of the cases; in the first corollary the mandatary buys something for the mandator, who has a right to the profit which the contract entered into in his name carries with it; in our case the mandatary buys something for himself.

Corollary IV. One who buys a thing for another, that is, not at his own risk but at another's risk - as a maid-servant who goes to a shop in the name of her mistress, a tailor who buys cloth not for himself but for a client, from which he is to make clothing - can retain the part of the price which the seller gives to him; or, as the same thing is expressed less precisely, he can retain what the seller remits from the price in favor of the broker or of any mandatary. Nevertheless, let deceit be guarded against, since "sometimes merchants in reality rather simulate giving to them than give, so that if the owner himself went, he would obtain the thing for the same price" (St. Alphonsus, III, 826).

Corollary V. Servants, who are going to pay for a thing previously bought for the owner, can retain the part of the price which the merchant refunds to them, or the little gifts which he bestows on them. For an intention of favoring the servant is presumed.

V. Buying and selling of shares. Buying and selling of shares contains the buying and selling of a right to part of the profits of some company; but it is just if it is done at the current price; for otherwise trading would become morally impossible, so that all are presumed to consent. But one who has induced the price by fraud is held to restitution. Besides, trading in shares is especially to be dissuaded for the inexperienced.

Besides those things which we are going to say about every alienation of ecclesiastical goods - for these things also must be applied to sale, since it is one of the modes of alienating - it suffices, as regards sale, to add these things:

I. Immovable ecclesiastical goods are not to be sold or let to their own administrators or to those joined to them in the first or second degree of consanguinity or affinity without the special permission of the local Ordinary (can. 1540).

II. In the sale or exchange of sacred things, no account of consecration or blessing is to be had in the estimation of the price (can. 1539, § 1).

III. Administrators can exchange titles to bearer, as they are called, for other titles more or at least equally safe and fruitful, with any species of commerce or trading excluded, and with the consent of the Ordinary, of the diocesan administrative Council, and of others whose interest is involved (can. 1539, § 2).

Forms of Contract.—The chief forms of contract are the following:

(a) gratuitous contracts, which are those that confer advantage on only one of the contractants, or those in which no payment or compensation for his acts or goods is made to one party by the other party. They include unilateral contracts, which produce obligation on one side only (e.g., a promise, gift, testament), and bilateral contracts, which produce obligation on both sides. The bilateral contracts are also known as bailments, or understandings whereby a thing or business is transferred from one person to another in trust, on condition that a return will be made to the owner, They include the following contracts: loans, in which return must be made of the identical things borrowed (commodatum), or of a thing similar in kind (mutuum); deposit, in which a thing must be returned after safekeeping (depositum); an agency, in which one conducts the business of another with the obligation of making returns, either from express contract (mandatum) or from imputed agreement (negotiorum gestio). In commodatum and mutuum the advantage is had by the bailee, in the other three by the bailor;

(b) onerous contracts of certain event, which are those that confer an advantage on both parties, and in which the thing agreed on is certain and definite. They include contracts in which one party transfers ownership to the other (e.g., buying and selling, barter, loan at interest, contracts for annuities, stocks and bonds) or useful dominion (e.g., lease of property, contractor’s agreement, hire of labor), and contracts in which both parties transfer rights to a moral person of which they are the members (partnership);

(c) onerous contracts of uncertain event, which are those that confer advantage on both parties, but in which the thing agreed on is contingent and uncertain. Examples are insurance, wager, gaming contracts, lottery, and stock market speculation;

(d) subsidiary contracts, which are those that are made in order to give security to principal contracts to which they are annexed or for whose sake they are made. Such are guaranty and surety, pledge and pawn, and mortgage.

What is the nature of sale and purchase? - Purchase is an agreement of price for merchandise; but sale is an agreement of merchandise for price. Purchase and sale, therefore, are two correlatives, and in reality a single contract, constituted by the consent of each contracting party, namely of giving merchandise for a determined price and the price for determined merchandise. Agreement, and accordingly the obligation of giving merchandise for price, and the obligation of giving price for merchandise. Under the name of merchandise are understood all things, both immovable and movable, which are commonly sold among men. But under the name of price is understood how much a thing is worth in coin or money; for when for one saleable thing another saleable thing is given, it is not purchase and sale, but rather exchange. Money therefore is as it were the instrument, measure, and price, instituted by public authority, of all things which come into exchange. But when money is given for money, exchange is had. Of price for merchandise; therefore what is given to a creditor in payment of a debt is not purchase and sale, but giving in payment. But as sale is not understood without merchandise, so purchase is not without price. The merchandise must be certain, and the price likewise must be certain; if the merchandise is uncertain, e.g., I sell you one horse out of a hundred; if the price is uncertain, e.g., I buy for as much as it will be appraised, sale and purchase are not yet understood. - Inst. 1. 9. t. 24. § 1; L. Pacta conventa Dig. de Contrahenda emptione, etc.; C. I. 1447, 1454; C. G. 1582, 1591, 1592; C. B. 433; C. H. 1445, 1446; C. L. 1544; L. 793; St. Thomas 2. 2. q. 77. a. 1. Cf. in this whole contract Troplong della Vendita.

To whom do ownership of the thing, danger, and advantage pertain according to Roman Law? This contract is perfected before delivery of the thing or of the price. Inst. 1. 9. t. 24 init.; L. Sicut Dig. de Rer. permutat. § 2. Nevertheless for it there is required determination of the price; if this is remitted to the buyer himself, the contract is null. L. Quod saepe ff. de contrahenda emptione. Otherwise, if it is remitted to a third party. L. ult. C. e.t. And just as the price, so also the thing must be determined, at least in hope. L. 794. Although this contract is perfected by consent alone, so that no writing is per se required, nevertheless it can be agreed that it not be valid unless a writing has been made. Inst. 1. 3. tt. 23, 24; L. 795.

To the seller and buyer is brought forth a right to the thing, but not a right in the thing, unless delivery has been made, by which ownership is transferred. Inst. l.c. § 3. Indeed although the thing has already been handed over to the buyer, it still remains under the ownership of the seller until either the price has been paid, or satisfaction has been made to the seller in another way, e.g., by pledge, or the seller has trusted the buyer concerning the price. Inst. 1. 2. tit. 1. § 41; L. 795, 796.

It is special in this contract that, although the contract is perfected, before delivery of the thing the seller is still owner of the thing, and nevertheless the danger of the thing, like its advantage and fruits, pertains to the buyer, unless, as regards danger, it perishes by fault of the seller, and unless the sold thing is determined only as to genus, such as so many modii of wheat, or even if it is determined in species, is nevertheless a thing which is still to be measured, or counted, or tasted beforehand; since then the sale is not yet judged perfected. Inst. 1. 3. t. 24. § 3; L. Quod si neque, L. Illud Dig. de Periculo et commodo rei venditae; L. Quod saepe Dig. de Contrahenda emptione; Laymann de Emptione et Vendit. n. 18; L. 797, 798, 838. The buyer transfers the price, or ownership of the money, to the seller; but the seller transfers empty possession of the thing to the buyer.

If the seller was truly owner of the thing, ownership of the thing is transferred to the buyer. If on the contrary the seller was not owner of the thing, then he is bound to furnish eviction to the buyer. L. Ex empto § 2 Dig. de Actionibus empti et venditi; L. Servus § 1 ib. Namely, if the owner of the thing evinces that the thing is his, then the seller of this thing is bound to return the price to the buyer, and as much as it was of interest to him that the thing had not been evicted. L. Si quaestio C. de Evictionibus; L. Evicta re Dig. de Evictionibus, etc.

For this reason, even if another's thing or a stolen thing is sold to an ignorant buyer, the contract is valid, ownership of the price is transferred to the seller, and the buyer acquires the right to eviction, by which the seller is obligated to the buyer. L. Rem alienam, L. Si in emptione Dig. de Contrahenda emptione; L. Ex empto Dig. de Action. empti et venditi; L. 48 Qui vas Dig. de Furt. § ult. Certainly according to Roman Law purchase and sale are perfected by the obligation of paying the price on the part of the buyer and the obligation on the part of the seller of effecting that the buyer acquire ownership of the thing, which can well be done even if the thing is not the seller's, for he will be able to acquire it. But a thing bought with another's money belongs to the buyer if he buys in his own name. L. Si eo C. de Rei vindicatione. Exception: if the money belongs to the church, a minor, or a soldier; because then the thing is acquired for them. L. 799, 800; Lugo Resp. Mor. 1. 6. d. 14.

To whom do ownership of the thing, danger, and advantage pertain according to more recent Law? According to C. I. 1125, 1448, 1450-1452; C. G. 1138, 1583, 1585-1587; C. L. 1549, 1550, 1551, 1575, once an agreement has been made concerning the thing and the price, the contract is perfected, even if the thing has not yet been handed over, nor the price paid, and ownership of the thing, before delivery, is with the buyer. Therefore if the whole thing is bought in gross or by the body, commonly in bulk, for one price, ownership, danger, and advantage of the thing are immediately with the buyer. - But if it concerns things which are sold by weight, number, or measure, or which are usually tasted beforehand, the contract is not judged perfected before the thing has been defined according to weight, number, or measure, or tasted beforehand. The reason is that the thing must be determined. Hence according to the same C. I. 1470; C. G. 1614, from the day of sale all fruits of the thing pertain to the buyer; and C. I. 1480, 1125; C. G. 1624, 1138 say that the danger of a thing not yet delivered pertains to the buyer. "Just as the danger of the thing pertains to the buyer, so its fruits are owed to him, and civil laws opposed on this point have been reproved by Canon Law, as favorable to usurious profit, as the Salmanticenses say." L. H. A. tr. 10. n. 169. - L. 798.

According to C. I. 1454; C. G. 1591, 1592; C. H. 1447, 1449, the price must be determined by the contracting parties. It can be committed to the judgment of a third party. But if he cannot or will not define the price, the contract is null.

The sale of another's thing is null. C. I. 1459; C. G. 1599. This nullity cannot be opposed by the seller. C. I. ib. But the commercial sale of another's thing is valid. It obliges the seller to acquire it and to hand it over to the buyer under penalty of reparation of damage. C. I. Comm. 59. According to C. I. 1314, under penalty of nullity, agreements which transfer ownership of immovables, or of other goods, or of rights capable of mortgage, must be made by public instrument or private writing. Almost the same according to C. L. 1589 ff. According to C. G. 1341, 1583, any sale is perfected by consent alone of the parties without any legal formality. When the sale exceeds the sum of 150 francs, in order that it can be proved in the external forum, an authentic or private writing is required. According to C. H. 1445, 1450, 1452, 1453, 1468, sale is perfected by the agreement itself, before delivery of the thing, without any legal formality. But only a right to the thing is acquired. Loss of the thing is imputed to the seller if he is constituted in delay in handing it over, and if the sale of a fungible thing is made in a body, commonly in bulk, which happens when merchandise is sold for one and a certain price, without account being taken of weight, number, and measure; or if account is indeed taken of weight, number, and measure, but only for the effect of determining the price. But if fungible things are sold for a fixed price in relation to weight, number, and measure, loss is not imputed to the buyer if the thing has not first been weighed, counted, and measured, and unless he is constituted in delay. If things are sold which before they are bought are usually sampled, such as wine, oil, etc., or if they have been bought under this condition, the sale is presumed to have been made under a suspensive condition. The fruits of the sold thing pertain to the buyer from the day of the perfected contract.

According to C. A. 1053, 1054, 1056, 1063, 1064, 1066, 1080, 1081, 1083, 1084, by sale and purchase only a right to the thing is acquired; wherefore the seller preserves ownership of the thing before its delivery. The price must consist in counted money, and cannot be indeterminate or contrary to the laws. Nevertheless it can be remitted to the decision of a third person. Once the thing has been handed over, even with the price not yet paid, ownership of it passes to the buyer. The danger and advantage of the thing pertain to its possessor, as also in exchange, with which sale has common laws where special ones are wanting. In the purchase and sale of a thing for testing, the bought thing does not pass into ownership of the buyer unless the price has been paid; and during the testing of the thing, the buyer is as a borrower, and before the time of testing has elapsed he can withdraw from the purchase. In the purchase and sale of a thing under reservation, unless another buyer within a determined time offers a greater price, if the thing has not been handed over, the efficacy of the contract is delayed until verification of the condition. But if it has been handed over, the contract is perfected, but once the condition has been verified, it is resolved. According to C. B. 433, 446, by sale and purchase only a right to the thing is had; wherefore delivery of the sold thing transfers to the buyer the danger, deterioration, fruits, and burdens of the thing. As regards immovable things, these effects are produced from the inscription of the owner in the land register. Cf. arts. 494, 496.

What force do arrhae add to sale? What force does a promise of sale have? According to Roman Law: If arrhae are added only to a promise of sale, they do not confirm the contract, but each of the contracting parties can withdraw. But in this case, if he who handed over the arrhae to the other withdraws, he simply loses them; if he who received them withdraws, he must restore double, that is, the arrhae received, and in addition a value equal to them. - If they are added to the sale itself, they do not make it conditional, but are an argument of the contracted sale; for they are computed as part of the price, or are given as security of payment; whence neither of the contracting parties, against the will of the other, can withdraw.

In doubt whether they were added to the promise of the contract or to the contract itself, one must stand for the minimum, or they are judged to have been added only to the promise of sale. Inst. 1. 3. t. 24; L. 25 Dig. de Contrahenda emptione; L. Contractus C. de Fide instrumentorum.

According to C. G. 1589, 1590, a promise of selling is equivalent to sale whenever there is reciprocal consent of each party in the thing and the price. But if arrhae are joined to the promise, either contracting party can withdraw from the contract, so that they are lost by him who gave them; but he who received them returns them doubled. Hence it is clear that a promise of sale is not altogether to be confused, even according to C. G., with sale itself; since according to the same Code, by sale ownership of the thing is transferred, but by no means by promise of sale. Wherefore a promise of sale is equivalent to sale, not insofar as it transfers ownership, but insofar as the seller can be compelled, after receiving the price, or conversely the buyer, after receiving the thing, to fulfill it. Gousset 833. According to C. H. 1451, 1454, a promise of sale and purchase gives to the contracting parties the right of claiming fulfillment of the contract. If in the contract of sale and purchase arrhae have been given and accepted, the contract can be rescinded if the buyer is content to lose them, or the seller to restore them doubled. Cf. C. L. 1548. As regards C. I., cf. 993.

Certainly, speaking per se, it is one thing to promise a thing, another to give it. C. B. 336 ff.; Lugo d. 26. n. 10; L. 794.

Whether the purchase of a thing previously sold to another is valid? According to Roman Law:

A thing sold to one person, and not yet handed over to him, is in the ownership of the seller, who therefore can validly sell and hand it over to another. For when delivery has followed, it becomes the second buyer's. The same must be said if, although the thing has been handed over to the buyer, nevertheless the price has not yet been paid by him, or is not yet regarded as paid. For then ownership of the thing has not yet been acquired for the buyer. But although the second purchase is valid, delivery having followed, nevertheless it is not licit. Hence if a thing has been sold to two persons and not yet handed over, it must be handed over to the first buyer. But if it has already been handed over to the second buyer, who has already paid the price, he acquires ownership of the thing, but the first buyer has a right and personal action against the seller as regards interest and damages. L. Qui tibi C. de Heredit. vel actione vendita; L. Si ancillam C. de Action. empti et vend. But if the thing has already been handed over to the second buyer, but the price has not yet been paid, or regarded as paid, the thing must be handed over to the first buyer, since it is still in the ownership of the seller. Although the thing has been handed over to the later buyer, and he has paid the price, if the second buyer was conscious of the prior sale, he can be condemned, at least by natural law, to hand over the thing to the first buyer. But, since the contract is valid, he is not bound to restore it before the sentence of the judge, but is bound only to reparation of the damage; if nevertheless the thing has been mortgaged to the first buyer in security of the contract, since he already has some right in the thing, the thing must be restored to him. L. Si creditor § ult. Dig. de Distract. pignorum. Likewise, if the later buyer has received the thing by lucrative title, e.g., by donation, the first buyer will be able to evince the thing from him. L. Ignoti C. de Revocandis his, quae in fraudem creditorum alienata sunt. And this has place even if the second was ignorant of the fraud. If the first buyer is the Church, or a pious place, or a City, although the thing has then been handed over to another and the price has been paid by him, the thing must be restored to the first buyer; because the Church, or pious place, or City, even without delivery, has already acquired ownership. L. 827; Lugo d. 20, n. 112, 116; Molina d. 369. n. 9; Lessius 1. 2. c. 21. n. 142.

According to C. G. 1138, 1583, 1599, after perfected consent of each party, the sold thing passes into the ownership of the buyer before delivery itself. But the sale of another's thing is null. No one can transfer to another more right than he himself would have. L. 54 Dig. de Reg. Iur. Nevertheless, it gives place to reparation of damage; and if afterward the thing has become the seller's, he is then obligated to fulfill the sale. Hence it follows that the right is always with the first buyer to evince the thing from the second. Nevertheless according to the same C. G. 1141, if the thing which someone has obligated himself to give or hand over to two successive persons is movable, that person who possesses is preferred and obtains ownership, even if his title is later in time, provided nevertheless that he possesses in good faith. The same is held according to C. I. 1448, 1459, 1126, whether it is a movable thing or a title to bearer. Cf. here 1128. According to C. H. 1473, whether the thing is movable or immovable, the first possessor in good faith is preferred. By natural law the first buyer always retains the right to reparation of damage, if he truly suffered it from the second sale. Cf. C. L. 1578 ff.

What are the obligations of the seller and buyer? 1. The seller is bound to hand over at once the thing and its accessories, free from another's possession and from other unusual burdens, not defective, and entire, unless something else has been agreed; and he is bound to furnish eviction for the thing handed over. C. I. 1462, 1471; C. G. 1603, 1625, 1615; C. L. 1568, 1583. The buyer also, unless something else has been established by pact, must hand over the price at once. Likewise, unless something else has been established by agreement, both the thing and the price must be handed over in the place where the contract is made, and in that mode concerning which agreement was made in the contract. The expenses of delivery are owed by the seller. C. I. 1467, 1468, 1482, 1507, 1508; C. G. 1608, 1609, 1626, 1650, 1651; C. H. 1461, 1465, 1474, 1500; C. L. 1546, 1570, 1572. - The contract of sale and purchase is in equality. For purchase and sale was introduced for the common utility of each contracting party, while one needs the thing of the other and conversely; and accordingly it ought not to be more burdensome to one than to the other. If equality between price and merchandise is not preserved, injustice is committed, and in the forum of conscience there is an obligation of restitution, or reparation of damage, grave or light according to the measure of the damage itself. St. Thomas 2. 2. q. 77. a. 1; C. H. 1466-1468; C. Si venditori 7 de Empt. et vendit.; Rogron on a. 1604. When the price has not yet been paid, the seller is not bound to hand over the thing. C. I. 1469; C. G. 1612; C. L. 1574. If the buyer fears trouble in possession of the thing, he can meanwhile suspend payment of the price. C. I. 1510.

2. Moreover the buyer is bound to pay interest for the unpaid price from the day on which he possesses the thing, if the thing is fruitful, although accidentally it has given no fruits from the time of the sale, unless the seller has given delay for paying; because it is not equitable that the buyer have both the thing and the price at the same time. But if the thing is not fruitful, he is not bound to pay interest unless he was in culpable delay, nor unless it was otherwise agreed. C. I. 1509; C. G. 1652; C. H. 1051; C. L. 1573. 3. In addition, the buyer is bound to pay expenses made for carrying away the sold thing, for writings or authentic acts, likewise for expenses necessary for preservation of the thing from the day of sale, unless it has been agreed in another way. C. I. 1455, 1467; C. G. 1593; C. L. 1552. Cf. C. H. 1455, 1465; C. B. 433 ff., 459 ff.

When is sale resolved by reason of the price? - Concerning Roman Law: In the external forum, so that lawsuits not be multiplied too much, an action against the author of damage is not conceded unless one buying more dearly or selling more cheaply has been deceived beyond half of the price. L. 2 de Rescindenda venditione. And this is also valid by Canon Law. L. 805. From the more recent Laws: If a commissory agreement has been expressly made, so that, when the price has not been paid at its time, or the thing not handed over or accepted, or any other attached condition not fulfilled, the thing would become unbought, the sale is resolved by the law itself, or rather the thing is vindicated for its owner. Resolution of sale is the rescission of a valid sale. Vindication, however, is an action into one's own thing, by taking it to oneself. But if such an express pact has not been made, but only a tacit one has been present, it is resolved only by the office of the judge. C. I. 1511, 1165; C. G. 1654; C. H. 1124, 1503. Cf. C. L. 1585. - Commissory: the lex commissoria is an exception added to a contract; if either of the contracting parties acts against it, he incurs the fine concerning which agreement was made. Cf. the whole title de Lege commissoria in the Digest. Nevertheless, the sale of movable things is resolved by the law itself if the buyer does not come on the defined day of delivery; or if the buyer delays in paying; for then it is in the power of the seller, if the thing has not yet been handed over, immediately to withdraw from the purchase, unless delay has been conceded. C. I. 1512; C. H. 1505; C. G. 1657.

But if the thing has already been handed over, the seller will be able to claim or vindicate the thing, unless again delay for paying has been conceded to the buyer. C. I. 1512, 1513; C. G. 1657. But he will be able to vindicate within fifteen days to be computed from delivery, provided the thing is with the buyer, and has neither been changed, nor obligated to an ignorant lessor. C. I. 1512, 1523. Cf. C. A. 1062. - And in the sale of immovables, by full right, the contract is not resolved unless first, after the time for payment of the price has elapsed, an intimation of payment has been made by the seller to the buyer, who is then constituted in delay. C. G. 1656; C. H. 1504. The seller injured beyond half of the just price, according to C. I. and C. A., beyond seven twelfths parts according to C. G., in the sale of an immovable thing, has the right of demanding rescission of the contract, even if he expressly renounced this right in the contract and declared that he donated the excess. C. I. 1529; C. G. 1674. It is otherwise, however, according to C. A. 935. Rescission of sale by reason of lesion belongs to the seller alone, and only in the sale of an immovable thing, in the external forum; but it is in the power of the buyer either to withdraw from the sale or to supply how much more the thing is worth. This rescission ends in two years. C. I. 1529, 1531, 1534, 1536; C. G. 1674, 1676, 1681, 1683. Cf. C. A. 934, 935, 1060. In the forum of conscience, the action of rescission by reason of lesion belongs per se both to the seller and to the buyer, whether it concerns an immovable thing or a movable, whether the thing was bought beyond the highest price or below the lowest. According to C. A. 1060, the action by reason of lesion likewise belongs to each, namely both to seller and buyer. - Once sale has been resolved, together with the thing, its fruits are consequently also to be restored. - C. B. 454, 455; L. 805, 819; L. 2 de Rescind. vendit. C.; C. 3, 6 de Empt. et vendit.; St. Thomas 2. 2. q. 77. a. 1 ad 1; Gousset 839; Troplong on a. 1654. The action of rescission of the sale of immovables because of lesion is prescribed after two years have been completed from the day of sale. And this term runs even against wives, absentees, interdicted persons, minors, representing persons constituted in greater age who sold. And this term also runs likewise and is not suspended as long as the time agreed by the pact of withdrawal runs. C. G. 1676; C. I. 1531. When rescission has been admitted, if the buyer prefers to retain the thing, besides the supplement of the price he must also pay interest of this supplement from the day of the petition of rescission. If he restores the thing and receives the price, he also returns the fruits from the day of petition. But interest on the price is owed to him from the day of petition or from the day of payment, if he did not gather fruits. C. G. 1681, 1682; C. I. 1534, 1535.

When is purchase resolved by reason of the thing? - If a defective thing has been handed over, the buyer can proceed, within the time established by the laws, by redhibitory or estimatory action. To redhibit is to cause the seller to have again what he had had. To estimate is to cause the excess of the price to be restored according to the estimation of the thing, by how much less it ought to have been sold. C. I. 1478, 1501, 1505; C. G. 1644, 1648; C. H. 1486, 1491, 1492; C. L. 1582; C. A. 933; C. B. 462 ff.; L. 819; Rogron on a. 1625. If the thing has not been handed over whole, because a part of it perished, the buyer can either withdraw from the contract or diminish the price proportionately. C. I. 1461; C. G. 1601; C. H. 1460; C. L. 1576, 1577.

But if after delivery the buyer has suffered eviction of a part, it is lawful for him to withdraw from the purchase if that part is of such kind or so great that, had he known, he would not have bought it. C. I. 1492; C. G. 1636; C. H. 1479; C. B. 468 ff. If the purchase is not rescinded, the value of the evicted part is compensated to the buyer according to its estimation at the time of eviction. C. I. 1423; C. G. 1637. Cf. Troplong on this article. If an error has intervened in the measure of an immovable thing, the quantity having been brought into the contract, it is indeed not lawful for the seller to withdraw from the sale; but it is lawful for the buyer if an excess greater than a twentieth part is found, but not if lesser.

If one does not withdraw from the sale, and there is excess or defect as to quantity, the price will have to be increased or diminished according to the measure of the quantity. But an action of this kind ends in a year. C. I. 1473-1479; C. G. 1617-1623; cf. C. H. 1469-1472. According to C. A. 1059, 1060, when it concerns merchandise for which a rate has been established, the buyer can juridically seek compensation for any very small lesion. Outside this case, purchase and sale can be impugned both by the buyer and by the seller only under the title of lesion beyond half.

Whether the seller is bound to manifest defects of the thing? Defects are substantial, or only accidental; hidden, or manifest; moreover either the seller is questioned about them, or not. Hence: In every case the seller is bound to manifest all substantial defects of the thing, both in itself and relatively to the known end of the buyer, or all those things which make the thing another thing, or render it harmful or notably useless; otherwise he is liable for the price and for the damage. Thus according to every Law. A seller who is questioned is bound to manifest all hidden defects, even if they do not render the thing harmful or useless; otherwise he would commit fraud. Consequently, if fraud was the true cause of the purchase, the contract is rescindable. But if the fraud was only incidental, so that the buyer, knowing the defect, would still have bought, but not at so much, the seller must restore only as much as the buyer would have bought it for less; because otherwise almost no sale could be made. But if the seller is not questioned, and the hidden defect does not render the thing useless, he must diminish the price by reason of the defect. The reason is that otherwise the thing would be sold for more than it is worth. The seller is not bound per se to show accidental defects of the thing which are of themselves manifest, provided he diminishes the price in proportion to the defect. The reason is that then no injury is done to the buyer, neither by reason of the price, which is diminished, nor by reason of the defect, which, if the buyer has not seen it, he must impute to himself. Exception, however, unless the buyer is very rude, because with respect to him the defect is judged hidden. Exception also if the seller is specially questioned about such a defect. If the seller protests that he does not wish to give an account of any defect, even the most hidden, he is bound to nothing, provided the thing is not sold beyond the just price, at least the highest, with account taken of that hidden defect. L. 818, 819, 823, 824; St. Thomas 2. 2. q. 77. aa. 2, 3; Quodl. 2. a. 10; C. I. 1481, 1494, 1498 ff.; C. H. 1484 ff.; C. G. 1623, 1638, 1641 ff.; C. B. 439, 442, 459-461, 463, 464, 475, etc.; C. A. 869, 871, 872.

Whether the seller is liable for all damages following from a defect of the sold thing? - He is liable only for foreseen damages; because he could not undertake an obligation as to those things which he did not foresee even in confused fashion.

To what is the seller bound if the thing perishes before or after delivery? He is bound to nothing if the thing perishes before delivery from a fortuitous event. The reason is, according to C. I. 1480, 1226, 1298, 1299, 1504; C. G. 1624, 1138, 1183, 1302, 1647; C. L. 1549, that a thing perishes for its owner, that is, the buyer. So also, unless it has been agreed otherwise, this must be held according to C. H. 1182, 1445, and according to Roman Law, although the seller preserves ownership of the thing until it has been handed over. L. 828. - If the thing perishes before delivery from fault of the seller, he is liable for the price and expenses of the contract, and also for what was of interest to the buyer, because he ought to have guarded the thing as his own, and he is liable for the damage inflicted.

C. I. 1140, 1219, 1224, 1504; C. G. 1137, 1138, 1182, 1302, 1647. - If the thing perishes after delivery from an intrinsic defect which existed at the time of delivery, he is likewise bound to restore to the buyer the accepted price, and to pay the expenses of the contract, if there are any, and likewise to compensate that which was of interest to the buyer. The reason is that he sold a useless thing, or a thing of no value; therefore there was in the buyer an error concerning the substance of the contract; therefore the contract is null by defect of consent and of the matter itself, which was estimable by no price. Moreover he himself was the cause of the buyer's loss. C. I. 1504; C. G. 1647. Cf. C. H. 1460, 1094 ff., 1487, 1488, 1497; C. A. 1061.

When is the seller liable for eviction of the thing? He who handed over a thing to another from an onerous cause, or the author, if that person is deprived of that thing, must furnish eviction to him; for to evince is to take away something by overcoming. Hence the seller is liable for eviction whenever the buyer is juridically disturbed from possession of the bought thing. Exception, unless it was otherwise agreed in the contract. The reason is that the seller then cannot transfer ownership of the thing. - He is also bound to refund the price to the buyer when it is discovered that the sold thing certainly pertains to a third party, here and now claiming it. The reason is the same; for the seller could not transfer ownership of a thing which he himself did not have. But he is not bound to this in conscience before the sentence of the judge, unless it is altogether certain to him that the thing truly belongs to that third party; nor is he bound easily to give faith to others asserting that it is so, since presumption favors him and no sentence of the judge has otherwise intervened. - But when place is made for eviction, the author is bound to defend the defendant at his own expense, and, when the thing has been evicted, to furnish him indemnity. Wherefore he must restore to him what he received from him for the thing, refund to him the expenses of litigation made, and that which is of interest. For eviction must be furnished from a certain tacit contract between giver and receiver. And thus, if the value of the evicted thing has increased, its increased price is owed. C. I.

1481 ff.; C. G. 1626 ff.; C. A. 928 ff.; C. A. 1474 ff.; C. L. 1581; Troplong della Vendita c. 4 on arts. 1626, 1633. In a redhibitory action the buyer is liable for deteriorations; in eviction he is not liable for deteriorations even occurring by his fault after the sale. In a redhibitory action the buyer must restore fruits; in eviction he is not bound to give an account of consumed fruits. In a redhibitory action the buyer is bound to restore improvements and accessions; in eviction the buyer retains for himself everything which increases the thing. Troplong della Vendita cap. 4, a. 1647, num. 572.

Who can sell and buy? All can sell and buy who generally can contract and are not specially prohibited in the Law. C. I. 1456; C. G. 1594; C. H. 1457; C. L. 1559, 1560, 1567. By Canon Law, rectors of churches, beneficiaries, regular men, and all religious women can sell ecclesiastical goods, immovable and precious movable goods, neither licitly nor validly. Lugo Resp. Mor. 1. 4. d. 31; E. M. By Roman Law, judges and their officials are specially prohibited from buying in the place where they exercise jurisdiction, except things necessary for food, clothing, and daily use. Likewise guardians, curators, and persons subject to them cannot buy the goods of those who are under their care or guardianship, under penalty of nullity.

Purchases are also prohibited to all public administrators; just as the same cannot receive donations. L. unic. C. de Contract. iud.; L. Praesides Dig. Si certum petatur; L. Non licet, L. Si in emptione § ult. de Contrah. empt. By the more recent Laws the following are prohibited: Debtors from selling those immovable goods of their own which have begun to be proscribed by creditors, after the transcribed mandate, commonly precetto, for payment, namely insofar as the creditors' interest is concerned. C. I. 2085; C. G. 686. - Those who have made cession in court; indeed alienations made from the day of cessation of payments are invalidated according to C. I. Comm. 709; and those made within the ten preceding days before cessation of payments are null according to C. G. Comm. 446.

Those who administer goods of a Community or of any public Institute; and those who, in an office, ministry, or public duty, provide authority for goods to be sold, or are present for it; guardians, protutors, curators; parents as regards buying the goods of children who are subject to their power; procurators to whom someone has committed something to be sold in his name; all these, under penalty of nullity, are prohibited from buying the aforesaid goods, even under auction. C. I. 1457; C. G. 1596; C. H. 1459; C. L. 1562, 1565.

Those who, because of office, act in court, as magistrates, clerks, advocates, procurators, indeed also notaries, are prohibited from buying back, likewise under penalty of nullity, lawsuits and litigated rights whose cognition pertains to the curia, tribunal, or praetorship of which they are part, or in whose jurisdiction they exercise office. C. I. 1458; C. G. 1597; C. H. 1459; C. L. 1562, 1563. Cf. C. A. 879; C. B. 456 ff. The purchase and sale of immovables is prohibited to minors, wives, and interdicted persons without the formalities prescribed by law. - Purchase and sale is specially forbidden between spouses, except in a few cases, according to C. G. 1595; and according to C. L. 1564, and C. H. 1458, unless they were separated as regards goods. Sometimes the right of preemption can be reserved for someone. C. B. 1094 ff. Then others cannot buy.

What things can be sold? Sacred things cannot be sold. Cf. 508 ff. Things of public right also, such as public roads and a public forum, cannot be sold. Inst. 1. 3. t. 24. § 4. But by the very Natural Law, the sale of those things is prohibited which by their nature can serve only for evil, e.g., defamatory pamphlets, lascivious pictures, etc. Nevertheless, the sale of these things, although prohibited, is not for that reason null; whence the seller is not bound to restitution. Gousset 836. By Roman Law anyone can sell all his own goods, both present and future, even together, even those which are had in hope, such as future fruits of a field. The things of another can also be sold, e.g., by reason of pledge, mortgage, etc. But no one validly buys his own thing, unless the seller has some right in it. L. Suae rei, L. Si in emptione § rei suae Dig. de Contrah. empt.

By the more recent Laws whatever is in commerce, that is, in the patrimony of individuals or of moral bodies, can be sold; for commerce is the reciprocal right of alienating and acquiring; provided that a particular law has not prohibited alienation of some thing. C. G. 1598. Future things also, such as fruits, grains, offspring, can be sold; whether the right to them is sold, and the sale is aleatory, which is at once valid; or the body, or fruits to be born, are sold, and the sale is under condition, which then will be valid when the fruits are born. Nevertheless the succession of a person still living cannot be sold, even with that person consenting.

C. I. 954, 1460; C. G. 1600. Purchase and sale also is prohibited of the goods of minors, wives, absentees, and interdicted persons, when the formalities prescribed by law have not been observed. Gousset on a. 1598. But incorporeal rights can be sold by Positive Law itself, or also transmitted by any other title, such as promissory notes, credits, servitude, usufruct, right to an opened inheritance; delivery of these is made by remitting the promissory notes or other authentic writings. But if litigated rights are sold, it is lawful for the debtor to redeem them from the buyer, with the price expended restored to him with interest. C. I. 1538 ff.; C. G. 1689 ff.; C. B. 433. Finally an inheritance already devolved to an heir can be sold; and for a sale of this kind there are special positive laws to be observed. Already devolved to an heir; for there is no inheritance of a living person. C. B. 2371 ff. Cf. here 1337. - C. I. 426, 427, 430, 433, 435, 2113, 2114; C. G. 538, 2226, 2227; C. L. 1553 ff.; L. 7 de Haered. vel act. vend. Ecclesiastical goods, as has already been said, cannot be sold without Apostolic beneplacitum. E. M.

What is price, and of how many kinds is it? Price is how much something is worth to all. This saleable value is determined from the suitability of the thing, so that it can be exchanged with other things in human commerce. To all, i.e., commonly, not individually to each person. - One price is legal, another common, another conventional. Legal price is that which has been established by the public authority of the Prince or magistrate, so that it not be exceeded; whence this price is said to consist in the indivisible, since it excludes both increase and decrease as long as the law lasts. Common, or natural, price is that which is imposed on things by the common judgment of intelligent men, the diverse circumstances of things having been weighed.

Hence common price does not consist in the indivisible, but admits a certain latitude. Common price is subdivided into highest, middle, and lowest. Here it must be noted "that the price of cheap things has a lesser latitude than that of precious things; for wine, or something similar, which is worth five, can be sold for six or four; or if it is worth ten, it can be sold for twelve or eight; or if it is worth one hundred, it can be sold for one hundred five and ninety-five." L. 804. But since price, especially common price, depends on several circumstances according to which it is usually judged, the aforesaid rule for defining highest, middle, and lowest price seems somewhat severe and scrupulous. Conventional price is that which is determined by the free agreement of the contracting parties. - L. Si servum 33 Ad leg. Aquil.; C. A. 1058, 1059; Lugo d. 26. n. 38, 39; St. Thomas 1. 2. q. 96. a. 1 ad 3; 2. 2. q. 77. a. 1 ad 1, a. 2 ad 2.

From what causes does the price of things usually increase or decrease? - Resp. To the 1st: The price of things generally is taken from their utility in order to human uses, and according as this utility is esteemed in society or the community. But specifically the price, even just price, is usually increased from the following causes: From scarcity of merchandise, or of some thing, e.g., wine, grain, etc.; for the rarer something is, the dearer it is, according to the common axiom. From the common superabundance of money; for the more something is superfluous, the less it is esteemed.

From the multitude of buyers; for the more numerous the buyers are, the more necessary and useful the merchandise is esteemed. - From greater labor and danger in acquiring merchandise, or greater expenses; for all these things are estimable by price. - From greater labor in selling merchandise, as, e.g., if someone must sell something in small retail portions; for the greater labor in weighing, measuring, etc., is estimable by price. - The price can also increase from the seller's own affection for some thing; and this is called the price of affection. A fortiori it can increase because of the convenience which the seller receives from it; because, as affection, so also convenience is truly estimable by price, since deprivation of the thing is then greater for him. But by no means can it increase, at least according to the common opinion, because of the special affection or utility of the buyer; otherwise what is not one's own would be sold. St. Thomas 2. 2. q. 77. a. 1. Moreover, if it were lawful to increase the price because of the buyer's utility, then contrary to the doctrine of Benedict XIV it would also be lawful to demand usury from a loan because of the borrower's utility. Moreover, if from the circumstances it is established that the thing is commonly esteemed at more because of that special utility which it will bring to the buyer, it will be lawful to seek a greater price. Thus sometimes a little field, which in itself is worth little and offers almost no utility to the owner, is of very great value to the owner of a neighboring estate; and therefore it is justly sold at that price which seems equitable to most people, that matter being considered. The price can increase because of delay of payment, provided nevertheless that it is contained within the latitude of the just price, or the legal rate for mutuum is not exceeded, or there is reason of some title of emergent loss, ceasing profit, danger of the principal, frequency of buyers who are increased thereby, custom of the place, etc. The reason is clear from what was said above concerning just interest. - Likewise a thing can be sold more dearly if the seller is going to sell it for more at another time, or if the price is to be handed over by the buyer at a time when the thing will be worth more. Finally, a thing cannot be sold beyond the just price for this reason, that the seller from his own ignorance or imprudence, or even from a fortuitous event, bought it at a greater price, or underwent greater expenses than others commonly pay or undergo. The reason is that prices of things do not increase or decrease from what happens to one person or another, but from what commonly happens. Nor, from the fact that some private merchant has suffered theft or shipwreck, is the price of things usually increased in the estimation of the people; just as the price of grain is not usually increased because one or another farmer has lost the fruits of his fields by fatal hail. But it would have to be said otherwise if many merchants had lost their merchandise in shipwreck, because the merchandise, having become rarer, would by that very fact increase in price. Ithur. Cas. 4. n. 11; Elbel 587; L. 768, 801-811, 829; Gousset 840.

Resp. To the 2nd: The price of things usually consequently decreases from opposite causes: From abundance of merchandise; for, as has been said, the more something is superfluous, the less it is esteemed. From scarcity of money, for the rarer this is, the dearer. From scarcity of buyers, and accordingly it is lawful to buy more cheaply in favor of a seller who is seeking a buyer; because voluntary things become cheap according to common estimation. Hence at least probably it is also lawful to buy more cheaply where merchandise is sold because of poverty; for the seller's need does not cause common estimation to change. From the intrinsic cheapness of things, or from greater ease in acquiring or preserving them, or from the danger to which things are exposed, e.g., with war or shipwreck threatening, etc. From lesser labor in selling things, as, e.g., when things are bought in gross, i.e., a great quantity of things is bought together and in a heap for one price. It can also be bought more cheaply if the thing is to be handed over at a time when it will be worth less; or if the buyer is going to acquire it at another time for less.

From represented, commonly anticipated, payment of the price, a thing can likewise be bought more cheaply, provided one remains within the latitude of the just price, because present money, like present merchandise, is esteemed more than what is hoped for; or provided legal interest is not exceeded, for it is a certain virtual mutuum.

Hence the price of the same thing, because of diverse extrinsic circumstances, is usually raised and lowered within a short time, as is clear from the daily practice even of sellers and buyers. Ithur. Cas. 4; L. 801-811; St. Thomas 2. 2. q. 77. aa. 1, 2.

What price must be observed in sale and purchase? - In sale and purchase, speaking per se, the legitimate price must be observed; and, in defect of this, the just common price. The 1st reason is: because that which is established by public authority by office and for equity must also be observed in conscience. But legitimate, or taxed, price is something of this kind. Whence, if someone sells something to an ignorant buyer above the taxed price, he sins not only against legal justice, or obedience owed to the Prince, but also against commutative justice, and is bound in conscience before the sentence of the judge to restore the excess. But those who sell below such a price, if the price is taxed by law in favor of sellers, sin against legal justice and charity, insofar as damage to other merchants follows from this. The 2nd reason is: because, when authoritative taxation by the Prince and magistrate is lacking, there is no better measure of the price of things than the common estimation of men. Moreover, since common price is threefold within the limits of justice, namely highest, middle, and lowest, it is lawful to sell and buy at any one of these. - Speaking per se; for sometimes it is lawful to exceed the legal price, namely: 1. If it is not observed by the greater part of men, while the Prince knows and is silent; for then he tacitly approves. 2. If things are notably changed; for then the rate becomes unjust. 3. If merchandise is notably more precious or worse than usual; for the law touches things of ordinary goodness. Ithur. Cas. 4. n. 9; Elbel n. 500; L. 803; St. Thomas 2. 2. q. 77. a. 1, a. 2 ad 4.

If not only legal price is lacking, but also common price, because it concerns things not necessary for common living, such as jewels, precious paintings, ancient things, ancient codices, etc., more probably they are to be estimated according to the judgment of experts in that matter, with attention to the circumstances and regard for the novelty, antiquity, rarity, etc., of the thing. The reason is that they are regarded as suitable judges in things of this kind, as the people are in common things. "Nevertheless I except from these," says St. Alphonsus 808, "the use of an honest woman, which, since it is inestimable by price, she will be able without injustice to accept very much for it." Yet the opposite opinion appears probable to others, because in that case the just price seems to be that concerning which the contracting parties agree. The probability of this latter opinion can be admitted by limiting it to the case in which it is not a matter, on the one hand, of a thing which among experts has in reality great value, and, on the other, of a price altogether cheap; for then there is error in the very substance of the contract. Whence St. Alphonsus asserts that the buyer is bound to supply the price if, e.g., he buys for a few asses a precious gem which is regarded as glass. L. 819. Nevertheless, as the same St. Alphonsus notes ib., that price must be regarded as just concerning which each party agrees, if because of ignorance of the value he commits himself to the danger of lot. Moreover such things, which are not necessary for common living, admit a very great latitude of price. - L. 735, 801, 811; Ithur. Cas. 4. n. 10; Sporer de Matr. 583.

He resolves: For this reason an honest woman can by right demand even marriage with a most noble and most wealthy man, even a Prince, which, unless another stronger reason stands in the way, is consequently owed by right. An honest woman, and a fortiori a virgin; for a prostitute, since she is prepared to prostitute herself with all, does not herself greatly esteem, nor do others commonly greatly esteem, the loss of her honesty; whence she cannot demand a greater price than what is commonly given. Lugo d. 18. n. 47; d. 26. n. 49.

Whether it is lawful to buy below the lowest price precisely by reason of anticipated payment, before the merchandise is handed over? Resp. Affirmatively, by reason of various titles which are accustomed to come extrinsically to mutuum, if they are truly present and due equality of price is preserved with respect to titles of this kind. For it is in reality a certain mutuum. - Resp. Affirmatively, by reason of the proper nature of this mode of selling; since this manner of selling brings about rarity of buyers, multitude of sellers, and brings great convenience to sellers on the part of the buyers themselves. Lessius 1. 2. c. 21. n. 62; L. 811.

He resolves: Hence it is also lawful to sell more dearly because of delayed payment of the price, on account of the same reason of mutuum, and because this manner of selling, since on the contrary it brings about a multitude of buyers and rarity of sellers, increases the price of the thing according to common estimation. L. 811; Less. l.c. n. 57; Gousset 841.

Whether names of debts or credits can be bought more cheaply because of certain and anticipated payment? Resp. Negatively as regards "promissory notes, which are commonly called fides crediti, for which no moral danger is present, provided that, because of distance, collection would not be inconvenient or dangerous for oneself, on account of him who must be sent to collect." L. H.

A. tr. 10. n. 179. - Resp. Affirmatively, if the credit is uncertain or of difficult collection, "even if it is easy for the buyer to collect it whole; because price is taken from common estimation, not from the circumstance of the particular buyer." If the credit is liquid, it is disputed. The first opinion denies. The reason: "because an action to a liquid credit, in reality, when no danger or expense for recovering it is present, is worth as much as the money owed itself." The second opinion affirms. The reason is that, since in practice these credits are commonly liable to dangers and inconveniences of this kind, they decrease in price according to common estimation. "But in purchase, only the estimation of men constitutes the just price of things, and here provides the title of buying for less." L. 829, 830. Moreover, "because they are equivalent to money lent, therefore from the same reason as in mutuum, it is lawful to perceive moderate profit, according to the legal rate."

Gur. 894. This sale is perfected as soon as buyer and seller have agreed concerning it as regards the credit, or any other right whatsoever, and as regards the price. But, so that it may be valid with respect to third parties, it must be announced to the debtor, or accepted by him by authentic act. Therefore the debtor is freed if before this he has paid the prior creditor. C. I. 1538-1540; C. G. 1689-1691; C. H. 1327; Lugo Resp. Mor. 1. 6. d. 18.

Whether you can sell at the current price a thing which you know will soon be worth less? Resp. More probably and more truly, affirmatively. The reason is that the present price is just and not yet changed, provided nevertheless that this knowledge is private; for if it were common, the price would already be changed. Sometimes, however, you can sin against charity, if, e.g., by such a sale the buyer would be reduced to extreme or grave necessity; for just as charity commands that we assist a neighbor gravely in need, so it forbids that he be reduced to poverty so that we may acquire riches for ourselves. Nevertheless, where it concerns only grave necessity of a neighbor, it is not sufficiently established whether the sin against charity is always grave, because charity does not forbid someone to consult for himself by using his own right, even if damage accidentally comes to another from this.

Molina, however, excepts the case in which someone, knowing a law that has been framed which diminishes the price, but not yet promulgated, would sell his goods for more because of that knowledge, or would sell at the current price, or would by no means sell. The reason is that public law ought to be equal and common to all subjects; and a Prince would sin against justice if, before it was promulgated to all, he manifested it to certain persons, who, anticipating the promulgation, would profit on the occasion of it with loss to others; and by the same reason, he who used knowledge of it to the prejudice of others, in whatever way that knowledge had come to him, would sin against justice, with the burden of restoring damages which came to neighbors by that way." But handing down the difference between this case and the other case, in which someone knew that other merchandise of the same kind would soon arrive, while the buyers were ignorant of it, he adds: "He who uses knowledge of a law before it is promulgated to enrich himself with loss to others uses knowledge of a thing which ought to be common to all, to the detriment of others, and consequently does injury to them; but he who, for the same effect, uses knowledge that merchandise is arriving does not use knowledge of a thing which ought to be common to all; rather, this pertains to the industry, art, and event of fortune of merchants." De Iust. et Iur. t. 2. d. 354. n. 5. - But others deny this. For abuse of power is one thing, if, e.g., for this reason the Prince or magistrates should defer promulgation of the law until they themselves could sell their merchandise or money, for the Prince and public magistrates do not have power except for the common good of subjects; but mere use of knowledge is another thing, which the Prince and other magistrates legitimately have, and which they can legitimately use, if from some reasonable cause the promulgation of the law must be deferred. - L. 824; St. Thomas 2. 2. q. 77. a. 3; Lessius 45-48; Lugo 140-143; Gur. Cas. 90; Struggl tr. 3. q. 1. n. 16.

Whether you can sell at the current price a thing mixed with another cheaper thing? - These are the words of Molina, de Iust. et Iur. t. 3 d. 353. n. 33: "When the price is not taxed by law, and something is admixed to the things which are sold, as water to wine, or some unusual things to medicines, a distinction must be made. For if the mixtures can bring harm, then those selling things mixed in that way are bound for all subsequent damages, and likewise to restitution of that by which those things are worth less to the buyer than what he gave for them.

But if they do not bring harm, yet the things are less useful for that for which they are bought, then those selling are bound to restore what they are worth less to the buyers for that for which they are bought; wherefore, if they conduce nothing to that, they are bound to restore the whole price; as if a medicine because of the mixture is rendered useless for that for which it is bought. But if the things mixed in this way are useful for that for which they are bought, and as much is deducted from the price as is fair because of the mixture, then those selling are not bound to restitution, because they have not exceeded the just price; nevertheless they sin, unless compelled by necessity to do this, as because otherwise they cannot draw out the just price of the thing, for example, of wine, unless they mix a little water with it; or unless the thing with that mixture truly is worth what is given for it, and the buyer would not buy a better one for that price. Nevertheless sellers must be kept away from frauds and deceptions of this kind." The same must be said if artificial things are sold as natural, e.g., artificial wine, artificial butter, as natural wine and natural butter.

If the artificial thing is equally useful as the natural, and the price is suitably diminished, and the buyer does not declare that he wishes to acquire for himself a natural thing, not an artificial one, the contract is valid, and there is no obligation of restitution. - L. 820, 821; St. Thomas 2. 2. q. 77. a. 2. Nevertheless to substitute artificial wine for natural in sale is per se injustice. And the same is per se true in any other thing, since there is substantial error; and any buyer would reasonably be unwilling if he knew of the substitution.

Whether merchants are bound to restitution who by fraud or lie induce buyers to buy their merchandise at a greater price than they would have bought it, although they do not exceed the highest price? Resp. As regards fraud, affirmatively. The reason is that fraud is the efficacious and unjust cause of the damage which the buyer suffers; but each person has a strict right not to be induced by fraud or deceit to suffer any damage. - As regards a lie, per se the same would have to be said, since it also is of itself an unjust cause of damage. Nevertheless it must be noted "that commonly faith is not given to the lies of sellers, since these are sufficiently known to be common stratagems; whence they are regularly not bound on account of this to restitution.... I said regularly, because if sometimes the seller certainly noticed that the buyer believed the lies, and therefore bought for more, then indeed he is not to be excused from injustice." L. 805. Wherefore he is bound to restitution if by lies and frauds of this kind the seller truly induced the buyer to buy merchandise at a greater price, although he does not exceed the highest price. 1 Thess. 4:6. - St. Thomas, Quodl. 2. a. 10.

Whether or how do merchants sin who, when questioned about the price of merchandise, notably exaggerate it? If they truly intend to sell at this price, they sin against justice by wickedly desiring another's property; and they are bound to restitution if in fact that price is paid to them. But if they intend only to give the buyer a place for offering his own price, so that thus they may come to the just price, they are excused, because it is known and customary for merchants to speak in this way, so that they may bring buyers to the just price.

Whether those who diminish or adulterate a thing sold at the lowest price before delivery sin against justice? Resp. Affirmatively, because they act against the pact entered into with the buyer. For although it is lawful to sell at the highest price, nevertheless it is not lawful for a merchant who sells at the lowest or middle price secretly to acquire for himself a middle or highest price by diminishing the quality of the merchandise, or by subtracting from the measure or weight; otherwise agreements would be entirely useless. Lev. 19:35; Prov. 20:23. Exception: if the price either has been taxed by law, or is unjust by the malice of conspiring buyers. For equality is the essential property of this contract. Hence then it is not injustice to compensate oneself by diminishing the quantity of merchandise. Lugo 137; L. 822.

Whether European merchants sin against justice who sell knives, mirrors, and other things of this kind among Indians at the highest price, which among us are held to be of cheaper price? Resp. Negatively, because although these things are cheaper in our regions, nevertheless they are commonly esteemed highly by Indians or Chinese, etc.; but common price is determined from the common estimation of men of the region. - L. 804, 808.

Whether those sin against justice who buy precious things for a cheap price when they are exposed for sale among secondhand sellers, commonly rigattieri? Resp. Negatively, because those things are judged to have lost the old price and to receive another by custom, or by agreement of the contracting parties. Whence things of this kind receive very great latitude with respect to price. Thus sometimes books are bought for a few asses which could have been sold for five or ten francs. The same must be said of the purchase of old furniture, because these things are commonly held to be of lesser value. - L. 807.

Whether conventional retraction, or a pact of retro-sale in favor of the seller, is licit, namely so that at a certain time, or whenever he wills, the buyer is bound to resell the thing to the seller? Resp. Affirmatively. And this is established from the law of Lev. 25; L. 7 de Pact. inter empt. et vend. comp. C.; L. 2 ib.; Less. 1. 2. c. 21. n. 113; Lugo d. 184. The reason is that the owner of the thing can dispose of his thing as he himself wishes, provided justice is preserved. Therefore, with due diminution of the price made for the burden imposed on the buyer, a pact of this kind is licit. How great ought such diminution to be?

Some wish a third part of the price; others hold that a fourth part of the price must be deducted; others more truly think that the matter must be defined from the judgment of prudent men, all circumstances having been duly weighed. C. Ad nostram 5 de Empt. et vendit.; L. 812. But the buyer, in redemption of the thing on the part of the prior seller, can demand that a greater price be paid to him than that which he himself paid. "Because by the very fact that the thing is sold with a pact of retro-sale in favor of the seller, it must be sold at a lower price below the just price because of that added burden. But when it is afterward sold to the same seller, it is given without any burden. Therefore it must then be bought at the full just price. Therefore the buyer cannot be compelled afterward to resell at a lower price without injustice."

Hence a buyer who bought a thing at the lowest price can demand the highest price from the prior seller. For one selling his own thing can demand the just price which the thing is then worth. And at least he can demand that the price now be increased as much as it had been diminished in the prior purchase. Lugo ib. n. 192, 199. - But since the buyer meanwhile enjoys that portion of diminished price, and the convenience and fruits of the thing, he can indeed in the pact of retro-sale also demand by pact that the thing cannot be redeemed by the owner at a price lower than that at which he himself had bought the same from him, but he absolutely cannot demand by pact that it be redeemed by the owner only at a greater price.

For absolutely, to preserve justice, it suffices that the owner, redeeming his own thing, pay a just price; and the just price in the case is not always necessarily a greater price. But a pact is licit that the seller can redeem his own thing by restoring the same price which he received. For then it is a certain simple dissolution of the sale from the mutual will of the contracting parties. Moreover, there is no injustice in the buyer receiving only as much from the prior seller as he himself gave to him. For if this price is just, the matter is clear; if it is less than just, it can be sufficiently compensated to the buyer by the convenience and fruits of the thing meanwhile received by him.

C. I. 1515; C. G. 1659; C. H. 1507; C. A. 1068; C. B. 497. Moreover, in order that a pact of retro-sale be licit, it is necessary that the danger of the thing sold not be with the seller, unless the price is increased by a just estimation of the danger. But the thing to be restored by the buyer is understood to be such as it was when accepted by him, without deterioration or new burden. L. 812; C. H. 1519, 1520; C. I. 1528; C. G. 1673; C. A. 1069; E. M. Therefore the buyer, as true owner of the thing, receives all its fruits and exercises all rights inhering in the thing meanwhile, until the seller exercises his right of redeeming the thing. C. G. 1665.

Retro-sale is had as soon as the seller offers the price to his buyer. Nor is it necessary that the price here and now actually be given. As sale is perfected by simple consent, so also retro-sale. Hence the prior sale is immediately dissolved, and the seller can vindicate his own thing from any possessor. Cf. Troplong on a. 1662. But together with the thing, the increase made to it by alluvion must be restored. Likewise the part of a treasure found in a field must be restored. For the former accedes to the thing and follows the thing; the latter likewise by right of the soil is owed to the owner of the thing. But the buyer's ownership, while the condition of retraction is pending, seems to remain suspended. Cf. Troplong on a. 1673, n. 766 seq.

Whether a pact of repurchasing at the judgment of the buyer is licit? - "The first opinion denies ... because in reality the thing does not seem to be sold, but only given in pledge, so that the buyer perceives fruits from his money, which he can recover at his own pleasure.... The second and most common opinion affirms.... I certainly think this more probable, yet with these conditions: 1. That there be a true intention of buying and selling. 2. That the buyer pay a greater price, according to the estimation of this burden which he imposes on the seller. 3. That the seller not be obligated to repurchase at the same greater price which he receives.... Hence I judge that in such a contract the buyer cannot oblige the seller except to paying only the price according to the value of the thing at the time of repurchase; and conversely, if the thing increases, it increases for the seller, H. A. tr. 10. n. 181; for the excess of the just price given to the seller pertains wholly to him, by reason of the burden imposed on him of repurchasing at the judgment of the buyer. With these conditions preserved ... the burdens are compensated on each side." L. 813; E. M.

He resolves: Consequently a pact of retro-sale in favor of both seller and buyer at the same time is licit, provided due equality of price is preserved, so that it is less than the price which would be demanded if the pact were in favor of the buyer alone, but greater than the price which would be paid if the pact were in favor of the seller alone. Wherefore, since burden is compensated by burden, it suffices to sell the thing at the ordinary price.

What is established by more recent laws concerning retro-sale? According to C. L. 1587, retro-sale is prohibited. According to C. I. 1515, 1516, 1520, 1528; C. G. 1659, 1660, 1664, 1673; C. H. 1507, 1508, 1510, 1518, 1520, a pact of redemption or recovery in favor of the seller alone is lawful, yet in such a way that the faculty of recovering his own thing is not extended beyond five years, according to C. H. beyond four years or beyond ten years; once this time has elapsed, the thing irrevocably becomes the buyer's.

Within this time the seller can pursue his own thing even with another who has acquired it from the buyer. - The seller seeking back his own thing must not only restore the principal price, but also pay expenses for the contract of sale, and those which the buyer underwent for necessary repairs of the thing, and likewise those which increased the value of the estate. Unless he has satisfied all these things, he cannot obtain possession of the thing. But when he returns into possession of the estate, he receives it immune from any burden and mortgage by which it was burdened by the buyer; nevertheless he is bound to observe the contracts of lease which the buyer entered into without fraud; and according to C. I., if they were not constituted beyond three years.

According to C. A. 1068-1071, a pact is permitted of repurchasing at the judgment of the seller, and of reselling at the judgment of the buyer. The thing and the price are to be restored in each case, unless the thing has been made better or worse; for then compensation is owed. According to C. B. 497 ff., a pact of repurchase at the judgment of the seller is permitted at the same price of sale, unless meanwhile the thing has become better or worse. The right of repurchasing can last up to thirty years for estates, up to three years for the remaining things. But since these laws were passed for the cause of public utility, therefore they have force even in the forum of conscience. Cf. C. H. 1521 ff.; C. A. 1068 ff., 1072 ff.

What is mohatra, and is it licit? The contract mohatra is that by which someone buys merchandise at a greater price on credit, with an explicit or implicit pact that the same thing be immediately sold back to the seller at a lower price and for counted money. - Such a contract is altogether illicit.

This is established 1. from proposition 40 condemned by Innocent XI. 2. Because it is disguised usury; for the burden is imposed on the buyer of immediately selling back at a cheap price without any compensation and without any just title which is otherwise found in mutuum. - If nevertheless the thing is sold back without a prior pact, even for less and to the same seller, provided every usurious intention is absent, of itself it will be licit; because then no burden is imposed against natural equity. And, if the excess which is demanded is a suitable profit by reason of mutuum, then no illicit usury is had in it. - L. 813; E. M.

What is sale by auction; is it licit; what is its nature? Sale by auction, or through bidding, is that which is made by a herald, and in which the thing is ascribed to the final bid. Sale by auction is licit, whether it is made with the consent of the owner or against his will, or by public authority; whether it is bought below the lowest price or sold above the highest. The reason is that in the first case there is a conventional price, but in the other "public power approves as just that price which is proved publicly by the concurrence of buyers." L. 808; C. G. 1686. Hence, if buyers concur, the thing becomes more estimable; if they do not concur, it is held cheaper since the thing is offered voluntarily; and it can be sold for as much more, bought for as much less. Consequently, in it there is no place for rescission under title of lesion, nor for redhibition. C. I. 1308, 1506, 1534; C. G. 1649, 1684. But eviction does not cease in it; and, when the thing has been evicted, the price must be restored to the buyer in forced sales, not by the debtor whose thing was sold and to whom it profited by payment, but by his creditor, because it was paid to him without cause. C. I. 1237; C. G. 1377; C. B. 156.

The price which is determined by the concurrence of buyers also has place in the lease of work and labor, e.g., in building a house, in conducting business.

Whether the seller can withdraw his own thing once bidding has begun, if a lower price is offered? Resp. Negatively per se. The reason is that buyers publicly summoned to an auction acquire a certain right to the saleable thing, insofar as a tacit stipulation is made that it yield to the one offering more. Nevertheless the rigor of this doctrine must be tempered if a contrary custom is in force, by force of which the contracting parties consent to this, that the seller withdraw his own thing if it would be sold below the lowest price. But this inconvenience is prevented by establishing from the beginning the lowest price at which bidding should begin.

Whether the seller can send fictitious bidders so that the price of the thing may increase? - Resp. Negatively. The reason is that this is fraudulent, especially if it is done with money offered to them, since it tends toward increasing the price, and thus toward deceiving sincere buyers, and accordingly does injury to them, since they are the cause that the price increases from that fraud, and not from the natural concurrence of things, namely from the free concurrence of buyers. Wherefore then restitution in integrum belongs from fraud. With money offered; this is permitted to the buyer, so that he may redeem the unjust vexation of other bidders; whence it is also permitted to the seller to draw other buyers in this way to the bidding, to redeem unjust vexation, so that his things may be sold at least at the lowest price. Much less is it lawful to feign wanting to participate in bidding, so that someone may extort something from true bidders. It is evident deceit and fraud.

Whether he whose goods are sold in favor of creditors can send friends to buy them in his name? Resp. Affirmatively, if the bidding is forced, or if it is made by public authority; for he whose goods are sold ought not to be of worse condition. Besides, he himself is not properly selling, since the sale is made against his will. Therefore. - Resp. Affirmatively also if the bidding is voluntary, because, as the buyer can turn away other bidders by using a request, so the seller, by using the same request, can summon other bidders; and if these, though not asked, could bid in favor of the seller, why could they not do the same when asked, provided that all fraud is absent in this matter, namely if they buy in their own and true name; and, if they buy in the name of the seller, by law or by custom he can withdraw his own thing when the thing would not obtain at least the lowest price. For if he can then withdraw it, he can also buy in this way.

Whether a buyer can make a pact with others that they not bid, or not offer more? St. Alphonsus denies it "at least in the case in which by sentence of the judge a thing is exposed to auction. The reason is that then the owner of the thing is altogether bound to hand over the thing to the one offering more; and therefore the buyer inflicts injury on him if, by offering only the lowest or middle price, he impedes the seller from the attainment of the highest price, to which he has a right, namely that he not be impeded from attaining it."

L. 808. - Several, however, except the case if the buyers are joined by partnership, or as though joined, as brothers, friends, etc., because they make as it were one moral person, and it cannot be demanded that they bid against themselves. Others also probably except if the custom is in force that the seller withdraw his own thing when a lower price is offered to him; because if he himself can impede the price from being too small, equity also requires that he not complain that buyers agree lest the price be increased too much. - Others, however, affirm absolutely. Reason 1: because in any sale by auction per se the owner is bound to hand over the thing to the one offering more. 2. By making a pact with someone, the buyer does not impede the owner from obtaining the highest price of the thing, for others can concur and offer. 3.

The seller does not have a right that someone not be impeded in any way whatever from concurring, but that he not be impeded by force and fraud; otherwise he could not be impeded even by requests. 4. As anyone can freely not concur at auction, so he can freely oblige himself not to concur. Nevertheless civil laws approve this in no way. C. I. Poen. 299; C. H. Poen. 555. - Gousset 843.

What is monopoly, and whether it is licit? - Monopoly, as to the name, is the same as the sale by one. As to the thing, it is the power of selling existing in the hands of one or of a few. Monopoly can occur in four ways: 1. If the Prince, for a just cause, grants a privilege to someone that he alone sell some kind of merchandise; and this certainly is licit, namely when it contributes to the common good, with a legitimate price fixed. Others, however, sin against justice if they themselves make and sell similar merchandise. 2. If a merchant by force and fraud prevents other goods from being brought in, so that he may sell his own goods to the damage of the commonwealth; and this certainly is illicit, and he is bound to restitution of the damage, e.g., if he spreads false news that ships have been sunk, or similar lies. 3. If one or a few buy all the goods so that afterward they may sell them at as high a price as possible. And this is illicit if the things are useful and necessary for life, and do not pertain only to luxury and delicacies, and if the highest price is that which results from the very fact of monopoly. 4. If sellers conspire among themselves about the price, so that they do not sell for less; and if the price is just, this of itself is not illicit. L. 814, 815.

This question of monopoly, as to its various cases, can easily be extended to the workers themselves, and the various resolutions can also be applied to them. But this question, as regards workers, is quite different from the other question of ceasing from work and labor, which, after a freely entered contract for the hiring of work, is not only illicit, but also unjust of itself, and very harmful to the good of private persons and to the good of the state.

Whether merchants sin against justice, or against charity, who, at the time of harvest or vintage, buy all the wheat or wine of a region at a very low price, so that afterward they may sell it more dearly? It is certain that this is licit if the goods bought are not necessary for the sustenance of life, or for the common condition of the commonwealth, such as precious gems, noble horses, women's adornments, and the like. L. 816. But if the discussion concerns things necessary for the sustenance of life, the negative answer is more probable, as it seems, with respect to justice, provided they do not sell above the highest price which would prevail apart from monopoly. The reason is that they violate no one's right. The negative answer is also more probable with respect to charity, provided they do not induce others to sell more dearly, nor themselves sell above the highest price which would have place apart from monopoly; because they use their own right. For no one is bound to neglect his own advantage in order to avoid another's damage which he is not bound to avert. - L. 816, 833; Lugo 176; Less. 150-152; Molina d. 345, n. 7. - 19.

1. Tullius buys a house from Marcus for the price of 60,000 lire, with the pact, however, that the house would be handed over only after a year, namely, when the time of a lease of the same house already made to others had elapsed; and then also the handing over of the price would be made.

The contract having been perfected, and a public instrument also having been made, after some months the whole house is burned by an accidental fire. Hence, the year having elapsed, Tullius refuses to stand by the contract.

2. Titirus, from the abundant flock of sheep which he had, sold one hundred sheep, to be handed over to the buyer after autumn, and then also he himself would receive the price. But by a fatal stroke of lightning the whole flock perished. But the buyer at the established time demands one hundred sheep from Titirus.

Q. What as to the case?

R. Tullius must altogether stand by the contract, and is held to pay the price. For by Roman Law, although, the thing not having been handed over and the price not yet paid, the seller keeps the ownership of the thing, and the buyer does not acquire a right in the thing, but only a right to the thing; nevertheless, if the thing perishes before delivery, and it was certain and determined individually, it perishes for the buyer; for the risk of the thing pertains to him no less than its increase. I. M. 1127. But by more recent law, Italian and French, the contract of sale having been perfected by consent furnished on each side, the ownership of the thing pertains to the buyer, and for him it perishes, or becomes worse, just as for him it increases and fructifies. I. M. 1128.

If Titirus had had only one hundred sheep, and had sold them individually, then, as in the preceding case, so in the present, the buyer would have had to sustain their destruction and pay the price. But since Titirus had an abundant flock of sheep, and from the whole flock of sheep sold only one hundred sheep, the sale then was not of a thing certain and determined individually, but of an indeterminate thing. But the risk of a thing indeterminate individually pertains to the seller. Hence, if from the whole flock one hundred sheep have survived, Titirus must hand them over to the buyer, the price being received. If fewer have survived, he must hand them over to the buyer also, the price being received but diminished in due proportion. If finally no sheep has survived, Titirus is indeed not held to buy one hundred sheep and hand them over to the buyer; for this was not the agreement made, but it was merely the sale of one hundred sheep from the whole flock; and since that flock perished without any fault of Titirus, delivery has become impossible; and therefore neither is their price to be paid by the buyer. I. M. 966, 1127, 1128; G. 908, 936-938.

3. A merchant buys several casks of wine, the price being established for each measure of wine; he gives earnest-money to the seller, and marks each cask with his seal. The casks are carried to his shop, and after a month he himself tastes the wine and finds sourness. The merchant then wishes to return the casks to the seller as if unbought. The seller refuses to receive them as sold, and says that the damage must be sustained by the buyer.

Q. What as to the case?

R. It is indeed certain that the sale of that quantity of wine, the price being established for each measure of wine, depended on the measuring of the wine; and consequently it was not made per aversionem. But that measuring ought not to have been lacking in the case, since those casks of wine were even carried to his shop. - As to tasting, there is no doubt that, if it was explicitly added as a suspensive condition of the sale and purchase, before it the sale and purchase is not understood to be perfected; and the buyer is held to taste. And if he does not wish to taste, it is the same as if he tastes and approves. If that condition was not explicitly added, it is tacitly present, because the question concerns a thing which is not customarily bought unless it has first been tasted and approved; and because such is the law, there is altogether no sale and purchase, and the buyer can withdraw and not taste. - But neither is there any doubt that someone can renounce that tasting, as when someone writes to an absent merchant that he should send him such a quality of wine. Tacitly he renounces tasting, and if truly that quality of wine has been sent, the sale and purchase is perfected.

Moreover, that merchant seems altogether to have renounced tasting; for the casks of wine were carried into his shop, and therefore, delivery of them having been made, the risk of the same no longer pertains to the seller, but to the buyer. For delivery is an argument of acceptance of the thing. Moreover, he marked the casks with a seal; concerning which indeed the Doctors doubt. For some say that this is done not that tasting be renounced, but lest other wine be introduced into the cask, or one cask be substituted for another; and therefore, the sale not yet being perfected, the risk is still the seller's. But others say that by the very fact that the buyer proceeds so cautiously and diligently in signing the casks, he is presumed to have tasted the wine or to have renounced tasting; since by the deed of thus preventing alteration and change of the wine, he shows that the wine pleased him, and that he has already approved it. And thus also it is said in L. 74 de Contrahenda emptione: "When the keys have been handed over, the possession of goods stored in warehouses seems to have been handed over, if the keys have been handed over at the warehouses: this being done, immediately the buyer obtains ownership and possession, even if he has not opened the warehouses; but if the goods were not the seller's, usucapion will immediately begin." - L. 1 de Peric. et comm. r. vend.; Troplong, della Vendita, n. 101 seqq.

Finally, since the merchant kept the casks with himself for a whole month and delayed in measuring and tasting the wine, who indeed can any longer doubt that the aforesaid merchant must sustain the damage of the sourness, since that defect of the wine could well have been contracted in his own warehouses in so long a space of time?

4. Asprenius, having entered a wine shop, bought for 30 lire a cask of wine, which the merchant said contained fourteen cadi. Asprenius marks it with gypsum, closes it with cork and pitch, and marks it with his seal. The cask is carried to his underground cellar. After a month Asprenius, measuring and tasting the wine, finds sixteen cadi. Must Asprenius undergo the damage of sourness, and besides pay the price of two other cadi?

R. The sale of the cask, as appears from the case, was made in bulk, and was not conditioned; and its price was certain and the thing sold determined. It is indeed true that the quantity of wine contained in the cask was added by the seller; nevertheless that declaration of the seller does not make a condition, but only a demonstration of the quantity sold purely and fully, which gives the buyer the right of demanding the demonstrated and declared quantity, but took away absolutely nothing from the certainty of the sale. Wherefore, that the contract be perfect, measurement was not necessary. Hence, since the seller sold the whole cask, although more cadi were contained in it than were declared by him, he has no right to demand a supplement of price. That declaration was wholly for the grace and favor of the buyer, not of the seller himself, insofar as the seller himself ought to have known well the capacity of the cask. It is not likely that the seller was ignorant of the measure of his own thing. "Nor do you permit yourselves to dwell on empty objections, so that he may plead to himself unknown strengths of places, who ought to have known the strengths, merits, and emoluments of a familiar thing." L. Quisquis de Rescind. vendit. Cod. And if in fact he was ignorant, this ignorance in a thing well known to himself, and in his own proper pact, merits no excuse. Wherefore, because the sale was perfected, Asprenius is held to undergo the damage of the sourness; because it was made in bulk, he does not owe the price of the two cadi. Cf. the preceding case.

5. Albertus sold a house to Bonaventura. Then after a few weeks he sold the same house to Bonavenia, who immediately transcribed the act of sale and purchase. After ten years, Albertus being dead, the two buyers learned that the same house had been sold twice, and they ask whose house it now is.

Q. What is transcription? - 2. What as to the case?

R. To the 1st. Transcription is the presentation of a copy of acts, so that they may be written in the registers of the Hypothecary Office of the place where the goods of which there is question are situated, or where the hereditary succession was opened. C. I. 955, 1938.

To the 2nd. The house belongs to Bonavenia. For first, one who in good faith acquired some immovable thing or a real right to an immovable thing prescribes it and makes it his own after ten years from transcription. C. I. 2137; I. M. 922. Moreover, transcription obtains force even against a third party, even if this one is prior in acquisition, if nevertheless he did not transcribe the contract. C. I. 1942; I. M. 934. Therefore Bonaventura has only a personal action against Albertus; but since he is already dead, he will be able to seek back from his heir the price paid, and also compensation of damages. C. I. 1225 seqq., 1462, 2076, 2094, 2097.

6. "Basilius, a pastor, for the price of 5 francs bought from a simple rustic an old panel of the Blessed Virgin Mary, glued together by long-standing smoke. The rustic rejoices, who could never have sold this image even at a much lower price. But the pastor hastens to place it, cleaned in whatever way, in the parish church. But a few days having intervened, behold, a most skilled English painter, when by chance he had entered the church and had looked at the image, immediately offers six thousand francs for it. For he recognized that it was a genuine work of Raphael. At first the pastor wonders and is stupefied! Nevertheless he judges that a more careful inquiry must be made concerning the price of the panel, and finally obtains from the buyer 20 thousand francs, but soon, anxious, he began to doubt whether he must restore the whole profit to the rustic or not.

Q. Is the pastor held to restitution toward the rustic?

R. Basilius the pastor is by no means to be disturbed. For this panel, so precious, was not valued by either contracting party at more than the price of five francs, nor did fraud or deceit intervene in the contract." Thus Fr. Gury 925. But this reason does not seem convincing. For, from the same Fr. Gury 782, if someone sells at a cheap price a diamond stone, which he considers crystal, to a buyer who also himself thinks such to be its value, the contract is not valid; and nevertheless also in that case a thing so precious is not valued by either contracting party at more, and neither fraud nor deceit intervenes in the contract. Indeed, in that case of the ring the contract is not valid on account of substantial error, which nevertheless, says Fr. Gury 925, is denied in the other case of the panel, "because the error is not concerning the substance of the thing, but rather only concerning its price." But this is not true; for therefore there was an error, and so grave an error concerning the price, because there was an error concerning the very substance of the thing. An error concerning the substance of a thing is not merely an error of the material thing considered in itself, but an error of the thing as estimable by price. Otherwise, indeed, neither in the sale of that crystal stone would there have been substantial error. For the seller saw well that material stone; likewise the buyer saw it well; both erred only as to its preciousness, or its estimation in the ratio of price. For if they had known that it was a precious stone, namely not to be estimated at a common price, whether crystal, glass, or diamond does not matter, the owner certainly would not have sold it at a cheap price. Similarly, in the case of the panel, the rustic and the pastor see well that material panel, but they err as to its preciousness, or its estimation in the ratio of price. Indeed more, if truly that panel is a work of Raphael, in common opinion itself a greater error is certainly judged, as to the substance of the thing, in the case of the panel, than in the case of the stone, since that panel is of far greater estimation, from common opinion.

Nor indeed can the aforesaid sale, in the case, be held as valid from another head, as an aleatory contract by which each contracting party committed himself to the danger of lot. For, as is elicited from the very wonder and stupor of the pastor, after the truth of the thing was discovered, and from his very anxiety, there was no suspicion of the thing; and both the rustic thought that he was truly selling a common and cheap panel, and the pastor judged that he had bought an altogether common panel, the work of any obscure painter.

Fr. Gury, in the two following cases, n. 928, 930, in which the matter concerns old precious coins and an old gold coin, the value of which is unknown by the seller but not unknown by the buyer, says that the sale is invalid. And at n. 928 he says that there is a difference between that case of the coins and the preceding case of the panel, because in this case of the panel the contracting parties are equally in error concerning the value of the thing, but not so in the case of the coins. But that both contracting parties are equally in error, this indeed does not render a contract valid if the error is substantial, unless the contract is aleatory. On the contrary, the error of the seller alone does not render a contract invalid unless the error is substantial. Wherefore, if the contract is invalid when only the seller errs, it remains invalid even if the buyer also errs with him, unless, by common consent, they commit themselves to the danger of lot. Hence, when the matter concerns substantial error, this principle is not true, which again at n. 930 Fr. Gury affirms as to another contract of an old gold coin, namely, that the sale of extraordinarily precious things held for minimal value is probably valid, if each contracting party is ignorant of the true price of the thing. The sophism is in this, that there is not an error of the substance of the thing sold, but an error of its price. For truly, if from an error of price an extraordinarily precious thing is sold for minimal value, now the error of that price evidently shows of itself and includes an error concerning the very substance of the thing sold. For if there were not such an error, would anyone knowingly and willingly sell AN EXTRAORDINARILY PRECIOUS THING AT A MINIMAL PRICE? I. M. 1242.

7. Florentinus, a merchant, in a short time has become rich; while other similar merchants labor under great straits. Florentinus buys goods of the best quality and in great quantity. But he sells them at the lowest price, content with a modest profit in each sale; while on the contrary all the other merchants sell those goods of inferior quality and at a higher price.

Q. What as to the case?

R. Florentinus certainly is by no means guilty of injustice toward the buyers. Nor is he guilty of injustice toward the other merchants. For they themselves, if they wish, can use the same industry. Then, just as Florentinus can give his goods away, so also he can diminish their price. Wherefore Florentinus uses his own right. G. 968; I. M. 1294.

But what if Florentinus mixed other inferior goods with good goods, without the defect appearing; or handed over the best goods, and at the lowest price, but afterward detracted so much from weight and measure, that in reality he sold them at a middle or highest price? He would indeed act unjustly; for by lie and fraud he would induce one to buy at a higher price than was agreed. Wherefore he would be held to restitution. La-Croix 955; G. 940; I. M. 1148.

8. When ecclesiastical goods exposed by the State domain were put up for public sale, under the hammer, Amandus took part in the bidding for them, that he might make extraordinary profit from it. But Alexius, present there, that he himself might be able to acquire the aforesaid goods, offers Amandus a conspicuous sum of money, that he withdraw from the bidding. Amandus accepts the money, and Alexius buys the goods.

Q. What as to the case?

R. 1. Amandus incurs no censure, since he buys nothing, occupies nothing, usurps nothing, and also cooperates in nothing. Moreover, if one who actually takes part in the bidding is immune from censure if the goods are not adjudged to him, S. Poenit. 15 Apr. 1873, much more is he immune who withdraws from the bidding. But Alexius incurs the censure, unless he has sought due permission from ecclesiastical authority. I. M. v. 2. n. 1202.

2. Amandus can keep the money received. For it certainly is not to be given to the Church, since it does not come from the ecclesiastical goods themselves, or from their sale, but from another contract entered into only on the occasion of that sale. Nor indeed is it to be given to the Church on account of harm done to it; for Amandus cooperates in no way in this damage, since he in no way cooperates efficaciously in the purchase. Whence it is that Alexius alone, the buyer, is held concerning the damage of the Church. And here it must be noted that, if Alexius resells these goods and profits thence, he is held to restore also this profit, since it comes from the goods themselves and from their sale, S. Poenit. 1 June 1869.

3. But if Alexius has obtained permission from the Holy See to buy those goods, Amandus then is held to restore the money to Alexius. For Alexius in such a case represents the owner himself, who has the right of vindicating to himself his own thing, without being able to be hindered by another extraneous person. M. E. v. 3. p. 1. p. 73.

9. Antoninus bought a house with a garden for the price of 100,000 lire. The house was valued at 80,000 lire; the garden was valued at 20,000 lire. After three years from the completed purchase, Antoninus suffers eviction of the garden. But, since the price of the garden was increased, so that it is now worth 40,000 lire, he himself demands this sum from the seller, who consents to pay only 20,000 lire.

Q. What as to the case?

R. Antoninus has the right that the thing bought and evicted be compensated to him according to the valuation which the same thing has at the time of eviction. C. I. 1489. Wherefore he can by right demand 40,000 lire for the evicted garden. - But what, in the case, because Antoninus would have wished to buy neither the house nor the garden if he had foreseen the eviction of the garden alone? Then it would be free for him to dissolve the contract, and to use the redhibitory action, by restoring the whole thing to the seller, and demanding from him the price paid. C. I. 1492; I. M. 1133.

10. Bertulfus sold a house to Cornelius for the price of 20,000 lire. Cornelius made many expenses in restoring it. When the restoration was completed, he had to sustain a lawsuit with a certain Maglorius, by whom finally, by sentence of the judge, he was evicted. Cornelius claims against Bertulfus. But the latter wishes to restore nothing to Cornelius, saying that the sale was made absolutely, and that in the contract no mention at all was made of eviction to be furnished.

Q. What as to the case?

R. Cornelius has the right that he be rendered altogether indemnified by Bertulfus, even if no mention at all was made in the contract of eviction to be furnished. C. I. 1482. Indeed more, although it had been agreed that the thing was in no way to be secured, nevertheless, if eviction occurs, the price must be restored by the seller, unless the buyer at the time of sale knew the danger of eviction and took it upon himself.

An agreement concerning the thing not to be secured exempts the seller only from compensation of damages. C. I. 1484, 1485. But since in the case no contrary agreement was made, Bertulfus is held to restore the whole price of the house sold, even if its value had been diminished, or the house itself had been deteriorated, unless Cornelius had received something from that deterioration itself. C. I. 1486-1488. But from the case it appears that the value of the house was rather increased; in such a case Bertulfus must pay also this excess of the price of sale, although this increase of price happened independently of every act of the buyer. C. I. 1489. Likewise from the case it appears that the house was improved. Wherefore Bertulfus is held also to compensate the necessary and useful expenses made by the buyer; indeed also voluptuary expenses, if he himself was in bad faith. C. I. 1490, 1491. Moreover, he must compensate Cornelius for all fruits, if Cornelius was compelled to restore them to the owner of the thing. He must also compensate all expenses which Cornelius had to make for the contract of purchase, for sustaining the lawsuit with the owner of the thing, and any other damages which perhaps Cornelius suffered. C. I. 1486; I. M. 1131, 1133, 1137.

It will be said: 1. concerning the nature of sale and purchase; 2. concerning the just price; 3. concerning the principal species of sales and purchases.

Namely 1. concerning retrovendition; 2. concerning sale under the spear, or by bidding; 3. concerning monopoly; 4. concerning sale through brokers.

903. • Retrovendition is a contract ¹ by which the seller reserves to himself the right of redeeming his own thing, under the condition that he repair expenses, improvement, or similar things.

¹ The word retrovendition in reality of itself does not signify a contract by which something is sold or bought with a pact of reselling or redeeming, but merely signifies the act of reselling, both if this is done from a preceding pact, and if it is done with no preceding pact.

Mohatra is a species of retrovendition, or a contract by which someone sells a thing at a higher price on credit, with a pact that the buyer resell it to him at a lower price, with money counted out. - See below Q. 3.

I say I. The contract of retrovendition is wholly lawful. This is clear from Sacred Scripture, which testifies that such a pact was imposed on the Jews. Then it has nothing which contradicts natural right: for provided that a true purchase is made, and no cloaked usury intervenes, the seller is free to dispose of his own thing as he wills; nor does he inflict any injury on the buyer, since the latter freely agrees concerning retrovendition and does not otherwise suffer damage in this. - St. Lig. n. 812 and all others.

I say II. The conditions required for this are 1. that the price be diminished according to the estimation of the burden which is imposed on the buyer; 2. that there not be a pact concerning retrovendition to be made at a higher or lower price: a pact is lawful that it be resold at the same price, although the thing increases in price; 3. that it not be exacted by pact that the risk of the thing sold fall to the damage of the seller, since of itself that pertains to the buyer; unless, however, the price is increased according to the estimation of the risk; 4. that the thing be resold as it is handed over, vacant or with fruits; add from Gallican law, that it not be done beyond five years. - Civil Code 1660.

904. Questions. - Q. 1. By how much must the price decrease in a contract of retrovendition?

Resp. A precise rule cannot be determined, but the decision for the most part depends on various circumstances; hence authors disagree on this: for some say that the price decreases up to the fourth part, others up to the third, others better to the judgment of prudent men. - See St. Lig. n. 812.

905. • Q. 2. Whether a pact of redeeming the thing at the judgment of the buyer is lawful?

Resp. Affirmatively, more probably, provided there is a true intention of buying and selling, and the buyer pays a greater price according to the estimation of that burden, and the seller is not obliged to redeem at a price greater than he received. - St. Lig. ibid. - Lugo, D. 26, n. 200.

906. • Q. 3. What must be thought concerning mohatra?

Resp. It is a contract usurious per se, and therefore illicit and unjust. Hence it was proscribed by Innocent XI in the condemnation of prop. 40, which lies thus: The contract mohatra is lawful, even with respect to the same person, and with a contract of retrovendition previously entered into with the intention of gain. But the reason for the condemnation is that in that contract cloaked usury lies hidden; but if the thing is resold without any previous pact, even at the lowest price, to the same seller, it is not illicit per se.

Yet that contract is not to be condemned if the profit received from it does not exceed the legal rate for a mutuum, because then it would fall back into a legitimate mutuum ². - See Cases, n. 945.

² Elsewhere we have already warned that the word mutuum is used here in an abusive or broader sense; for otherwise, although perhaps it would be employed among the ancient Roman jurists, certainly in the ecclesiastical sense, which thereafter everywhere prevailed as the only proper one, it signifies a gratuitous contract.

A certain recent mercantile operation occurs, which is referred to retrovendition; it is called report (report). Such a manner of trading consists especially in rights, or shares (actions), to money placed with mercantile companies, being sold and bought again. That kind of commerce has not yet been weighed by theologians. It is also practiced here and there by upright men, nor is it apprehended by them as usurious, because it is true trade, to which laws are not opposed, indeed to which public authority gives patronage. Therefore this species of retrovendition does not seem to be condemned per se. Yet it would easily savor of the stain of usury and smell of mohatra, unless it were confined within just limits. - See Cases, n. 917.

765. Brokers are called all those who buy or sell something in the name of another; they are called by various names: courtiers, commissionnaires, commis voyageurs, representatives of commerce.

They are as it were mandataries of those in whose name they act, and therefore must fulfill the obligations of mandataries.

766. Principles. (A) Brokers must faithfully conduct the business committed to them, namely with that diligence which they are accustomed to employ in their own affairs of the same kind; for they are chosen and receive a stipend for this reason, that they may faithfully conduct the affairs of the principal. Wherefore they are held to repair damages which have been brought upon the principal, because of culpable negligence in conducting the business, according to the principles set forth above, n. 466.

767. (B) They must hand over to the principal every profit which they receive in conducting affairs of this kind; for they act in his name, and receive from him a stipend or salary, and accordingly whatever they gain by negotiating, they acquire not for themselves, but for the owner.

Nevertheless they can retain for themselves part of the profit:

(a) if there has been a special agreement, by which, e.g., five percent is granted to the brokers; (b) if by extraordinary diligence, to which by force of office they were not held, they sold more dearly or bought more cheaply than had been established beforehand by the owner; in this, however, one must beware of illusions, which are so easily conceived.

Generally it is not licit for them to buy the thing for themselves at the established price, and afterward sell the same thing to others at a greater price, retaining the excess for themselves; for the owner is rightly judged to disapprove this manner of acting, since he gives them a stipend so that they may conduct his affairs in the best way possible. Nevertheless, if in a determined case, after diligence has been employed, they could not find anyone who wished to buy the thing for more, strictly speaking they can acquire it for themselves, provided they do this sincerely, taking upon themselves the danger of the thing, and if afterward they have made profit from it, they are immune from injustice.

Brokers can retain for themselves gifts which are given to them by merchants whose shop they frequent, provided however they are not induced thereby to conduct the owner's affairs badly or less watchfully.

But if merchants diminish the common price, generally brokers must hand over that profit to the owner; for since they receive a stipend, and do not have a right to a double payment, they cannot retain for themselves profit which accrues from the negotiation itself. Yet if there is moral certainty that this diminution of price is made in favor of the brokers, it can be retained by them, especially where custom is in force.

768. (C) The same must be said of servants who buy foods and other things of this kind for their masters: they can indeed receive little gifts from merchants, but generally speaking they cannot retain for themselves profit from diminution of the price (which in French is called le sou du franc); for of itself such profit accrues to the master, not to the servants, who already receive a salary. And in reality it is greatly to be feared lest merchants write down a greater price and impose it upon the masters, so that from this they may pay something to the servants, under the pretext of diminishing the price. - Nevertheless, if there is moral certainty that that diminution is truly made in favor of the servants, and not at the expense of the master, but of the merchant himself who in a particular case consents to yield part of his profit, servants licitly retain it for themselves. Moreover the same can be said if masters know this practice and tacitly approve or at least tolerate it, as a means of increasing the servants' salary. But it is to be desired that masters and servants make a clear pact concerning this, lest gradually, by these or similar less honorable means of making profit, the sense of natural equity be diminished.

2. On Sale By Auction (vente aux encheres).

769. (A) Notion. Sale by auction, which is also called auction, licitation (vente a l'encan, auction sale, Versteigerung) is that by which the thing to be sold is proclaimed through an auctioneer before several bidders, and adjudicated to the one offering the greater price. This indeed can be voluntary or judicial,¹ according as it is done spontaneously by the owner, or established by law, e.g., for paying debts.

¹ As regards judicial auction, cf. Code de procedure, art. 702-717; Cod. pen., art. 412.

770. (B) Principle. In a sale of this kind, the just price is judged not from common estimation, but from honest contest among the bidders; for here the matter concerns an aleatory contract, in which the one selling and the one buying commit themselves to equal danger of gain or loss; and accordingly, provided fraud is absent from each side, the price will be legitimate.

771. (C) Practical conclusions. Auction can be made in a twofold way: -

(a) In a fully aleatory manner, when namely the seller expressly or tacitly establishes that the price is to be determined by the bidding alone of buyers, without any intervention, and that the thing is not to be withdrawn, but handed over to the one offering more. Then it is not licit for him to send fictitious bidders, who, without the intention of buying, increase the price of the thing; and, even if a price below the common one is offered, he is held to yield the thing. On the other hand, buyers must not by fear, fraud, in one word, by illegitimate means, impede others from offering more, nor more probably make a pact about not bidding beyond such a price, or as regards such a thing; for otherwise they act unjustly toward the seller, who is deprived of greater profit, and toward the bidders, who are deprived of the hope of acquiring the thing. Nevertheless they do not commit injustice if only by persuasion or prayers they deter others from bidding.

772. (b) In the common manner, or not fully aleatory, when the seller explicitly or implicitly reserves to himself the right of increasing the price through himself or through others, and of retaining the thing for himself if no one offers a greater price; this indeed today often occurs. In this case, on the one hand, the seller can consult for himself by employing false bidders and by withdrawing the thing if too low a price is offered. On the other hand, buyers can protect their rights by making a pact together about not bidding beyond such a determined price; yet they cannot by force, fear, or fraud turn away other buyers from bidding, since these means are unjust.

773. N. B. (a) In either case, auctioneers wound justice if by unjust means they bring damage upon the seller or upon certain buyers: e.g., by holding the auction at a time when they foresee that there will be few bidders, by adjudicating the thing sooner or later, so that they may favor friends.

(b) The seller furnishes security as regards eviction of the thing, but not as regards vices, even redhibitory ones, unless it has been otherwise established by law or pact.

3. On Monopolies.

774. (A) Preliminary notions. Monopolies are of different kinds, especially legal and private. (a) A legal monopoly is the exclusive power of selling certain merchandise, granted to one or a few by public authority.¹ No one doubts that this is legitimate, provided it is contained within certain limits; for it is nothing other than one of the means by which the State can procure for itself the money necessary for managing public affairs well; wherefore even if the price is much greater than the common price, injustice is not committed, provided the money procured in this way is employed for promoting the common good, and besides does not exceed the just limits of taxation.

¹ Not a few theologians describe here another legal monopoly, namely the privilege granted to authors and inventors of selling books or new inventions exclusively; concerning this it was said above, n. 42.

775. (b) A private monopoly exists when a few men by various means bring it about that they alone sell a certain kind of merchandise at a price pleasing to themselves, or make a pact with other sellers concerning a certain payment not to be sold below such a price; for thus the natural competition of merchants is impeded, and prices are determined according to the choice of a few.

Sometimes that pact tends only to correct the excess of competition; nevertheless sometimes it is entered so that a price greater than what is fair may be imposed upon buyers. Monopolies of this kind are instituted in various ways; sometimes various sellers or societies of sellers commit the whole administration of the matter to a few men, who can establish according to their choice all things pertaining to the production and sale of the thing: then what they call a trust is instituted; - at other times, they make a pact only about limiting the production or sale of some merchandise, and as regards other things they retain their liberty; this they call a cartell; - sometimes by common counsel they buy very great quantities of some merchandise, so that they can increase their price and receive very great profit therefrom: this indeed is called a ring or corner.²

² On the notion, advantages, and disadvantages of pacts of this kind, cf. Gunton, Trusts and the Public, New York, 1899; Ely, Monopolies and Trusts, New York, 1900; Jenks, The Trusts Problem, New York, 1900; Nettleton, Trust or Competition?, Chicago, 1900; de Rousiers, Les Industries monopolisees aux Etats-Unis, Paris, 1900; id., Les syndicats industriels de producteurs, en France et a l'etranger, Paris, 1901; Pohle, Die Kartelle der gewerblichen Unternehmer, Leipzig, 1898; Grunzel, Uber Kartelle, Leipzig, 1902; Sayous, La crise allemande de 1900-1902, Paris, 1903; Dolleans, De l'accaparement, Paris, 1902; Martin Saint-Leon, Cartells et Trusts, 1903, where all the other works are compendiously contracted.

Societies which are called trusts have been instituted in Great Britain and especially in the United States of America; others, which are named cartells, are in force in Germany, France, and other regions; rings and corners are commonly used among various nations by speculators.

776. (B) Principles. (a) Monopolies which are instituted for this end, that they may bring a remedy to the excesses of unbridled competition, and pursue this end only by legitimate means, and besides do not exceed the just price, are not illicit of themselves, but must be circumscribed by certain limits, lest they abuse their power to the detriment of citizens and of the republic.

1. They are indeed not illicit of themselves; for they pursue an honorable end by just means; for competition is as it were a blind force which of itself can produce good or bad effects; if it is in no way regulated, it tends to this, that it depresses the prices of things and the wages of workers in such a way that the latter can scarcely obtain daily sustenance; therefore it is expedient that, for restraining these abuses, some pact intervene among merchants of not selling below a certain price. Therefore nothing prohibits such a pact from being entered among various industrial and commercial societies, and honorable means from being employed so that, insofar as it can be done, other merchants do not sell below a certain price, provided this is held as fair by upright and skilled men, all circumstances being considered.

In reality, by a pact of this kind entered among various societies, the expenses necessary for the production and distribution of things can be greatly diminished, whether by the use of more perfect machines, or by a better division of labor; likewise many damages necessarily arising from unlimited competition can be avoided; and thus the condition of masters and workers is made more secure.¹

¹ Cf. Martin Saint-Leon, op. cit., p. 130-178; Gunton, op. cit., p. 213-238; Nettleton, op. cit., p. 15-42.

2. But they must be circumscribed by certain limits; for since the activity of man is finite, associations which seek too great an amplitude soon obtain an unhappy outcome, as is established from those things which recently happened in America; - moreover, if their authority increases too much, and all competition becomes impossible, the prices of things are increased beyond what is fair, because at the same time the accursed hunger for gold increases;² - likewise it is greatly to be feared lest they corrupt officials, magistrates, and other public men with money, and by unjust means obtain laws or judicial sentences harmful to the public good.¹

² Mart. Saint-Leon, p. 148-163; Jenks, op. cit., chap. VIII.

¹ Martin Saint-Leon, op. cit., p. 187-205; Nettleton, p. 175-193.

777. (b) Those monopolies are unjust which are instituted for this end, that, competition having been utterly destroyed, prices may be imposed upon buyers according to the nod of sellers, or which use unjust means for overcoming other sellers. The reason is that in the former case damage is unjustly brought upon buyers, in the latter case upon other sellers.

Now not rarely unjust means are used against sellers who do not wish to adhere to the monopoly, e.g., by selling merchandise at a cheaper price in that city in which free sellers remain, so that these may be compelled to desert business, - by obtaining from administrators of railroads the faculty of transporting merchandise at a lower price (in English, discriminating rates), - by corrupting the servants (employes) of other sellers so that these may deceive their own masters.²

² M. Saint-Leon, p. 134-143; Industrial Commission on Trusts, t. I, pp. 20, 27, 277, 356, 772-774 and passim elsewhere; Nettleton, p. 204-206.

Whence in practice monopolies are full of dangers, unless they are restrained by fair laws, and their manner of acting is diligently inspected by upright officials.

3. Buying and selling (emptio et venditio) is a bilateral onerous contract by which one party (the seller—venditor) agrees to interchange with the other (the buyer—emptor) the ownership of an article or commodity for a consideration called price.

There is an important distinction between a contract to sell in the future and a present sale. The first is called an executory, the second an executed sale. If the goods are transferred, there is an executed sale, even though the price is not paid at the same time. But if the price is paid, and the goods do not pass, the transaction is an executory sale. Both kinds of sale may be by deed or sealed contract as well as by parol or orally.¹⁸

¹⁸ Gury, Comp. Theol. Mor., Vol. I, n. 832: “A contract of sale and purchase is defined as: the exchange of a price for merchandise or vice versa, or an onerous contract of giving a determined and just price for merchandise or vice versa.”—A. S. Bolles, Putnam’s Handy Law Book, N. Y. 1921, p. 227.

The commodity sold may be either real property or "goods," which latter term includes all personal chattels other than things in action and money.

A sales contract may be absolute or conditional.

Under the moral law of nature buyer and seller may agree between themselves that the subject-matter of the contract with all its fruits and risks should be transferred at once from the one to the other. Under the existing civil laws the right of ownership is usually not transferred until the commodity in question has actually changed hands and the contract price has been paid or at least guaranteed.

The capacity to buy and sell is regulated by civil law. Under American civil law a minor may disaffirm his contracts by any act clearly showing this intent.

The price may be fixed by the contract itself or in such other manner as the parties may agree. When it is not determined in the sales act, the buyer must pay a reasonable price (v. infra, p. 279).

After a contract of this kind has been duly made, neither party can withdraw from the obligations assumed therein without the consent of the other.

To be morally licit and valid a contract of sale or purchase must comply with the following conditions: a) The commodity which forms the subject-matter of the contract must be the property of the seller, because no one can dispose of what does not belong to him. Secondly, there must be no essential error in regard to the commodity sold and purchased, and hence the seller is bound in justice to inform the buyer, even if the latter makes no inquiry, of any hidden substantial defects and, upon inquiry, also of such non-essential defects as the buyer could himself discover.¹⁹

¹⁹ Cfr. St. Thomas, Summa Theologica, 2a 2ae, qu. 77, art. 3.—Under the American civil law, “when there is . . . a sale of goods by description, there is an implied warranty that they shall correspond with the description; and if the contract of sale is by sample, as well as by description, it is not sufficient that the bulk of the goods correspond with the sample, if these do not also correspond with the description. The Sales Act contains elaborate provisions relating to implied warranties of the quality of things sold. There is no implied warranty of the quality or fitness of goods for any particular purpose unless the buyer makes known to the seller the purpose for which they are required, and he also relies on the seller’s judgment of their fitness for the use he intends to make of them. Again, if the buyer has examined the goods, there is no implied warranty of the defects which such an examination ought to have revealed. An implied warranty as to the quality or fitness for a particular purpose may also be annexed by the usage of trade. There is an implied warranty that the bulk shall correspond with the sample in quality, and that the buyer shall have a reasonable opportunity of comparing the bulk with the sample.” (A. S. Bolles, Putnam’s Handy Law Book for the Layman, N. Y. 1921, 232 sq.)

Essential defects are such as affect the substance of a thing in itself or in relation to the known object for which the buyer desires to purchase it, or, in other words, such as alter the nature of an object or render it noxious or useless. Accidental defects, if plainly apparent, need not be mentioned, provided they were taken into consideration when fixing the price. If, however, the buyer is exceptionally ignorant (valde rudis), manifest deficiencies, too, should be called to his attention.²⁰ Deception entails the duty of restitution on the part of the seller,²¹ and also on the part of the buyer if he takes advantage of the seller’s ignorance to acquire a commodity at a lower price than that which the seller could have obtained if he had not been in error. b) The price must be reasonable (pretium iustum), i. e., equivalent to the value of the thing sold. Therefore, the seller is bound not to go beyond what the law calls a reasonable price.

²⁰ Gury, Comp. Theol. Mor., Vol. I, n. 833: “It is asked whether the seller is bound to reveal defects in the thing. Answer: (1) The seller, even if not questioned, is bound to disclose all substantial defects of the thing, both in itself and in relation to the buyer’s known purpose, or all those that make the thing different or render it harmful or notably useless; otherwise he is bound with respect to the price. (2) When questioned, the seller is bound to disclose all hidden defects, even if they would not render the thing harmful or useless; otherwise he would commit fraud. Consequently, if the fraud was truly the cause of the purchase, the contract can be rescinded. But if the fraud was merely incidental, so that the buyer, knowing the defect, would still have bought, though not for so much, the seller must restore only the amount by which the buyer would have paid less, because otherwise scarcely any sale could take place. But if the seller is not questioned and the hidden defect does not render the thing useless, he must reduce the price in proportion to the defect. The reason is that otherwise the thing would be sold for more than it is worth. (3) The seller, even if questioned, is not per se bound to point out accidental defects that are of themselves manifest, provided that he reduces the price proportionately to the defect. The reason is that then no injustice is done to the buyer, either on account of the price, which is reduced, or on account of the defect; for if the buyer did not see it, he must impute that to himself. Except, however, if the buyer is very ignorant, because with respect to him the defect is considered hidden.”

²¹ Gury, l. c., n. 834: “It is asked whether a seller is bound for all losses following from a defect in the thing sold. Answer: He is bound only for foreseeable losses, because he could not assume an obligation regarding those which he did not foresee even in a general way.”

The price or value of an object is either legal (pretium legale sive legitimum), i. e., fixed by law or public authority, or natural (pretium naturale sive vulgare), i. e., market price or value, determined by the common judgment or the estimation of those who are best acquainted with all the factors that determine social value in that particular case, or a fancy price (“price of affection,” as the theologians call it), which is often paid willingly for rare or single objects for which there is no market price, e. g., a first folio of Shakespeare’s dramas or a painting by a great master.

Since the judgments of men concerning the value of an object differ greatly, and the market price is subject to constant fluctuations, the so-called natural or just price of a commodity is distinguished into the highest (pretium summum vel rigorosum), the lowest (pretium infimum seu pium), and the mean or just price (pretium medium sive moderatum). The highest is that above which the commodity in question is not commonly sold; the lowest is that below which it is not usually sold; and the mean is between the two. Justice will be observed if the price at which a thing is sold is not above the highest nor below the lowest price at which the thing sells at the time and in the place in question.²² Hence the following rules: α) The legal price is to be regarded as just and to be observed by all; β) Where no legal price has been fixed, the common price may be considered just, at least for such objects as have a market price; γ) As a rule no commodity should be bought below the lowest or sold above the highest price.²³

²² Slater, A Manual of Moral Theology, I, 524.—Gury, Comp. Theol. Mor., Vol. I, n. 840: “A just price is twofold: (1) legal, which is determined by law; (2) natural or common, which corresponds to the value of the thing according to the common estimation of men. The natural price, however, is: (1) the highest, above which a thing is not usually valued; (2) the lowest, below which a thing is not generally valued; (3) the mean, which lies between the two.”—Cfr. J. Biederlack, S.J., Die soziale Frage, 7th ed., pp. 144 sqq.—Under the American civil law, a reasonable price is “generally the market price at the time and place fixed by the contract or by law for delivering the goods, but not always. Under unusual conditions the market price does not furnish the only test. Said the court in one of these cases: a reasonable price may or may not agree with the current price of the commodity at the precise time of making it. The current price of the day may be highly unreasonable from accidental circumstances, by the action of the seller himself in purposely keeping back the supply.” (A. S. Bolles, Putnam’s Handy Law Book for the Layman, p. 231).—J. Kelleher, “Market Prices,” in the Irish Theological Quarterly, Vol. X (1916), nos. 38, 39, 40.

²³ Gury, Comp. Theol. Mor., I, n. 841: “The legal price, or that established by civil authority, must be regarded as adequate to the value of the thing and therefore observed under obligation of restitution. The reason is that it belongs to civil authority to determine whatever pertains to public commerce, since it can make laws for the common good. In the absence of a legal price, only that price is to be regarded as just which is determined as such by common estimation, if the matter concerns merchandise that is valued among the people; for the adequate price of such things is derived from their usefulness for common uses. Moreover, the appraisal of such usefulness cannot be made better,” than by common estimation. But if things do not have a common valuation, as in the case of gems, valuable paintings, and so forth, they are more probably to be valued according to the judgment of experts in this matter, with attention to the circumstances and regard for the thing’s novelty, antiquity, rarity, and so forth. The reason is that they are regarded as competent judges in these matters, just as the general public is in ordinary matters. The contrary opinion nevertheless appears probable, because in that case the just price seems to be the one upon which the contracting parties agree. . . . In practice those are not to be disturbed who, in good faith and freely, agree at their own discretion in such matters. A fortiori, that price upon which both parties agree is to be regarded as just if the price is wholly unknown, because then each party is exposed to the risk.

δ) Fancy prices may be foolish, but they are not unjust, unless the buyer exploits the necessity of the seller.²⁴

²⁴ Ibid., n. 842: “It is asked whether a seller may sell a thing at a higher price because of the special affection he feels for it, or because of the advantage he derives from it. Answer: To the first: affirmative; the reason is that the owner’s affection for his thing is truly capable of valuation in money, since deprivation of the thing is a greater loss for him. To the second: affirmative, even more strongly, as is clear; for deprivation of a special advantage makes the thing much more valuable to the seller, and it is equitable that he increase the price in proportion to the greater loss he suffers.”—Cfr. M. Cronin, The Science of Ethics, Vol. II, pp. 316 sqq.—D. Barry, “Special Knowledge and the Just Price,” Irish Theol. Quarterly, Vol. X (1915), No. 37.

Special kinds of sale contracts are those known as resale (retrovenditio), sale by auction (venditio sub hasta sive licitatio), monopoly (monopolium), and brokerage (venditio per proxenetas).

(1) Retrovenditio is a contract in which the seller reserves to himself the right to purchase the commodity which he sells on condition that he refunds to the buyer all his expenses and pays him for any increase in value. This is permitted under the following conditions: (α) that the price be reduced in proportion to the burden which is imposed upon the buyer; (β) that the price of repurchase be the same; (γ) that the buyer assume all ordinary risks unless the price be made so as to cover them; (δ) that the subject-matter of the contract be resold in the same condition in which it was sold, either with or without the accruing fruits.²⁵

²⁵ Gury, Comp. Theol. Mor., I, n. 849: “Resale is a contract by which the seller reserves for himself the right to redeem his property, on condition that he reimburse expenses, improvements, or similar outlays. The conditions required for this are: 1. That the price be reduced according to the estimated burden imposed upon the buyer; 2. That there be no agreement for resale at a higher or lower price; an agreement that it be resold at the same price is lawful, even if the thing increases in price; 3. That it not be imposed that the risk of the thing sold fall to the seller’s loss, since that risk of itself belongs to the buyer, unless the price is increased according to the estimated risk; 4. That the thing be resold as it was delivered, unencumbered or with its fruits.”

The so-called contractus mohatra, by which the buyer was compelled to resell to the seller immediately at a lower cash price a commodity which he had purchased from him at a higher price or on credit, this higher sum to be considered the original loan or sum owed, was condemned as “veiled usury” by Innocent XI.²⁶

²⁶ For instance: You need money and ask me for a loan (mutuum), for which I should not (in those days) have been allowed to charge interest. To circumvent the law I sell you a horse for 100 dollars, on credit, with the understanding that you must resell it to me at once for 80 dollars cash. Thus you receive 80 dollars cash, but you owe me 100 dollars and I am 20 dollars to the good. Do not money-sharks practice similar tactics to-day in loan transaction?—Prop. damn. sub Innoc. XI, n. 40: “A mohatra contract is lawful, even with respect to the same person, and with a contract of resale previously entered into with the intention of profit.” (Denzinger-Bannwart, n. 1190).—Cfr. Gury, op. cit., I, n. 850; Göpfert, Moraltheologie, II, p. 181; P. Cleary, The Church and Usury, Dublin 1914, p. 13.

(2) An auction is a contract by which one party binds himself to transfer and the other to acquire the ownership of some property, whether real or personal, at the highest price to be got at a public sale. There are various methods by which such sales are conducted, and descriptions of the property to be sold and the conditions of sale are usually notified to the public by printed catalogues or circulars. The bidding proceeds in an orderly manner, each bid being in the nature of an offer, which may be revoked until the auctioneer signifies his acceptance by the fall of his hammer or in any other customary way. By this a contract is concluded with the last bidder and the property becomes his.²⁷

²⁷ Slater, A Manual of Moral Theol., Vol. I, p. 533.

Auctions may be forced or voluntary. A forced auction is one by which property is sold by public authority, as in the case of a bankrupt merchant to satisfy his creditors. A voluntary auction is one held by the owner of his own accord, either in person or through an authorized representative. The owner may request his friends to bid for the goods put up at auction in order that the latter be not sold too cheaply, to his own detriment or that of his creditors, but he is not permitted to run up the price by means of fictitious bidders (licitatores ficti) because this would involve an injustice to the bona fide bidders. Similarly, the bidders present at an auction may not conspire together to make inadequate bids, or to use illegitimate means (intimidation, fraud, or violence) to hinder others from bidding.²⁸

²⁸ Ibid.—Cfr. St. Alphonsus, Theol. Mor., l. III, n. 808 (ed. Gaudé, I, nn. 851–854); Göpfert, Moraltheol., Vol. II, 6th ed., pp. 192 sqq.—An auctioneer, under our civil law, is primarily the owner’s agent only to the moment when he accepts the purchaser’s bid and knocks down the property to him. Authority may be conferred on an auctioneer in the same way as on any other agent for the sale of similar property, verbally or in writing. Authority to sell property does not of itself imply authority to sell it at auction. If goods are sent to an auction room to be disposed of, this is deemed sufficient evidence of authority to sell them by auction and to protect whoever buys them. The seller is not bound by any terms stated by the auctioneer differing from those given to him by the owner. If the owner has imposed no terms on him, he has the implied authority usually existing in such cases. An auctioneer cannot, consistently with his duty, refuse to accept bids from anyone, unless the bidder is irresponsible, or unwilling to comply with the terms of the sale. He is justified in rejecting the bids of insane persons, minors, drunken persons, trustees of the property, and, perhaps, in some cases, of married women. It is impossible with good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction. The auctioneer has no authority to warrant the property sold unless such authority has expressly been given to him. He must use ordinary and reasonable care in keeping the goods entrusted to him for sale, but is not responsible for their safety. (A. S. Bolles, Putnam’s Handy Law Book, pp. 16 sqq.)

The auction price of an article is not the same as the ordinary buying price, which latter is supposed to represent the real value of the article. The auction price may fall far below the infimum pretium or rise far above the summum pretium. The just auction price is determined by the highest bid, whatever that may be. The element of equality required for all just contracts is provided in the case of auction sales in the equal chances afforded to seller and buyer, of profit and of loss. On the side of the buyer, as Fr. Cronin says, there is the chance of his succeeding in knocking out all other bidders; in favor of the seller there is the equal chance of each bidder being knocked out by the rest.²⁹

²⁹ Cronin, The Science of Ethics, Vol. II, p. 320 sq.

(3) A monopoly (from the Greek μονοπωλία, single or sole selling), is the exclusive right or power secured to one or more persons, to sell some commodity or to carry on some branch of trade or manufacture. A monopoly is permissible if it is granted by law for the common good. Thus in some countries the government controls the sale of salt or tobacco. This is called a legal monopoly (monopolium legale seu legitimum). A legal monopoly may be private, namely, if it is granted by law to private persons, such as inventors or authors (monopolium privatum). This, too, is licit, provided it does not result in an undue raise of prices or in what has become known since the World War as “profiteering,” namely, buying up the necessaries of life with a view to reselling them at enormous profits.

“A natural monopoly arises from one or a few who band together and who are the owners of the sole source of supply of some commodity. . . . A natural monopoly . . . is . . . lawful, but if the commodity or service which is thus monopolized is necessary or very useful for the common good, natural equity prescribes that the price demanded should be fair and reasonable, even if it be not regulated by positive law. If the subject-matter of the monopoly belongs to the class of nonnecessaries and luxuries, as for example, a mine of diamonds or rubies, of special quality, it cannot be said that the price is fixed and determined by natural conditions, and the owner will be justified in taking any price that he can get without fraud or misrepresentation. Even capitalistic monopolies of commodities or services which are necessary or very useful to the community are not morally wrong if the prices charged are fair and reasonable, and if there is nothing reprehensible in the method of conducting business. The public may derive considerable advantages from these monopolies. They are capable of effecting great savings in the costs of production, advertising, distribution, and general management, and they may secure a large return on their capital and at the same time sell cheaply to consumers. They obviate, too, the wastes and the recurring depressions in trade which follow from unlimited competition. Monopolies, however, are morally wrong when the prices demanded for necessary or useful articles of consumption are excessive, or when the methods of business are unjust, uncharitable, or generally unlawful. The prices will be excessive when much more than a fair return for the capital employed is obtained, after all the costs of production and distribution have been defrayed, and when as a natural consequence they are higher than would rule if there were no monopoly. When means are used to crush rivals in order to secure a monopoly, when bribery of public officials is practiced to obtain from government specially favorable laws or treatment, when discriminating rates are obtained from railways and other companies, when workmen are tyrannically and unjustly treated, when prices of raw material are unduly depressed and producers are robbed of a fair compensation for their toil and trouble, and in general when fraud or force is used to accomplish the end in view [viz., excessive profits] the methods of business are immoral and monopolies which employ such methods are to be condemned. If prices demanded by a monopoly are in the estimation of prudent men higher than are fair and reasonable, injustice is committed, and there is consequently an obligation to make restitution to the buyers who have been robbed [or to the community]. If the prices charged are not altogether unfair and unreasonable, but high, and above what in the circumstances would be considered moderate, there will be a sin committed against charity, in that private advantage has been unduly pursued to the detriment of the people, who have been compelled to pay higher prices for the enrichment of the monopolists. “From what has been said it is clear that what are called ‘rings’ and ‘corners’ in wheat, cotton, and other such commodities are morally wrong, in that they cause the financial ruin of many people, and produce wide distress and instability of trade. Trusts, too, and combinations in trade are full of danger for the community. They wield immense power, and the temptations to abuse it, especially as a company has no conscience, as the saying is, are too great for the common run of business men. It is well that the government should have the right of examining and inspecting the affairs of such bodies and of applying the necessary remedies in case of abuse.”³⁰

³⁰ Slater, A Manual of Moral Theol., Vol. I, pp. 535 sqq.—In the United States the only monopolies that the laws look on with favor consist of the post office, which is a government monopoly, and the rights granted to individuals under the patent and copyright laws. Monopolies commonly known as trusts are regarded as odious, and various States and the Federal Congress have enacted laws making them illegal. (Cfr. Cyclopedia Americana, Vol. X, s. v. “Monopoly,” and Vol. XV, s. v. “Trusts”).—Cfr. J. A. Ryan, “The Moral Aspect of Monopoly,” in the Irish Theological Quarterly, Vol. III (1908), No. 11.—St. Alphonsus, Theol. Mor., l. III, nn. 815–817.—J. P. Gury, Comp. Theol. Mor., I, nn. 855–857.—M. Cronin, The Science of Ethics, Vol. II, pp. 325 sqq.

(4) We come now to brokerage. A broker is a person who makes it his business to negotiate sales or contracts as an agent, or to make sales and purchases for a commission (venditio per proxenetas). A broker is ordinarily a mere agent, and his sales are private.

There are many kinds of brokers: bill and note brokers, stock brokers, shipping brokers, insurance brokers, real estate brokers, pawn brokers, merchandise brokers, etc. A broker may not appropriate to himself a larger sum than the commission agreed upon between him and his client, or fixed by law, unless indeed he has added considerably to the value of a commodity by extraordinary diligence or with the permission of the owner.³¹

³¹ A. S. Bolles, Putnam’s Handy Law Book, pp. 45–47; Gury, Comp. Theol. Mor., Vol. I, n. 858 sq.; Göpfert, Moraltheol., Vol. II, 6th ed., pp. 191 sq.

Not a few brokers nowadays deal in stocks and bonds and other valuable papers, buying and selling these at a commission, either in the open market or to private customers. If no illicit means (such as the circulation of fictitious reports, the use of illegitimately discovered secrets, etc.) are employed in speculations of this kind, they cannot in themselves be condemned as immoral. Nay, it must even be admitted that, to a certain extent, speculation in stocks and bonds is useful, inasmuch, namely, as it facilitates the purchase of valuable papers for the investment of capital and their sale for the provision of ready cash. It also aids in the placing of government bonds. The great evil of the stock exchange is that it easily advances speculation and gambling beyond all due limits and favors fraudulent undertakings. In the nature of the case, lying and fraud are often applied as means in speculation. The so-called financial crises are for the most part artificial “bull and bear periods” in which the speculators by every imaginable and often dishonest means endeavor to raise or depress the price of certain stocks and bonds.

(5) In this connection a word concerning dealings in “options” and “futures” may not be out of place. One is said to deal in “futures” when the goods contracted for are not in his possession, nay do not even belong to him at the time the sales contract is made. If the terms of the contract leave to the seller the choice either to deliver the stipulated goods at a fixed price or to pay the difference between the price agreed upon and the actual market price when the term of the contract arrives, the contract is called an “option.”

“From such an ‘option’ contract to mere ‘time bargains’ or ‘difference transactions’ or ‘margin’ is but a step. In these transactions real delivery of goods to the buyer is not contemplated by either party; they merely make use of the market price of wheat, or cotton, or stocks and shares, or bacon, or other commodity, as matter for wager. . . . It is a subject of hot debate whether such gambling has a good or bad effect on genuine trade. There is, of course, a great increase of business for commission houses, brokers, and agents generally resulting from fictitious bargains, and it is to be expected that such classes will be loud in defense of time bargains, or ‘options’ and ‘futures,’ as they are often indifferently and loosely called. On the other hand, producers of foodstuffs and manufacturers of raw material into cotton goods seem generally persuaded that their trade is seriously injured by gambling transactions on ‘change. Within the last few years several governments have given serious attention to the problem.”

From the moral point of view dealings in futures must be judged as bets or wagers, for a speculative contract in “futures” is to all intents and purposes nothing but a wager or bet concerning a future and uncertain event. The question whether it is lawful or not depends on the broader question concerning the lawfulness of betting.

Applying the Catholic moral doctrine on betting to the question before us, Fr. Slater, whom we have just quoted, says: “We are compelled to admit that a deal in futures in itself is not wrong if it is accompanied by the conditions laid down [i. e., that the money risked belongs to him who risks it; that the transaction is free from fraud and deceit; and that, finally, the chances are fairly equal on both sides]; but that it is wrong if any of these conditions are wanting. However, even though the requisite conditions may be present, it is a dangerous pastime, and should be discouraged, like any other form of gambling, in the interests of public and private morality.” Passing from the abstract to the concrete, namely, to the form in which betting is actually carried on in the exchanges of the great commercial centres of the world, the same eminent English moralist, after carefully weighing the arguments often adduced in favor of the practice, says: “On the other hand producers and consumers alike seem generally to have made up their minds that gambling in futures has a disastrous effect on trade. Competitors are almost indefinitely multiplied; the area of competition is vastly enlarged; and producers of wheat, for example, in countries where land and labor are dear, where taxes are burdensome and skies unpropitious, find themselves forced to compete with others who live under opposite conditions. Tariffs may remedy the evil to a certain extent, as far as effective contracts which contemplate actual delivery are concerned, but they cannot shut out the subtle influence of gambling transactions. In addition to this, gambling in futures falsifies prices. In a healthy condition of the market, the price of an article will depend on the costs of production and the law of supply and demand. As long as these factors dominate the situation, producer and consumer can satisfy themselves that they have full value for their goods or for their money. But when natural prices are interfered with from without by speculators who do not contemplate effective delivery of commodities, and who are only interested in differences, effective dealers can have no security that they get full value in their transactions. Prices are falsified and markets are reduced to an unnatural condition. . . . There are also some more general considerations which cannot be overlooked by the moralist. Betting, as we have seen, is not in itself unlawful, provided it is accompanied and safeguarded by certain conditions. When, however, it becomes a habit, and degenerates into gambling, our verdict in ordinary cases must be different. . . . If it becomes a passion, if the gambler seeks to make it a substitute for honest toil, and strives to make it support him or bring him wealth, serious harm has already been done. The gambler produces nothing; he adds nothing to the wealth of the community; he soon learns to shun honest work; he becomes a parasite who preys on society, and eventually brings ruin on others as well as on himself. So that dealing in differences, even if regarded merely as a form of gambling and speculation, must fall under the censure of the moralist. . . . But it would be a comparatively small matter if the evil connected with gambling in futures were confined to the parties immediately concerned in the transaction. Unfortunately, too often many good and innocent people, who never dream of speculating on ’change, suffer loss from the operations conducted there. A rise or fall in the price of wheat means for the operator the winning or losing of his bet, but for many a farmer a fall in the price means that he is robbed by the ‘bears’ of the fruit of his toil; it may mean the bankruptcy and ruin of many a respectable family. On the other hand, a rise in prices means an additional hardship on the poor, a greater difficulty in making ends meet, a robbing of many a poor family of the staff of life. On many grounds, therefore, the verdict of the moral theologian on the question of the lawfulness of dealing in futures must be that in practice the transaction is immoral and wrong.”³²

³² T. Slater, S.J., Questions of Moral Theology, N.Y. 1915, Ch. IX, “Deals in Options and Futures,” pp. 145–158.

(6) Advertising, that is, the use of extraordinary means of publicity for the purpose of calling attention to certain goods or products, is not per se illicit, nay, to a certain extent at least, may be considered necessary for the ordinary conduct of business, industry, and commerce. Unfortunately the practice is only too often made a means of deceiving and cheating the public.

Göpfert lays down the following rules for keeping advertising within proper bounds: (α) The advertiser may praise the quality of his goods and call attention to their merits, provided the price he asks is not unfair; but it is a violation of charity to advertise so as to injure competing merchants. (β) It is immoral and forbidden to misrepresent the quality or value of the goods advertised, and if such misrepresentation actually results in loss to others, it entails the duty of restitution, not only to the defrauded buyers, but likewise to the competitors whose business has been damaged by such illicit means.³³

³³ Göpfert, Moraltheol., Vol. II, 7th ed., p. 187; see the same eminent author’s paper “Zur sittlichen Beurteilung des modernen Reklamewesens” in the Theologisch-praktische Quartalschrift, of Linz, 1900, pp. 593 sqq.

I. Notion. Purchase-sale is a bilateral, consensual contract, by which one party obliges himself to hand over a thing for a defined price, which the other party is bound to pay.

This definition expresses the notion common to every law. It is complete if, as in French and Italian law, the dominion itself of the thing can be transferred between the parties by consent alone; but if, as most more recent laws have it, dominion is not transferred by consent alone, there must be added: "by which one party, the seller, obliges himself to hand over the thing and to transfer it into the dominion of the other." Cf. art. 133 [printed citation; context suggests 433], Code of Germany.

II. Elements. This contract necessarily contains three things: consent, thing, price.

1. Because the contract is consensual, it is completed by consent alone. Besides, when one's own thing, determined in body, is sold, regularly, in French and Italian law, dominion is transferred by the consent itself. When the thing is defined only by kind, or law prevents dominion from being transferred by consent alone, then the effect of the contract is reduced to reciprocal obligations.

In French law, the sale of another's thing is null, since dominion cannot then be transferred. But the parties can conceive the sale otherwise, in the Roman manner, as they say; in that case a mere obligation is undertaken of bringing it about that the promised thing comes into the dominion of the buyer.

2. The seller is bound to hand over in due time the thing which he owes; if it must be sent, the expenses are of themselves imputed to the buyer. The buyer is bound to pay the price.

III. Eviction. The seller must moreover warrant against eviction, unless it has been otherwise agreed.

Eviction is had as often as the buyer is juridically disturbed from possession of the whole thing sold, or of a part of it. The seller is obligated to warrant this if the eviction has as its cause a defect of the right which the seller had to transfer, and the eviction could not be avoided, for example by warning the seller, who had a means of repelling the plaintiff, concerning the suit that had been moved.

IV. Order of execution. Which party ought first to execute the obligation, unless it has been defined by agreement, is not established. But if one party does not furnish what he owes, the other party can either withdraw from the contract or demand that damages be repaired.

V. Fortuitous case. In French and Italian law, from the perfected contract the buyer bears the fortuitous case: the thing perishes for its owner. In German law, the party whose prestation has become impossible is indeed excused, but he can no longer ask anything from the other party, unless this other was at fault. If, however, for example, compensation has been given for a thing which perished by chance, he will have to hand this over to the other party asking for it and executing his own obligation. Therefore positive laws must be consulted concerning fortuitous case.

Sum of Obligations. Concerning the thing, the seller contracts the obligation of manifesting its defects, of handing it over, and of warranting eviction.

1. From the law of nature itself he must manifest: a) substantial defects, both hidden defects and those which the buyer, from his inexperience, is perceived to be ignorant of; for error concerning these defects invalidates the contract. Substantial defects are defects which make the thing harmful or notably useless to the buyer, with attention also to the quality principally intended; b) accidental defects concerning which he is asked in general or in species. Again, understand defects which, of themselves or from the condition of the buyer, are hidden from him. Concerning the effect of such error, cf. above n. 423.

He does not have to manifest accidental faults concerning which he is not asked, provided he does not fraudulently hide those same faults, nor demand too great a price. Asked in general, he can be silent about defects of small moment, ignorance of which seems to give cause neither to the contract nor to the price. Nor must he manifest defects concerning which he has protested that he does not wish to guarantee anything; yet in our civil forum this protest effects nothing as regards hidden defects known to the seller.

From positive law, hidden redhibitory faults cannot be kept silent, or those which so diminish the utility of the thing that the buyer would not have bought it except perhaps for less. Certain laws exhibit a taxative catalogue of these faults, as regards certain animals.

2. He must hand over the thing to the buyer in due time, as we said, but, of itself, at the buyer's expenses. On account of omission or delay imputable to the seller, the buyer can recover damages and besides can either urge the execution of the agreement or seek rescission of the contract.

3. We have just treated eviction at n. 453. The parties can within certain limits increase, diminish, or even remove the obligation of warranting eviction.

Frauds and Lies. Goods of themselves must be handed over true and pure. Nevertheless it is lawful to adapt oneself to the received usages of upright men. Injury is committed: a) if adulterated things are infected with a substantial fault; b) if from the contract a special obligation of handing over a pure thing had been undertaken; c) if an unjust price is demanded. - Yet let us commend a simpler honesty with all our strength.

The customary lies or perjuries of merchants concerning the price for which they themselves procured things for themselves, or concerning proposals made to them, are not judged to have been efficaciously harmful, since little faith is given to them.

More than in quality, fraud in quantity and measure is to be condemned as injury.

But those who by arts of this kind entice buyers indirectly harm other merchants of the same things. Yet are they injurious to these? Certain persons affirm that. But since no juridical relation has intervened between them and the other merchants, we think this must be denied. It pertains to positive law to repress or restrain fraudulent competitions (concorrenza sleale, concurrence déloyale), for example by a collective action by which merchants are permitted either to denounce other deceivers of buyers to the public authority, or to act for damages before a judge.

A merchant who hands over to another a thing already assigned to someone else, or registers it in the public records under another name, commits injustice. But the buyer in good faith can use the positive law which not rarely awards dominion to him to whom the thing has been handed over or in whose name it has been inscribed.

I. The chief, indeed of itself the only, obligation of the buyer is that of paying the just price which has been agreed upon between the parties. Therefore the difficult argument concerning just price must be treated. But the things which we define here must be completed by those which will have to be added in the contract of lease-hire.

Price is nothing other than the value of a thing expressed in money.

Moreover they are accustomed to distinguish legal, common, and conventional price; to which we think there must be added the price imposed by monopoly. It seems that each must be discussed distinctly.

On Legal Price. Legal price is called that which is directly fixed by law itself. Directly, I say, because indirectly the legislator can influence the prices of things by fiscal devices: as if, after imposing a customs duty, he contains the exportation of certain things within such limits that in his own territory they are abundantly available.

In ordinary circumstances, the legislator is no longer accustomed to establish a direct price, either single, or minimum and maximum; but by law it is customary to define what several officials, for example notaries, can ask for instruments to be prepared or written; or at what price companies which operate railroads must transport persons or goods. Officials and companies must stand by these definitions, unless it is established that the price is unjust or that custom has derogated from it. - But from legal fixings of the prices of goods we can less absolutely and universally gather an immediate obligation of conscience. For the common persuasion concerning the mind of the legislator and concerning the equity of the valuation must be consulted. The reason for the difference between these fixings and the former is this: those who use the ministry of an official, or commit themselves or their goods to a railroad, tacitly promise the legal price and do not think of another agreement; whereas, in buying goods, private agreements are customary.

On the Expedience of Fixing by Law the Price of Goods,. in our present society, there is dispute and doubt. Perhaps it is better that the legislator use indirect means of urging equitable prices of things commonly useful, as if he commits to prudent arbiters, after stated intervals, the definition of an equitable price of foods, and by publication of the judgment directs the public conscience, by which buyers and merchants may be protected from unjust vexations.

When necessary things themselves seem about to become scarcer, so that famine is to be feared, it is also fitting that the legislator prevent those things from being bought up by a few richer persons.

II. On Common Price. Common price is accustomed to be obtained by many purchases and sales. It is governed by common valuation. This valuation not only declares what is an equitable price, but is also the proximate cause of the value of things, or of the aptitude by which, in a given society, things can commonly be exchanged with other things. Yet the valuation itself is not, at least wholly, arbitrary, but is determined by the objective utility of acquiring the thing, as this is commonly perceived.

Once the common price is known, we know the price which, justice being preserved, can be imposed even on an unwilling buyer; we know what the buyer, unless special circumstances excuse him, must pay from justice. Therefore it supplies the norm of justice to be observed in contracts. But, unlike legal price, which is usually single (although the laws themselves can establish merely a minimum and maximum account of price), common price is divided into the lowest or kindly price, the middle or moderate price, and the highest or rigorous price. These are in moral valuation, so that in common foods and necessary things, a lesser distance separates the highest price from the lowest. The valuation is considered according to the place and time where the sale is made, so that, when the place or market is changed, prices themselves can increase or decrease. Today, because of the facility of transportation, a broader region than formerly must be held as one market.

But by which price, highest, middle, or lowest, a thing is acquired is defined by private agreement, in which, provided at least justice is preserved, neither party is forbidden to consult his own utility.

Yet observe this: even within the limits of just price, he would be unjust who, by unjust means, such as by unequal weight or by spreading false reports, procured for himself the highest just price.

Moreover, the spontaneous offering of things which are not so common that they are almost continually bought and sold, and the already completed use of a thing, change that valuation. - In things not new, which chiefly draw their price from the value of the metal, for example in silver furnishings, workmanship (mano d'opera, façon) is scarcely now considered. On the contrary, because of scarcity of things or an unusual multitude of buyers, the prices of things increase. But, in a common scarcity of foods, charity will be gravely offended by those who, by increasing the prices of such things, strive to seek greater gain from another's misery. Therefore common hatred falls upon them. Indeed, when there is an abundance at a gentler price, whether, justice being preserved, such prices can be demanded for things which all need that they make those same things inaccessible to very many, can deservedly be doubted. Cf. n. 464. And they undoubtedly violate justice who, by accumulating and hiding those same things at their own place, create a false scarcity of these things, and thus deceive the common valuation itself.

Just Exceptions. 1. Things can be bought at a cheaper price without injustice: a) things which are less useful to the buyer, so that he truly buys in favor of the seller. But here beware of oppression of the poor; b) things bought together in a great quantity: the diminution of price is compensated by the advantage which is procured for the seller; c) things to be handed over at a time when they will be worth less; d) things whose price is paid before the day.

2. A greater price can be demanded by the seller: a) to whom deprivation of the thing would be peculiarly harmful or unpleasant; concerning this cause the buyer will have to be warned, lest he be deceived; b) who sells things by retail, because of greater labor, etc.; c) who, by consenting to delayed payment, indirectly lends money.

— But in the just price there are not included gifts to be bestowed on servants, unless received usages approve that they be imputed to the master; or expenses which, because of a cause peculiar to himself, the seller had to make; or the special utility of the buyer.

Here, however, distinguish fruitful utility from sterile utility. If from the thing bought the buyer seems likely to gain a great profit, then the seller can wish to be admitted as though as a partner, and to compute in the price a certain anticipated payment of the common profit. And the buyer himself is not forbidden spontaneously to offer something by title of gratitude. Besides, because of the errors of liberal economy, it happens that not a few wish to profit from the special utility of the buyer, and certain authors, such as Gousset, do not wholly disapprove this. Wherefore that it be done in this way is not to be advised, but what has been done can be tolerated.

Sale of a Thing Which Will Become Cheap. As long as the common valuation is in force, the thing preserves its value. Wherefore, without injustice, according to such valuation a thing can be sold by him who foresees or knows that it will soon become cheap. But a magistrate who knew that, on account of a prepared law, certain prices were going to be notably changed, if, concerning a matter to be covered by secrecy, he "warned a friend, would unjustly," says Lehmkuhl, I. 1328, "violate the secret." We understand this concerning an injustice such as every transgression of an office imposed by duty is. This is committed against the republic. But whether he is unjust toward other private citizens whom the information given to the friend will indirectly harm is much less certain. And it seems that he can easily be excused from fault who warned a friend worthy of mercy, whose ruin he wished to prevent.

Use of an Unjust Price. If unjust prices have been procured by the evil arts of others, one who knowingly wishes to enjoy them cannot be praised. Most condemn this as injustice. Yet some, as d'Annibale, II. 425. 29, respond more benignly. Arts of this kind are often exercised in the "titles" of banking or industrial companies. But because these things are unknown to the common people, those who buy and sell titles at the stock-exchange price commit themselves to a chance which by present-day usage is not disapproved.

Maximum Price of Necessary Things. The primordial law itself, by which private possessions are to be referred to the common good, demonstrates that foods and things commonly necessary cannot, on account of their present or foreseen scarcity, stand for sale at such a price that sellers make immoderate gains, while a multitude of men is deprived of them or reduced to destitution. Just as a certain wage is a just minimum, so, by equal reason, there is a maximum price of necessary things, established by justice itself. But this is still ignored by too many for us to be able from it to impose a debt of strict justice and restitution on those who, using no fraud or force, sold those things at the prices offered by richer persons; indeed, unless the law establishes a measure for the very abundance in which such things can be possessed by individuals, purchases by richer persons or by brokers cannot be prevented, so that the preservation of moderate prices will now profit men of modest condition very little.

III. On Conventional Price. When legal and common price are lacking, it remains that the conventional price be established by free agreement. The cases will be: a) if, conscious of their ignorance concerning the true price, both parties have wished to go, as it were, into chance; b) if a price of affection is asked, as when someone sincerely does not wish to sell the thing and must be led to consent as though by a premium; c) if there is question of a thing which, not even by the judgment of experts, obtains a common value, but is valued by uncertain fancy or affection, provided even then it remains within reasonable limits. But because, in things of pleasure, prevailing usages create true value, it happens that things which formerly were without value are now commonly valued. And one who wishes to enjoy that perfect honesty which will allow the soul to be free from every scruple will not wish to use the ignorance of the other party so that he may acquire a thing for himself at a much cheaper price, or sell it at a much greater one. Often the good faith of buyers in these matters will not have to be disturbed; nevertheless right principles should be inculcated.

IV. On Monopoly Price. 1. Notion and origin. Monopoly is had when there is, or comes to be, a sole seller of certain things, and therefore he bears the arbitrium of the price. It is of various origin and character.

Natural monopoly arises from innate qualities of a person, or also from the discovered quality of a possessed thing, which quality had long lain hidden. Not rarely gifts of talent and a fortuitous case together have been causes of an invention.

Artificial monopoly results either from law which has reserved certain things, whether to the fisc or to a private person, physical or moral; or from arts by which the craftsmen or merchants of the same things dominate the market, as they say, so that they compel others either to perish or to stand by the same laws.

Since free competition is more and more suppressed by agreements among producers or sellers of the same things, and true monopolies are created for establishing, according to their own utility, the quantity of things to be produced and the account of price, in truth the account of common price begins to cease.

The rules concerning monopolies must be applied. They require that the price be established which, without monopoly, would be just; or that from labor an honest gain be received, according to the state and condition of the one working. Honest is that which effects an honorable support, with a sum added for moderate advancement or progress.

For a moderate, indeed, but not immense gain is regularly offered to human labor. Wherefore immense gains are of themselves suspect of injustice unless they can be positively explained either a) by sale in another region where, on account of inequality of exchange or another cause, things are sold much more dearly; or b) by some invention by which someone can produce things at a much lower price than they are commonly produced; or c) by a special art and industry by which, for example because goods have been bought together in an accumulated way, many expenses are spared.

While some years ago producers and merchants were competing about yielding things at a cheaper price, not rarely wages below the just amount were paid to workers; but now the rights of buyers who seek things for personal use are frequently violated.

— The chief injustices today consist in various abuses of monopoly, occasion for which is given through syndicates. For: a) merchants who buy things in order to sell them off demand a price without any proportion to labor and expenses; b) an increase of wages is alleged so that prices may be increased much more. If, for example, wages are increased by 5 p. c., prices increase by 10 p. c. Yet no title of gain for the master of the business has acceded; c) by studied sales and purchases the common valuation in stock exchanges is corrupted, and it is obtained that "shares" or "obligations" of companies are valued above or below their true value; d) traders who devote themselves to lucrative trading increase the prices of things as much as they can, whereas they ought to have regard to the price which they themselves paid and to the hoped-for sale. In things whose sale is easy, indeed certain, to buyers who will pay the price shortly or immediately, gain does not seem able to surpass 10 or 12 p. c.

For legal commercial interest is not accustomed to surpass 6 p. c. But that interest reveals to us the common valuation of the fruit to be hoped for from trades, after deducting, however, the value of personal labor and of the risk assumed by the one undertaking the business. Wherefore, in a non-dangerous trade, we attribute 4 [OCR/printer uncertain: printed first digit damaged; calculation indicates 4] or 6 p. c. to labor, when we have estimated the honest gain of the trader at 10 or 12 p. c.

I. The seller can reserve to himself the faculty of redeeming the thing sold. But since this faculty (pacte de réméré) places the thing in an uncertain state, which impedes commerce, it cannot be too long-lasting.

Wherefore the French and Italian Codes permit the reservation of such a pact for only five years (Italian Code art. 1516; French, 1660); the Brazilian Code for three years (1141-1143); the Austrian for immovable things alone and for the life of the seller (1070); the German for three years for movable things, for thirty for immovable things (503); the Spanish (1508) for ten years; the Dutch for five years (1556). The Lusitanian Code does not admit the pact (1587).

II. Things Sold to Taste. When things are sold which, as wine and oil, are customarily tasted, the sale, in several laws, is not considered perfected unless the thing has been tasted and approved. Yet the buyer can renounce this faculty; he is for the most part considered to have done this if he has commanded the merchant to send the thing to him. Besides, today rather a sample is sent; if this has been approved, it will now suffice that the thing handed over agree with the sample. - Cf. the Brazilian Code, 1144-1148; French, 1587; German, 495-496; Spanish, 1453; Dutch, 1499. This presumption is not read in the Austrian and Swiss Codes, but an express agreement can be made.

III. Auction, or Sale Under the Spear,. is a species of sale by which goods are subjected to the voice of the herald and assigned to the last or first bidder: to the last, if ever greater prices are proposed; to the first bidder, if the herald, after making an estimate of the highest price, successively proposes lower prices until one person consents. Hastation can be voluntary or forced.

Of itself it bears the appearance of a certain chance or contest to be established honestly: then the price which is procured by honest arts is considered just.

But received customs today in more than one region have sufficiently adulterated that contract, so that arts less approvable in themselves are admitted; but, since they are practiced on each side, the equality of justice is restored by the compensation of those arts.

In the law which we use, in voluntary auctions redhibitory defects are warranted, and rescission on account of lesion is granted; for the seller, before the thing has been assigned, it is lawful to retain the thing for himself, if the price has displeased him; a premium is customarily promised to bidders; and it is lawful to bid without an intention of buying, provided you truly sustain the risk of acquiring the thing and can and will pay the price. - No one condemns him who merely asks another not to compete with him in some bidding. But an agreement concerning that matter is not permitted by many except among related persons. But why you injure justice by stipulating what you can honestly ask does not appear. But he who has thus kept away all buyers creates a monopoly for himself, concerning which one must speak as above. Indeed, when it is intact for the seller to keep his own thing, an agreement of this kind does not of itself offend even charity. Again, however, because auctions are accustomed to profit buyers more, and to compensate contrary devices, it seems that it can be tolerated that fictitious bidders be sent by the seller (to stimulate the true bidders) and defects be hidden. Thus Aertnys, III, 190. - Therefore the unjust arts to be mentioned here are nearly these: a) not to hand over the thing assigned, or to substitute another less good thing in place of the thing exposed; b) by fraud or violence to turn others away from bidding, or not to pay the offered price, or to bid fictitiously when you cannot or will not undergo the risk of acquiring the thing; c) on the part of the official who directs the auction, deliberately to effect this, that friends buy the thing at a cheaper price.

IV. Sale Through Brokers. A broker is one who for another undertakes the care of buying or selling a thing.

Those who habitually carry out such an office should observe the laws and the usages of upright men. Thus bankers and money-changers, to whom sometimes no better rule can be supplied except that they abstain from frauds, promote the utility of their client, and be content with a moderate fee.

He who has bought at a cheaper price, or has sold this person's thing at a dearer price than the principal had already permitted, has of himself acted for the principal, to whom therefore that gain must yield. Except if the gain is to be attributed to his special industry; if a beneficent intention can be supposed in the principal; if a small gain is judged to have been tacitly remitted; if received usage so bears, or tacit consent appears from elsewhere; if, after diligence has been applied, and no greater price has been found among others, he seriously buys the thing, and therefore at his own risk, and then, when occasion is given, sells it more dearly. This practice seems full of dangers, although it is frequent among money-changers. But if merchants remit anything from the price in view of the broker, he can retain those things for himself. This will happen to those brokers whom it is of interest to merchants to attract on account of their profession. One must answer more cautiously concerning the reduction which merchants seem to grant to servants.

Booksellers also are brokers, who receive books from authors or editors so that, without any risk of their own, they may expose them for sale and announce them in their catalogue. By a league made among themselves it happens that they promise this very slight work of theirs very dearly, so that, for example, they must return only half the price inscribed in the catalogue for individual books sold by them. Thus it happens that to the writer, who has labored more than all, the smallest part of the gain returns, and the very price of the book is notably increased. Again, a remedy seems to be sought from a society entered into among writers, which at the same time would care for the diffusion of books.

Corollaries or Scholia.

1. He who cedes to another, who is ignorant, at an ordinary price a claim, i.e., a private credit (not titles which are valued on the Exchange), whose debtor he knows is not solvent, conceals a substantial defect, so that he is unjust (Lessius, Iust. cap. 21, n. 81).

But what if by positive law, as, for example, art. 1542 of the Italian Code, 1694 of the French, he ought to answer only concerning the truth of the claim? We understand laws of this kind to have been made with this mind, that, apart from agreement, they transfer the risk to the buyer, but not that they should wish to heal the injustice of the seller who has ceded for a price a thing worthy of no price. d'Annibale, however, II, 466, would not dare "to obtrude this opinion upon anyone against the most manifest law."

2. An inventor can enjoy a legal monopoly so that he may sell his invention at a greater price than it would be estimated at of itself. For there is a just cause of fostering inventions in this way. Yet here also that saying is valid: "Nothing too much."

3. When by a great buying-up of things a private monopoly is introduced, the price indeed, with justice preserved (but not always with charity preserved), will be able to be increased, yet not beyond the highest price which agrees with the true abundance of things.

4. Likewise agreements by which sellers or craftsmen of the same merchandise agree concerning not selling merchandise or letting work below a certain price can be entirely honest, as if by this reason they procure equal conditions for themselves. But a conspiracy not to sell, below that highest price, things which many need would be opposed to charity.

Nor are contractors of public works today reprehensible of themselves who, after an agreement has been made, compare their mutual estimates among themselves so that they may yield the thing to be undertaken to one who must hand over to the others part of the greater price which he will obtain. Indeed they increase the gain from this not a little, but, provided they keep themselves within reasonable limits, the magnitude and difficulty of such works today seem to demand gains of this kind. (Thus, recently, in Holland, the public magistrate himself judged this cause.)

You ask concerning the nature and inviolability of so-called literary, industrial, artistic property, etc.

1. Laws are accustomed to concede a civil action to authors, inventors, etc., at least if they have observed certain prescriptions of the laws: against all who, without their license, have published the work in print in the same or another language, have imitated the machine and made it saleable, have performed a musical work, etc. Yet that privilege is not perpetual, but remains, for example, through the life of the author and fifty years after the death of the author. But it is accustomed to be protected by international pacts, so that also among other nations the author can impede the diffusion of his book, his machine, etc.

2. Because it consists in this, that it reserves to the author his work to be published, so-called property is not in reality anything but a certain monopoly.

But because without positive law that reservation would be entirely futile, and of itself it is impeded by the very efforts which authors make that their works may become known and be in the hands of many, we judge that their right, otherwise long unknown, is not natural, but has its source in the law itself. Although it is very agreeable to equity that the works of an author or inventor should also be recompensed by monetary reward.

3. Wherefore, beyond the positive law itself, no office of justice forbids the buyer of a book or machine from making any honest use whatever of the thing acquired.

A sufficiently common opinion holds that laws concerning property of this kind immediately bind conscience. Yet no certain reason is perceived by us why we should pronounce more severely concerning those laws than concerning others, and gather from them a greater obligation than that of permitting authors and inventors to use their right. We are confirmed by the easy efficacy of legal protection of this kind in the external forum; we are confirmed by the extension, growing day by day, of this kind of property, so that in reality it creates prohibitions that are arbitrary and inconvenient to many.

Are those very pursuits of perceiving ever greater monetary profit from things which confer upon the deserving a nobler reward of honor and glory so greatly to be praised and commended?

Nevertheless, from the natural law itself, a beautifully written work or a useful invention grants to the author an inviolable fame, which would be injured unjustly by those who, under a false name, published the work or spread abroad the invention.

Statutes of Canon Law. 1. By force of c. 1530, for alienating immovable ecclesiastical things, or movable things which can be preserved by being preserved, there is required: an estimate of the thing made in writing by upright experts; and, by force of c. 1531, § 1, the thing must not be alienated at a lower price than that which is indicated in the estimate; - 2. a just cause, i.e., urgent necessity or evident utility of the Church, or piety; - 3. the license of the legitimate Superior, without which the alienation is invalid. And when there is question of precious things, or of things which exceed the value of 30,000 lire or francs, the legitimate Superior is the Apostolic See.

Moreover, unless the circumstances suggest otherwise, the alienation should be made by public bidding, or at least made known; and the thing should be granted to him who, all things considered, has offered more; the money received from the alienation should be placed cautiously, safely, and usefully for the advantage of the Church (c. 1531, § 3).

To safeguard the utility of the church, the Code requires the special license of the local Ordinary so that immovable goods of the church can licitly be sold, or even leased, to their own administrators and to those joined to them in the first or second degree of consanguinity or affinity (1510); to eliminate simony, it forbids in the sale or exchange of sacred things that any account of consecration or blessing be had in the estimation of the price. - "Administrators can exchange titles which they call to bearer for other titles more, or at least equally, safe and fruitful, with any species of commerce or negotiation excluded, and with the consent of the Ordinary, of the diocesan Council of administration, and of others whose interest is concerned" (1539, § 2). Cf. concerning these sanctions, Epitome iuris canonici, II, n. 849-864.

The Cause of the Present Evil. "Purchase and sale seems to have been introduced for the common utility of each, namely while one needs the thing of another and conversely, as is clear through the Philosopher (Polit. l. 1, c. 6 at the beginning). But what has been introduced for common utility must not be more for the burden of one than of another." But today the immoderate hunger for gain has altogether departed from that most wise reason, and, too often, purchase-sale ends in a duel in which one party strives to conquer and oppress the other.

For this reason all things are confusedly perverted, and the very notions of just and unjust are weakened in the minds of those contracting, while common sense protests in vain, which even now marks with a certain note of infamy those who hunt easy and excessive gain.

Yet definitely to condemn someone to restitution will often be difficult: a) on account of the obscurity or complexity of things; b) on account of ignorance or common error, which permits us to leave men to their own conscience; c) on account of excuses from the necessity of conforming oneself to the general mode. Many are compelled to give their name to a syndicate and to sell goods at the price which the directors have established. Then those who were not the authors of the objectively unjust price seem able to be excused from injustice. They therefore will rather have to be stirred up to making large alms. But conscious authors of an unjust price commit injustices so grave, so harmful to many, that the quantity to be restored seems to exceed their own means. It then remains that, after those things necessary for preserving one's state modestly have been preserved, they should give all the rest to the poor or to pious works.

Private warnings also will be little efficacious, so that a more efficacious remedy must be sought from contrary associations of buyers, which would put bridles upon the cupidity of merchants.

291. Definition. Purchase is defined in Roman law as "an agreement for a price in exchange for merchandise"; sale, however, as "an agreement for merchandise in exchange for a price."¹²⁵ Therefore purchase and sale are two correlative contracts constituting one whole, which is called "purchase-sale" and can be defined as: an onerous contract constituted by mutual consent for giving merchandise for a determinate price and the price for merchandise. Therefore, besides the mutual consent of buyer and seller, two elements are required for the contract of purchase and sale: a thing as merchandise, and a price, which is a sum of money to be paid for acquiring some thing. Money, which in civilized regions today is made of gold, silver, etc., in ancient times was constituted by many other things, e.g., cattle, skins, ivory, shells, etc. Money, therefore, is a medium established by universal agreement for effecting exchanges of ownership.¹²⁶ The mutual consent which in this contract transfers ownership both of the thing and of the price must sometimes, by civil laws, be expressed under a determinate form, e.g., before a notary. Otherwise the contract is considered null.

By natural law a sale is perfected as soon as the parties have agreed concerning the thing to be delivered and the price to be paid. But before the actual delivery of the thing, consent does not produce the same effects in different positive laws. In German¹²⁷ and Austrian¹²⁸ law, ownership of the thing is transferred to the buyer only by delivery; before delivery he has only a right to the thing and consequently a personal action against the seller. On the contrary, in French,¹²⁹ Spanish,¹³⁰ Italian,¹³¹ English, North American,¹³² and Swiss¹³³ law, ownership of the thing purchased, together with its risk and advantage, passes to the buyer by the consent of the parties alone. There are, however, exceptions which can be seen in the places cited.

For the sake of clarity we shall now treat separately: 1. the thing saleable, or the merchandise, and the obligation of the seller; 2. the price and the obligation of the buyer; and finally, in a proper paragraph, certain sales in particular.

¹²⁵ From L. 5, § 1, D. 19, 5.

¹²⁶ After Aristotle, the Angelic Doctor (lect. 9 on book 5 of the Ethics) explains excellently how money, and indeed coin, is not only a suitable medium for effecting exchanges of ownership, but also a measure of the value of individual things.

¹²⁷ Civil Code § 446.

¹²⁸ Civil Code § 1053.

¹²⁹ Civil Code art. 1583.

¹³⁰ Civil Code arts. 1452, 1468.

¹³¹ Civil Code art. 1448.

¹³² Cf. Tanquerey, Suppl., p. 21ff.

¹³³ Code of Obligations art. 185.

292. Merchandise, or the object of sale, can be any thing estimable in money and belonging to the seller, unless a special prohibition of positive law is present.

It is said, 1. "any thing estimable in money," whether that thing be corporeal or incorporeal, such as a right of nobility. It is not lawful to buy or sell spiritual things for a temporal price, for this would be simony. The thing must be valued in money, because otherwise there is no longer a sale properly so called, but an exchange. Hence if someone gives, e.g., ten sheep for a horse, it is an exchange rather than a sale. These three contracts must be accurately distinguished: exchange, purchase-sale, and currency exchange. For if one thing is delivered for another, there is an exchange; if a thing is delivered for money as a price, there is purchase-sale; if one kind of money is delivered for another, there is currency exchange.¹³⁴

It is said, 2. "belonging to the seller." Therefore the sale of another's thing is invalid; compare, however, civil laws which sometimes establish otherwise, as was said above, n. 213, concerning a possessor in good faith. Those laws can be observed also in the forum of conscience. It is not required, however, that the seller actually possess the thing; it suffices that he have it in expectation, e.g., grain which is still growing in the blade. But nearly all modern laws prohibit an heir from selling a future inheritance, because such a contract is considered shameful, as inducing a desire for the death of the testator.¹³⁵

It is said, 3. "unless a special prohibition of positive law is present." For certain things cannot be sold while preserving the common good, e.g., certain weapons, poisons, or even precious paintings, etc.

¹³⁴ To these contracts of exchange and currency exchange, as also to the very common instrument which is called a cheque or bill of exchange (Wechsel), the same principles are to be applied which hold for purchase and sale.

¹³⁵ German Civil Code §§ 310, 312.

293. Obligations of the seller.

1. The seller must not demand an unjust price, concerning which there will be discussion below.

2. By natural law the seller is always bound to disclose to the buyer the substantial defects of the thing to be sold. The reason is that otherwise the consent of the buyer will be invalid, and consequently the entire contract invalid. Positive laws in some cases admit the so-called redhibitory action (Wandelungsklage) if a defect of the thing was concealed. Those are considered substantial defects (Hauptmängel) of the thing which render it notably useless for the primary purpose known to the buyer. But with regard to accidental defects a distinction must be made: if the buyer expressly asks concerning these defects, the seller is bound to answer according to the truth, or at least to decline an answer by saying, e.g., I sell the thing in the state in which it now is. For then the buyer can provide for himself; if he does not do so, he will have to bear the loss. But if the buyer does not expressly inquire concerning these defects, then the seller cannot by frauds induce him into error and thus cause him great damage; therefore he is bound to disclose entirely hidden defects which notably diminish the thing, but he need not indicate defects which any prudent person can easily detect.

St. Thomas teaches excellently concerning this matter:¹³⁶ "Concerning a thing which is sold, a threefold defect can be considered. One is according to the species of the thing, and if the seller knows this defect in the thing which he sells, he commits fraud in the sale; hence the sale is rendered illicit.... Another defect is according to quantity, which is known by measure; and therefore if someone knowingly uses a deficient measure in selling, he commits fraud and the sale is illicit. Hence it is said:¹³⁷ 'Thou shalt not have divers weights in thy bag, a greater and a less; neither shall there be in thy house a greater bushel and a less,' and afterward it is added: 'For the Lord abhorreth him that doth these things, and He hateth all injustice.' The third defect is on the part of quality, as if someone should sell a sick animal as healthy; if someone knowingly does this, he commits fraud in the sale, whence the sale is illicit. And in all such things one not only sins by making an unjust sale, but is also bound to restitution." As is evident from the example adduced of the sick animal, the Angelic Doctor speaks of a quality redounding upon the substance; but if there is question of a truly accidental quality, there is no grave obligation of restitution.

3. The seller is bound to deliver the thing physically, or at least morally, the same as that which the buyer intends to acquire. I say, however, at least morally the same; for even if the thing given is physically not altogether that which the buyer thought he was acquiring, nevertheless, if morally it is the same, i.e., almost equally good and useful to the buyer and worthy of the price offered, then there is at least no grave injustice.¹³⁸ E.g., when guests ask for Moselle wine in an inn and the innkeeper gives them wine almost equally good which, however, was not grown on the banks of the Moselle, he does not seem gravely to injure justice, provided, however, that he does not exceed the just price.

4. The seller is bound to deliver the thing sold to the buyer in the state in which it was at the time of the sale. Civil laws are wont to establish, or the contracting parties specially determine, whether the seller or the buyer receives the fruits of the thing before delivery; who ought to bear the expenses of custody; for whom the thing perishes, etc. All these statutes are to be observed faithfully.

¹³⁶ S. theol. 2, 2, q. 77, a. 2.

¹³⁷ Deut. 25:13.

¹³⁸ S. theol. 2, 2, q. 77, a. 2 ad 1.

294. Scholion. On diminution of weight or measure. St. Alphonsus¹³⁹ asks: "Whether one is excused [from injustice] who uses a diminished measure in order to obtain a just price which otherwise he would not obtain because of an unjust rate or an unjust monopoly of buyers? Lugo, Laymann, Palaus, and Sporer with Soto, Valentia, and Toledo, and the Salmanticenses with Rebello, Salas, and Dicastillo affirm this as very probable. The reason is that then he justly redeems himself from vexation." These things, however, are to be understood with a grain of salt and in our times can very rarely be reduced to practice; for it is said in Sacred Scripture: "A deceitful balance is an abomination before the Lord."¹⁴⁰ Especially, the excuse often brought forth by merchants is not sufficient, namely, that they cannot withstand "competition" if they do not diminish weight and measure. For no injury is inflicted upon them by the buyers. Nor may they say that the weight, even thus diminished, corresponds to the just price. For although this is true absolutely, nevertheless it is false after agreement has once been legitimately made concerning such a price and such a weight.¹⁴¹ They can, however, defend themselves against other "competitors" by accusing them of illicit machinations, or unfair competition (unlauterer Wettbewerb, concurrence déloyale). Such diminution of weight or measure is lawful only: a) if universal custom so bears and this can easily be known by the buyers; b) if buyers by unjust means, e.g., by so-called "syndicates" or boycott, compel sellers to a truly unjust price, because then the sellers can defend themselves.

Rules to be attended to by the confessor. Almost innumerable are the frauds which are wont to be committed in the sale of things. To discern whether from those committed there arises a grave obligation of restitution, the confessor should attend to three things:

a) whether the damaging is truly, formally, and efficaciously unjust, and this in grave matter;

b) whether the thing sold is at least morally the same as that which the buyer thought he was acquiring;

c) what the custom in force is in such a sale.

¹³⁹ Theol. mor. l. 3, n. 822.

¹⁴⁰ Prov. 11:1.

¹⁴¹ Thus also Billuart, De contract. diss. 5, a. 3.

302. 1. On sale by auction. A sale by auction, which is also called an auction or bidding,¹⁶⁹ is a sale in which, before several bidders, the thing to be sold is proclaimed by a herald and awarded to the one offering the greater price. It is twofold: the one voluntary, which is made spontaneously by the owner; the other judicial, which is commanded by a legitimate judge, e.g., in order to make a division of goods or to pay the debts of creditors.

The just price in this sale by auction is that which without fraud is offered by the last bidder and accepted by the seller, whether it is above the highest or below the lowest price.¹⁷⁰ Hence, e.g., if some painting is sold at auction for a price of 100,000 francs, it is a just price; but if books whose true price is 1,000 francs are sold for 10 francs, this also is a just price. The reason is that such sales are, as it were, aleatory, in which the thing to be sold does not seem to have a determinate price. For many things depend upon chance. There is added also the common consent of the people and of the legislator, who never call the prices obtained unjust unless fraud was employed. Such fraud can be employed both by the seller and by the buyer.

Fraud on the part of the seller is present if he establishes fictitious bidders who, without the intention of buying the thing, intend only to increase its price. Nevertheless, such fraud does not seem to be grave, for the fictitious bidders undergo the danger of paying the price offered, just as true bidders do; grave fraud is present, however, if the fictitious bidder is unable to pay the price offered. Furthermore, the seller can commit frauds as in other sales, e.g., by concealing substantial defects, changing the thing sold for another, etc. Whether the seller can licitly withdraw the thing from the bidding if a sufficient price is not offered depends: a) upon the manner in which the auction was publicly announced; b) upon the statutes or the custom of the place.

Fraud on the part of the buyer, however, is present if by illicit means he prevents others from bidding, so that he buys the thing below the lowest price. I say, however, by illicit means, for the buyer can employ lawful means, e.g., exhort or ask another to abstain from bidding; indeed, he can enter into an agreement with one or another buyer that they may assist one another in buying at the lowest price. Thus, at least, without injury to justice strictly so called. Charity, however, seems to be injured if, through the employment of these means, a needy seller is compelled to hand over his things for an insufficient price.¹⁷¹ Nevertheless, the practice of several dealers in secondhand goods seems unjust to me: having entered into a syndicate or pact among themselves, they truly and morally compel others to withdraw from the bidding and thus buy things at a wholly disproportionate price, especially in sales which are held at stated intervals by montes pietatis. For they act in this manner: whenever an outsider wishes to buy a thing, they always bid more and more, so that he must either withdraw from the bidding or pay a truly excessive price. When outsiders have thus been eliminated, they offer wholly insufficient prices for the remaining things to be sold, which the montes pietatis are compelled to accept, since the things proposed must altogether be sold. When the sale has ended, all united in the said syndicate divide among themselves the things bought or the profits obtained.

¹⁶⁹ Auction (Versteigerung, vente aux enchères, auction-sale).

¹⁷⁰ St. Alphonsus, Theol. mor. l. 3, n. 808.

¹⁷¹ Cf. Lehmkuhl, Theol. mor. I, n. 1337.

303. 2. On monopoly. A monopoly¹⁷² is the exclusive power of selling certain merchandise granted to one or a few sellers. It is either legal or established by private authority. A legal monopoly is the power, granted by public authority itself, of selling certain things exclusively. It is most frequently present and is exercised either by the government itself,¹⁷³ e.g., with regard to railways, the postal service, and the sale of tobacco, salt, etc.; or by private persons from the authority of the government, e.g., the sale of things made by a proprietary art,¹⁷⁴ the sale of medicine by certain pharmacists alone, etc.

A monopoly is established by private authority in many and diverse ways, e.g., a few men bring it about that they alone sell a certain kind of merchandise at a price pleasing to themselves.

A legal monopoly is legitimate, provided, however, that it is contained within just limits. This is evident, because it is a good means of acquiring money necessary for governing the republic; often it is nothing other than an indirect tax. Furthermore, it favors the public good in diverse ways.

Private monopolies are not illicit in themselves if, namely, they are instituted for the purpose of obtaining by legitimate means a good but just price. But if unjust means are employed, or an exorbitant price is demanded, or other abuses creep in, then private monopolies are unjust, as is evident of itself. In present times there exist very many private monopolies or similar combinations¹⁷⁵ which declare war upon one another. Since in civilized regions laws are not wont to permit excessive increases in demanding a price or the employment of wholly unjust means, it is often not established that existing private monopolies are certainly unjust; and consequently the confessor, at least ordinarily, is not bound to speak concerning them unless in a particular case the injustice is manifest,¹⁷⁶ as happens in certain modern syndicates.

¹⁷² Exclusive sale (Alleinverkauf).

¹⁷³ State monopoly (Staatsmonopol).

¹⁷⁴ Patent right (Patentrecht).

¹⁷⁵ Commonly, ring, cartel, trust, syndicate, etc.

¹⁷⁶ Billuart, De contract. diss. 2, a. 11, treats monopoly excellently; cf. also Staatslexikon der Görres-Gesellschaft, s.v. "Monopol," "Kartell," "Trust." Older theologians commonly teach that private monopolies injure at least charity; but at that time graver abuses seem to have crept into monopolies.

304. 3. On sale through brokers.¹⁷⁷ A broker is one who buys or sells not in his own name but in the name of another; he is therefore a mandatary, whose rights and obligations he consequently has. Today purchase and sale through brokers is most frequent.¹⁷⁸ The rights and obligations of the broker depend either upon law or upon free agreement. Brokers not rarely injure commutative justice because by unjust means, whether from their own mandator or from the other person with whom they contract, they procure an advantage for themselves. Particular cases can be resolved correctly if the general principle is always kept before the eyes: a broker is nothing other than the mandatary either of the seller or of the buyer. Therefore, e.g., if a broker sells more dearly or buys more cheaply than had been determined beforehand by the mandator, he acquires this profit not for himself but for the mandator, unless, however, he procured this profit by altogether extraordinary industry. Likewise, a broker cannot licitly buy for himself the thing to be sold at the established lowest price and afterward sell the same thing more dearly while retaining the excess of the price; for the mandator is rightly considered to disapprove this mode of acting. If, however, the broker cannot find a buyer, he can say this candidly to the mandator and then buy the thing for himself at the established price.

You will ask: Can craftsmen, e.g., shoemakers, masons, etc., retain for themselves reductions in price, five or ten percent, made by sellers for their benefit, while demanding the full price from their mandators? A sufficiently universal custom permits this; nevertheless, the matter is full of dangers, because sellers are wont to make such reductions only in appearance, while in reality they diminish either the quality or the quantity of the merchandise to the detriment of the buyer.

¹⁷⁷ Agent, broker, middleman (Agent, Makler, Sensal, courtier, commissionnaire).

¹⁷⁸ Agency transactions (Agenturgeschäfte).

St. Thomas, 2. 2, q. 77; St. Alphonsus, III, n. 793; ed. G., II, p. 232; H. Ap., tr. X, n. 165; Lugo, disp. 26; Lessius, l. 2, c. 21; Vermeersch, o. c., n. 338; Aertnys, l. VII, n. 469; Gopfert, vol. II, § 82; Schindler, II, p. 645 ff.; Ami du Cl., Tabl. gener., v. Vente, Restitution; and other modern authors.

1117. Things to be noted beforehand. All onerous contracts are divided into commutative contracts, of which some are principal, others accessory; and into aleatory contracts. All those contracts are bilateral, and for their validity equality of burden from each side is altogether required if they are commutative, equality of hope or fortune if they are aleatory. Concerning these in three chapters.

Commutative or strictly onerous contracts are: 1. purchase-sale; - 2. exchange and exchange of money; - 3. census; - 4. lease-hiring; - 5. emphyteusis and fief; - 6. partnership; - 7. transaction. Concerning each briefly.

We must treat: 1. of sale in general; - 2. of certain sales in species.

1118. DEFINITION. Purchase-sale is an onerous contract by which it is agreed that one party, the seller, hand over some thing for a price to be paid by the other party, the buyer.⁰⁴

For the substance of this contract three things are required: 1. mutual consent of buyer and seller; 2. some thing as merchandise; 3. money as price.

If a thing were given for a thing, this would be exchange; money for money, it would be exchange of money. If a thing were bought so that it might be sold with profit, there would be negotiation.

We treated above of the conditions of legitimate consent, and of the vices opposed to it (n. 1044 ff.); a few things which are proper to sale must be added here.

1119. PRINCIPLES. I. From the law of nature, purchase-sale is perfected by consent alone. For not the handing over of the thing itself, but the obligation of handing it over, belongs to the essence of this contract. - Hence, sale is perfected as soon as it has been agreed between the parties about the thing to be handed over and the price to be paid. Yet the parties can stipulate that the contract is not perfected unless solemnities are employed, for example writing or handing over made. For the external forum, an instrument is required for proof in many cases where another proof is not admitted (III, 795).

But the EFFECTS of consent alone, when the handing over of the thing has not followed, are not the same in all laws. In AUSTRIAN⁰⁵ and GERMAN⁰⁶ Law, ownership of the thing is transferred to the buyer by handing over alone; but meanwhile, with certain cases excepted, peril and utility remain with the seller. If it is a question of land, its registration in the land book is required in German Law for transferring ownership.

In FRENCH,⁰⁷ ITALIAN,⁰⁸ SPANISH,⁰⁹ and ENGLISH¹⁰ Law, ownership of the thing and its peril and benefit pass, by the consent alone of the parties, to the buyer, who therefore has a real action for obtaining possession of it. Yet if things are usually tasted beforehand, for example wine, or if they are handed over for trial, for example a horse, the sale is not perfected before the thing has been tasted or tried (cf. n. 1122, 3).

1120. II. Those alone can sell or buy who have power to furnish consent, and are not declared incapable by law. Now, apart from the general incapacities concerning which above (n. 1038), the following are proper to purchase-sale:

From Law universally in force,¹¹ all those upon whom it falls to protect the rights of others are declared incapable in part, such as parents, tutors, curators, administrators of communities. The reason for the incapacity is danger of prevarication to the detriment of pupils. Likewise, magistrates and other officials of the court are prohibited from buying litigious rights which must be defined before their own tribunal.

For the same reason, those who have ceded their goods are commonly prohibited from selling; and their sale is invalid by full right, unless it is a question of those things which, from n. 1023, are left to their discretion, and therefore the buyer is held to restitution. - Similarly, from FRENCH and SPANISH Law,¹² purchase-sale between spouses is prohibited, with a few cases excepted.

1121. III. Consent given earlier impedes later consent from being valid. The reason is that earlier in time is stronger in right. Hence it is not licit to sell a thing successively to two persons (Ami du Cl., 1910, p. 680; 1911, p. 346). - Yet if the thing has been handed over to the second buyer, it belongs to him, provided he bought in good faith and the purchase was made in a place where ownership of the thing is transferred by its handing over alone; and this has force both for movable and immovable things, because handing over confers right in the thing. On Germany, see n. 1119.

But in places where consent alone transfers ownership (cf. Spanish Code, 1743), it has force for movables alone, but on account of another reason, namely because, with respect to movable goods possessed in good faith, possession is to be held as title (cf. n. 936). Yet St. Alphonsus adds (III, 827): The second buyer, although he is of bad faith, is not held before the sentence to restore the thing to the first buyer, unless perhaps he himself induced the seller to sell the thing to him second. - As concerns the deceived buyer, he, in every Law, has an action against the seller for obtaining reparation of the damage inflicted on himself.

IT IS ASKED. What are the effects of EARNEST MONEY which are appended to the contract?

Resp. Earnest monies are defined as that money which sometimes the buyer, or tenant of a house, hands over to the seller, or lessor, as though by way of pledge for securing the contract. - Earnest monies are appended either to a promise of sale, or to the sale itself. If the former, each of the contracting parties can withdraw, namely he who gave the earnest monies by renouncing them, and he who accepted them by restoring double. - If the latter, earnest monies are generally an argument of sale, not indeed conditional, but already contracted; for they are usually given for part of the price, or as security of payment. Whence, none of the contracting parties can, with the other unwilling, withdraw from the agreement. Except if custom or a special agreement has established otherwise (III, 794; H. Ap., X, 166; Spanish Code, 1454; German Code, 336; Linz. Quart. Schr., 1905, p. 127).

Note. Conventional penalty, which is often annexed to a promise of sale, differs altogether from earnest monies. On this see 1955, where more abundantly on this question. Accommodate to our argument the principles established there for betrothals. Cf. Austrian Code, 609; German, 359.

The principles to be established refer to the thing to be sold, to be handed over, and to be secured.

1122. PRINCIPLES. I. So that there may be a valid and just contract of sale, its object must be a thing placed in human commerce, proper to the seller, determined, and physically or morally that which is sought.

1. It is required that it be placed in human commerce. Therefore any thing estimable by price can be sold, whether corporeal or incorporeal, as rights from a chirograph, credits, etc. (n. 852).

By special laws the sale of poison, of writing provoking to sedition, etc., is not licit. Such a sale, when the required circumstances are lacking, is illicit, as is clear. Recall the things said n. 1035, 2.

2. That it be proper to the seller. For the sale of another's thing is invalid with respect to transfer of ownership; yet with respect to a buyer of good faith it produces various juridical effects: for example, when the thing has been handed over, it confers on him possession apt for prescribing, and other benefits of a possessor of good faith (cf. n. 849, 937).

3. That it be determined, at least from the circumstances, so that the thing sold is truly individual and distinct from every other.

Hence, if wares are sold according to their weight, number, and measure, the sale is not perfected unless the quantity in weight, number, or measure has been determined. Therefore the thing stands at the peril of the seller. But if the sale is made by aversion, en bloc, when namely the whole merchandise effects as it were one determined body and is sold for a certain and defined price, the sale is perfected from the agreement itself, and from that point of time it stands at the peril of the buyer.

4. That it be physically or morally that which is sought. Otherwise there would be a substantial error, or at least such an error as would furnish a right to rescission. Recall the things said n. 1045.

The thing remains morally the same as that concerning which agreement was made if it is equally good, equally useful to the buyer. Then the contract is not made invalid, because the buyer is not frustrated of the end intended by himself.

1123. The obligations of the seller and the diligence of the buyer chiefly refer to THIS FOURTH CONDITION of the saleable thing. For the thing to be sold will then be physically or morally the object of a just contract if, with respect to substance, quantity, and quality, no fraud, no error, no vice, at least appreciable, intervenes.

Therefore let the following rules be given, for a more subtle explanation of the matter:

FIRST RULE. If the vice is concerning SUBSTANCE, for example if tin is sold for silver, water for wine, etc., the contract certainly is null, and the seller is held, at the will of the buyer, either to rescind the contract or to restore the excess of the price; and moreover to compensate the damages following from his deception, provided they were in some measure foreseen. Likewise, if quality has passed into substance, for example if the buyer expressly said: "I do not want wine, if it is not old" (III, 819).

Advert that here it is a question of a thing substantially vitiated relatively to human use and to the end for which it is bought. Whence it is probably not unjust to sell quid pro quo, as apothecaries are accustomed to do, provided that what is handed over is certainly of equal utility and the price is diminished; - likewise, to sell at the common price a thing which in itself is more perfect, but has another thing of worse condition mixed in; suppose better wine, which after mixture with water does not become worse than common wine; provided the buyer does not buy it for preserving, because wine mixed with water is easily corrupted (III, 820; H. Ap., X, 185).

SECOND RULE. If the vice is concerning QUANTITY, that is, concerning number, weight, or measure, the damage must be repaired; but the contract has force, except in the case in which deceit gave cause to it (cf. above n. 1047, 3).

Yet if the seller could not obtain the just price, for example on account of an unjust legal rate or an unjust monopoly of buyers, it is not improbable that the seller can diminish from the measure only so much as is required so that he may perceive the lowest just price; for thus he justly frees himself from unjust vexation. Yet hallucination in this matter is to be guarded against (III, 822; H. Ap., X, 186).

THIRD RULE. If the vice is concerning QUALITY, for example if wine is corrupted, cloth burned, one must distinguish, with account had of the circumstances. For the seller is either questioned in species or in general, or is not questioned. 1. When questioned in species whether the thing has a certain defect, the seller is held to manifest whatever vice; otherwise the sale is null, on account of error which, by reason of the circumstances, easily becomes substantial; or at least the sale is rescindable at the will of the buyer, on account of the deceit which the seller used. 2. When not questioned, or questioned only in general, he is held unequally according as the vice is patent or occult, notable or light (III, 823).

a) If the vice is patent, so that it can generally be known by anyone with common diligence, for example if a horse is one-eyed, he is not held from justice to manifest the defect; for then the thing itself speaks. Therefore he can leave the buyer, with the peril of erring, to his own judgment.

Except if the ignorance of the buyer is manifest, for example because he is inept, a child, etc.; for then, in relation to him, the vice is truly occult (H. Ap., X, 187).

b) If the vice is occult and at the same time notable, that is, if the vice, not knowable by common diligence, renders the saleable thing harmful, useless, or notably less useful for the end for which, in present circumstances, it is commonly accustomed to be bought, - the seller is held from justice to disclose it; for otherwise the buyer is not considered to consent to the purchase, or at least to the price of the purchase. Wherefore, either the contract is rescindable at his will, or at least it must be reduced to equality.

But when a vice is to be held as notable must be determined from various circumstances of time and place, from custom, and from the Law itself, which recounts various vices of this kind.⁰¹ But if the seller protests that he does not wish to render account of any defect, but wishes to sell the thing as it is, he is held to nothing; for then the contract is considered aleatory. Hence, deservedly tolerated is "the custom which prevails somewhere, especially in great markets, that animals be sold in this way, even if the vices are most occult. The reason is that, for taking away lawsuits, on account of the common good, this can be sufficiently rendered honorable by custom; provided, it must be understood, that the thing is not sold beyond at least the highest just price for which the thing is worth, with account had of that occult vice" (III, 823; Spanish Code, 1493).

c) If the occult vice is light and of small moment, the seller is not held from justice spontaneously to declare it, provided he preserves a proportioned price. For then buyers are not reasonably unwilling, because otherwise negotiation would become too difficult, with detriment of society.

For the rest, no buyer is for that reason induced into error, since an artful manner of acting of this kind is sufficiently known to all; as it is known to all that merchants are accustomed somewhat to paint their wares and to expose the better ones exteriorly (Linz. Quart. Schr., 1885, p. 101).

Note. Sometimes, when an obligation of justice does not exist, there can be an obligation of charity of warning the buyer, lest by carelessness or ignorance he be the author of damage to himself or to others, for example that wine not be preserved long if it is not apt for this, etc.

1124. II. The seller is held to hand over the thing sold; that is, to remit it into the power and discretion of the buyer. But this obligation can cease from a legitimate cause, for example because the buyer does not pay the price to be paid before handing over, or because there supervenes a reason of doubting whether he can pay.⁰² But the obligation of handing over imports the obligation of preserving the thing well meanwhile.

Moreover, the seller is held to hand over to the buyer the thing and its accessories: 1. in the place and manner concerning which agreement was made in the contract; 2. at the prefixed time; otherwise the buyer has a right to rescission of the contract and to reparation of damages, unless the delay proceeded from the deed of the buyer, or from fortuitous chance, or greater force; 3. in the state in which it was at the time of sale; otherwise what was agreed upon would not altogether be handed over; 4. according to the measure expressed in the contract.⁰³

The fruits of the thing sold and not handed over belong to him who is held to bear its peril (III, 798). Cf. the things said n. 1119 and the things to be said n. 1131.

How the matter must be arranged if one or another of the aforesaid conditions is lacking must be taken from civil Law.

1125. • III. The seller is held to furnish the buyer security of the thing, that is, to make him secure concerning peaceful possession of the thing and concerning its utility.⁰⁴ The reason is that, from the very nature of the contract, the seller does not acquire a right in the price unless he has placed the merchandise in the power and discretion of the buyer. But this is not done, at least perfectly, when the buyer, on account of causes existing before the sale, is disturbed in possession of the thing through eviction; or when, on account of occult vices, he finds it inept for its natural end, or the end expressly declared to the seller; which vices in Law are called redhibitory vices (III, 800). These things must be explained more fully.

1126. Questions. QUAER. 1. What is EVICTION, when and how is the seller held concerning it?

Eviction is the legitimate disturbance of the buyer in possession of the thing bought, which either totally or partially is vindicated by the true owner, or by another having right in it. Thus, for example, Paul sells his field to Peter; James proves that this field is his own, or is burdened by a hypothec, and the judge decrees that the said field must be returned to James: in this case eviction is had with respect to the buyer, who is despoiled of the thing bought by himself.

The seller is held concerning eviction if the cause of eviction, existing at the time of sale, was not declared to the buyer. But the seller can stipulate that he not be held concerning it. Yet this is not admitted in favor of a seller of bad faith, because "pacts which contain a shameful cause are not to be observed."⁰⁵ But if "by the malice or fault of the judge, or by the force of another, or by negligence of the buyer, the thing is evicted, the seller is held to nothing; for fortuitous peril belongs to the buyer" (III, 800, fin.).

By the law of nature, a seller of good faith is held to return the price accepted, insofar as he has been made richer. A seller of bad faith is held to preserve the buyer altogether unharmed.

By Positive Law, a seller of bad faith is always held to render the buyer unharmed. The same obligation also lies on a seller of good faith, except nevertheless the case in which the contrary was agreed. But no reparation of damages is owed to a buyer of bad faith.

QUAER. 2. What are REDHIBITORY VICES, and how is the seller held concerning them?

Redhibitory vices are called occult defects, not known to the buyer, existing at the time of sale, which wholly impede the natural use of the thing, or the use declared to the seller, or so diminish it that the buyer would not have bought it, or would have bought it for less, if he had had knowledge of them. Of this kind are, for example, mange of sheep, asthma of horses, rancidity of pigs, etc.

The seller is held concerning redhibitory vices, even if he was ignorant of them. He is obligated, at the will of the buyer, either to rescind the contract or to restore part of the price, according to the estimation of experts. Yet there is a great distinction between a seller of good faith and a seller of bad faith, as you will easily gather from the things said n. 936 and n. 941.

Note. The obligations of the buyer, with respect to merchandise, we shall explain below (n. 1131).

1127. NOTIONS. I. On price in general. The price of a thing is the expression of its saleable value through a certain sum of money. It is said: of saleable value, that is, of the aptitude which the thing has for being exchanged with others in human commerce.

Price, in general, ought to have three conditions: 1. that it consist in money; otherwise it would be exchange; - 2. that it be serious, that is, not simulated, nor derisory; otherwise it would be donation; - 3. that it be determined by the contracting parties, at least radically, or by someone to whom determination has been committed (III, 794).

II. On just price. A just price is that which is rightly estimated to equal the value of the saleable thing. - One is legal, which is taxed by law or by a magistrate. Another is vulgar or natural, or here and now current, which, the circumstances having been considered, is determined by common estimation. Another is conventional, which is determined by the free pact of the contracting parties.

Now: 1. A legal price excludes every variety, because it is defined by law. But the law itself can cease, or a just reason here and now excusing can be given.

2. But a vulgar price admits variety, because the judgments of men vary concerning the value of the same thing. Thus the price is accustomed to grow by reason of the abundance of buyers, or abundance of moneys, and scarcity of wares; on the contrary, it is accustomed to decrease by reason of scarcity of buyers or moneys, and by reason of abundance of wares. Hence, a vulgar price, within the limits of the just, is distinguished in such a way that it is: a) highest or rigorous, above which the thing is not accustomed to be estimated; b) lowest or pious, below which the thing is generally not estimated; c) middle or moderate, which stands between each.

How great that breadth of vulgar price is can scarcely be defined. - Yet commonly it is admitted that the price of cheap and necessary things has less breadth than that of precious and superfluous things. Thus, for example, wine or something similar which is worth five lire can be sold for six or bought for four; or if it is worth ten, it can be sold for twelve and bought for eight; if it is worth one hundred, it can be sold for one hundred five and bought for ninety-five. But a house or villa which was sold for 20,000 can after a year be bought for 12,000, and conversely (III, 803, 804).

3. Conventional price has for its object precious things, paintings, gems, horses, etc.; extraordinary things, singing, music, etc.; or things whose value is commonly unknown. Whence it too can admit variety, according as fluctuation of estimation happens on the part of experts or lovers.

1128. PRINCIPLES. I. One must stand of itself from commutative justice by the legal price. For to civil authority belongs the right of establishing whatever regards public commerce. Individual sellers besides, since the rate is determined in their favor, acquire strict right that another not entice buyers by selling the thing for a lesser price (III, 803).

Yet sometimes it is licit to exceed the legal price, namely: a) if it is not observed by the greater part of the people, with the prince knowing and not punishing; - b) if, circumstances having changed, the rate becomes unjust; c) if an excellent thing is sold, because the prince, in taxing the price, regards only the value of ordinary merchandise. Indeed, it is licit to sell for a lesser price if the rate was established lest things be sold more dearly.

Note. A magistrate who knows that the legal price is going to be increased can indeed provide for himself without evident injustice, but cannot warn others (Lehmkuhl, I, 1328).

II. When legal price is lacking, one must stand by the vulgar price, so that to sell above the highest and to buy below the lowest is unjust. The reason is that that is the just price at which the thing is commonly estimated among men; but if this is not preserved, equality is lacking, which pertains to the nature of commutative justice (cf. Salmant., c. 2, n. 94).

Lesion, in the external forum, does not give place to rescission of sale: in France, unless the deception is beyond half of the just price; in Spain, unless it is beyond the fourth part,1 and only in a double case: when namely the contract was entered upon either by a tutor or by a mandatary who represents an absent person; elsewhere, for example in Germany,⁰¹ otherwise. Yet in the internal forum, any notable lesion obliges to restitution. If the lesion happened in good faith, the one injuring is held at least to restore that in which he has been made richer, that is, in which he spared his own goods, lest he become rich from another's goods (cf. n. 935).

From these things conclude: Since the just vulgar price rests on common estimation, those do not act unjustly who, for gold or ivory which are offered by barbarians, give glass or cloth, or other things common among us. For these cheaper things have great value for barbarians.

III. Conventional price, according to diverse adjuncts, will be just or unjust. And indeed:

1. If each of the contracting parties is ignorant of the true value of the thing, for example judges a precious gem to be glass, the contract is invalid, as resting on substantial error; whence the price must be restored.

2. If each doubts concerning the true price, the purchase will be just, so that, if the buyer afterwards resold the thing more dearly, nothing is to be allotted to the former seller. For both, by agreeing about the price, expose themselves to equal peril.

3. If only one knows the true price of the thing, the purchase will be unjust if experts would commonly easily recognize the value of the thing: for then, with respect to this thing, there is present a price quasi-vulgar among experts. - Except if recognition of the value of this thing is to be attributed to the singular expertise, and therefore industry, of the buyer.

1129. Corollaries. I. It is licit to use industry for selling at the highest vulgar price or buying at the lowest. But it is never licit to use fraud or deceit (Ami du Cl., 1904, p. 476; 1906, p. 765): for anyone has a strict right not to be positively deceived. But once the price within the limits of the just has been determined by agreement, neither can recede from it, since each has assumed the peril upon himself (Lehmkuhl, I, 1327).

Hence: 1. The seller sins against justice if, before the agreement has been made, he deceitfully induces the buyer to pay a greater price than otherwise he would justly have given;3 likewise if, after the agreement has been made concerning the lowest or middle price, he secretly obtains for himself the highest, by deceiving the buyer in the counting of money, in weight, or in measure (Konings, n. 964).

2. The buyer similarly sins against justice if he knowingly buys below the lowest price, by asking the ignorant seller to condone what it is worth beyond this; because such condonation, since it proceeds from ignorance, is null. - But otherwise if, when questioned concerning the value of the thing, he simply remains silent and pays the lowest price; because thus he uses neither force nor deceit (III, 819).

3. The practice of certain merchants is to be reproved, who expose their wares for sale at a very cheap price so that they may turn buyers away from other merchants, but afterwards diminish the weight or measure, etc. Indeed such sellers become guilty of injustice toward other merchants, and are held to restitution for damage inflicted on them; because each has a right not to be impeded by deceit or fraud from hoped-for gain or from gain to be made legitimately (Lugo, disp. 26, n. 135).

But advert for practice: a) Commonly faith is not given to the lies of sellers affirming and swearing that they obtained the saleable thing for themselves at such a price, or sold it to others at such a price, so that thus they may draw the buyer to the highest price; nor to the lies or perjuries of buyers affirming that they bought the thing for so much from others, or that others offered it to them for so much, so that thus they may bring the seller to the lowest price. b) Yet if it were established to someone that faith is given to his lies, etc., and that these truly are the cause of a greater or lesser price, then he would not be excused from the fault of deception and injustice (III, 805). - Cf. Linz. Quart. Schr., 1910, p. 593; Gopfert, II, n. 115, Reclamewesen.

II. He who privately knows that the price of merchandise is going to be increased or diminished soon can sell or buy it at the current price, after the example of blessed patriarch Jacob, provided fraud and lesion of charity are absent. For the future value is not to be regarded, but the present value, which indeed is not varied from some particular knowledge, but from common estimation. Cf. St. Thomas, 2. 2, q. 77, a. 3, ad 4.

We said: a) Provided fraud is absent; for a sale or purchase would be unjust if someone, for example, through public journals, were to spread false rumors about the price soon to be diminished or increased, etc., as is frequently in use today, especially concerning public censuses. - b) Let lesion of charity be absent; for sale or purchase would be illicit if the other contracting party would be cast into grave necessity; or also, if the thing which could easily be sold to several, or bought by several, is sold to one only, or bought by one, who therefore is going to suffer the whole damage alone; or if, when it can be sold to him who is going to consume it immediately, it were sold to another who is going to preserve it. Therefore, excepting cases of this kind, charity does not seem to press. For strictly speaking, he does not injure charity who uses his right, justly taking counsel for his own affairs, although another by accident suffers damage from this (III, 824; H. Ap., X, 188).

III. When an extrinsic title stands, it is licit to sell above the highest price or buy below the lowest. The reason is that that extrinsic title, which is joined to the thing to be sold or bought, causes the accustomed value of the thing to increase or decrease.

1. The extrinsic titles on account of which it is licit to SELL above the highest price are the following:

a) Profit certainly or probably ceasing from alienation of the thing, or damage emerging, or any other inconvenience of the SELLER estimable by price; for a seller of this kind sells not only his bare thing, but also his benefit, or the damage which he suffers. - But advert that the buyer must be forewarned concerning these titles, as also concerning the following, so that he can, if he wishes, provide otherwise for himself.

b) Special affection which the seller reasonably experiences toward his own thing; for from this arises, in selling, an inconvenience estimable by price. But here advert that the special affection of the buyer is not, as the affection of the seller is, a title of selling for more; because, as is commonly taught with St. Thomas (2. 2, q. 77, a. 1), no one can sell what is not his own (cf. Lehmkuhl, I, 1330). Yet several moderns contradict, on account of the received custom, they say, of increasing the price of a thing which is going to bring special benefit to the buyer (Scavini, II, 393; Gousset, I, 840).

c) The mode of selling; for if things are sold in small quantity and by retail, a greater price can be exacted, on account of the greater cares and expenses which then are usually expended for preserving them. Besides, if they are sold at auction, with public power approving this, whatever price is determined by the bidders without fraud is considered just (III, 807-809). Cf. below n. 1134.

2. The titles on account of which it is licit to BUY below the lowest price are numbered as three:

a) Damage emerging from the present purchase, or profit ceasing, or any other inconvenience of the BUYER estimable by price. Whence, with right preserved, you can buy more cheaply a thing from which little utility will come to you. But the seller is to be warned of this from charity.

b) Voluntary offer; hence you can buy for less wares voluntarily offered by sellers running through streets and houses. For the adage bears: Voluntary wares become cheap; and this more probably, says St. Alphonsus, by a third part; and the reason is that this voluntary offer commonly argues either fewness of buyers and abundance of wares, or danger of a hidden defect, etc. But if things become saleable and are offered on account of poverty, it is probable that, also in this case, not otherwise than voluntary wares, they become cheap; and therefore can be bought more cheaply, provided it is not a question of things which are commonly bought and offered, as grain, oil, and similar things. Yet he who buys more cheaply from a poor man pressed by necessity easily sins against charity, if he buys the thing for his own utility, not for the favor of the poor man.

c) The mode of buying; for wares can be bought for less: if they are bought together in great quantity, since the seller by this mode is freed from many cares, expenses, and inconveniences; - or if they are sold at auction, on account of the reason stated above; - or finally if they are exposed for sale among dealers in old things; because things of this kind, even if perhaps precious, are considered to have lost their original price, and to receive another from custom or the agreement of the contracting parties; or at least they suffer the greatest breadth of price, as we already noted (n. 1127). See with respect to these things the Holy Doctor (III, 801, 802; H. Ap., X, 174).

1130. Questions. QUAER. 1. Whether DELAYED or ANTICIPATED payment of the price is a legitimate cause of selling for more, or buying for less?

Resp. Affirmatively, if there intervenes a title excusing from usury, as profit ceasing, damage emerging, peril in exacting the price. Thus it is certain that a thing can be sold more dearly if the price is to be handed over at the time when the thing is going to be worth more, provided it would have been preserved by the seller until that time. On the contrary, it can be bought more cheaply if it is to be handed over at a time when it is going to be worth less (III, 810; H. Ap., X, 178).

Indeed, today this seems to be admitted simply, without inquiry being made about other titles. The reason is both because common estimation thus bears, and because, while the use prevails, not reproved by the Church, of perceiving the legal or vulgar rate from a loan, anticipation or delay of payment is truly estimable by price. And on account of this same reason, chirographs and credits can be bought more cheaply if they are paid by anticipation (III, 829). Public censuses and other titles, concerning which great negotiation takes place today in the mercantile forum (a la bourse), can similarly be bought and sold at the current price, even if that price does not correspond to the inscribed price. For from common estimation, titles of this kind are equated with ordinary wares, whose price grows or decreases according to the diversity of circumstances.

QUAER. 2. Whether chirographs and credits, on account of difficulty of OBTAINING payment, can be bought for less?

St. Alphonsus responds (l. c.): "He who is not the cause of that difficulty licitly buys for less, according as the difficulty or uncertainty of payment is lesser or greater; because with such peril and difficulty they are worth less. - Likewise, a credit uncertain or of difficult exaction can licitly be bought for less, even if it is easy for the buyer to exact it entirely: because price is taken from common estimation, not from the particular circumstance of the buyer."

1131. The obligations of the buyer, once the price has been established, refer both to the price and to the merchandise itself.

1. WITH RESPECT TO THE PRICE. a) He is held to pay the price in that place and time at which the thing is handed over to him, unless it was otherwise agreed, or unless, no caution having been furnished by the seller, there is reason to fear lest he himself be cast down from possession of the thing. b) He must pay interest of the price if by pact it must be paid, or if the thing sold and already handed over is fruitful, or if he himself was in culpable delay. c) He is held to pay also all the expenses of sale and carrying away, except the case of a contrary pact.⁰²

2. WITH RESPECT TO THE MERCHANDISE. a) He is held to assume it into his own power at the established time, or according to the nature of the thing or the custom of the place by determining the time; otherwise, as we have just hinted, he is held toward the seller concerning all expenses made for the sake of preserving the thing, as well as concerning the damage which thence comes to him. b) Indeed, sometimes he is held, at the will of the seller, to rescind the contract (cf. n. 1047).

We shall treat: 1. of sale with an accessory pact; - 2. of sale at auction; - 3. of monopolies; - 4. of sale through brokers.

1132. Several pacts can be added to sale. The more frequent are:

1. Addiction to a day, or a suspensive or even resolutive condition, by force of which it is licit for the seller, up to the lapse of the term established, to sell the thing to another who has offered a better condition, unless the buyer offers the same.⁰³

2. Pact of trial, or condition of experiment, by force of which the contract is not entered upon except after trial made by the buyer. Cf. Berardi, Theol. mor., II, n. 599; Schindler, II, 650.⁰⁴ - 3. Pact of preemption, or concerning the reserved right of preference, by which the buyer assumes the obligation of offering the thing bought back to the seller to be redeemed, if afterwards he wishes to alienate it.⁰⁵ - 4. Pact of selling back or redemption, by which the right is established that, when the price has been restored and improvement compensated, the thing returns to the first seller. It can be established in favor either of the seller or of the buyer, according as the execution of the pact is remitted to the discretion of one or the other, or of the one first asking.⁰⁶

Concerning this last pact it is enough to NOTE these few things: Since in this pact a burden is imposed on him who is held to rescind the contract at the discretion of the other, equity demands that this burden be compensated. Hence: a) if the pact is added in favor of the seller, the price must be diminished by reason of the burden which is imposed on the buyer; b) if it is added in favor of the buyer, the price must, with proportion preserved, be increased (III, 812). See also the Codes, l. c.

1133. Note. 1. Ancient authors speak much of another contract which is named MOHATRA. This contract is perfected if someone sells on credit, with an explicit or implicit pact that the thing be sold back to himself for less, counted money: for example, Peter sells on credit his house to John for 12,000 francs to be paid after two years, under this pact, that John immediately sell the house back to him for 10,000 to be counted out at present. - It is illicit because it includes palliated usury, as is established from the 40th proposition condemned by Innocent XI. Cf. St. Alphonsus (III, 813).

NOTION. Sale at auction, or by public auction (vente aux encheres), is that which is made through a herald, and in which the thing is adjudicated to the one offering the last greater price. - One is judicial, another voluntary, which is also called BIDDING.

1134. • PRINCIPLE. The just price in sale at auction is that which, without fraud, is constituted from the bidding itself. For it is determined by the free concurrence of buyers; wherefore, the thing becomes more estimable if many buyers concur, less estimable if few. The seller himself has tacitly accepted this estimation. Whence, from common sense, with public authority also approving, that is held as the just price which is offered by the last bidder, whether it is above the highest price or below the lowest; and the seller of himself does not have the right of withdrawing the thing, when bidding has begun, if a lesser price is offered.⁰² But the required equality is situated in this, that from each side, the same hope of gain and the same peril of damage are had.

We said without fraud; but fraud can be inferred both by the seller and by the buyer.

1. Fraud is inferred BY THE SELLER if he conceals an occult vice of the thing, or if he sends in fictitious bidders. Yet a seller would not be condemned who suborns fictitious bidders for redeeming himself from unjust vexation, for example because buyers agreed among themselves about not bidding. Likewise, in judicial sale, the inequity of conditions can easily excuse the seller if he sends fictitious bidders, namely lest things be sold below the middle price which, those adverse conditions being excluded, they would have.

2. Fraud is inferred BY THE BUYER if by deceit or threats he impedes others from bidding, or from offering more. But fraud will not be present if he asks others not to bid; for thus liberty of bidding is not taken away, provided the requests are not importunate.

1135. IT IS ASKED. Whether a buyer can ENTER A PACT with others, that they not bid, or not offer more?

Resp. Negatively, of itself. For the seller "has a right not to be deprived of the hope of obtaining a greater price, if several offerers intervene who, led by emulation, increase the price; for the right and nature of bidding seem to require this, so that equality be preserved. This has force at least in the case in which, by the sentence of a judge, the thing is exposed for auction; because then the owner of the thing is altogether held to hand over the thing to the one offering more, with danger of selling below the lowest price" (III, 808, dub. 2).

It is said of itself, because by accident this is sometimes licit. Thus buyers joined by society or friendship seem to be excused if they agree among themselves that only one of them will bid; because they make as it were one moral person, nor can it be exacted that they bid against each other.⁰³ Similarly buyers are excused in the case in which, from prevailing custom, the seller can withdraw his thing if a lower price is offered; because if he himself can impede the price from decreasing too much, equity demands that buyers also can impede it from increasing too much (Scavini, II, 405).

Note. Heralds to whom the sale of a thing is committed certainly sin against justice if they institute an auction at that time at which they know that few buyers are going to be present, namely so that they may favor friends; if they adjudicate the thing sooner or later than is usually and fittingly done; or employ other things of this kind, by which either damage is inferred on the seller, or favor is shown to one of the bidders, to the detriment of the others.

1136. NOTION. Monopoly, or sale by one, can be defined: the exclusive power of selling, existing in the possession of one or of a few only.⁰⁴

DIVISION. This power can be of right or of fact; whence a twofold monopoly is given: monopoly of right, if this power is sanctioned by public authority; and monopoly of fact, if it is exercised apart from or against right. Besides, monopoly of fact and of right is either public or private, according as it is exercised by the Government or by private persons.

Private monopoly of fact is either strictly so called, or monopoly of merchandise, which can be had in a double way: a) if someone impedes the importation of other wares, so that he alone may sell his own; but today, on account of innumerable railways, this impediment will rarely be possible. b) If at an opportune time, for example harvest, one or a few buy all, or almost all, wares, so that then they may sell again at a great price; - or it is broadly so called, or monopoly of price, and exists when sellers conspire among themselves not to sell or not to buy except at a certain price.

1137. PRINCIPLES. I. Private monopoly of right is licit. For the Government can, on account of a just cause of the public good, concede such a privilege to merchants.

Thus, in some regions, the privilege of selling tobacco or salt is conceded to a few, so that the tax necessary to the republic may thence be increased. But lest civil society be burdened by monopolies of this kind, it belongs to the prince or magistrate to tax fittingly the price of the things to be sold (III, 814). - With respect to typographers, or authors, recall the things said n. 856.

Note. A fortiori, a public monopoly is licit, provided it does not extend to almost all businesses (cf. Vermeersch, o. c., n. 183, 2, b).

1138. • II. Private monopoly of fact is sometimes unjust, sometimes illicit, and sometimes just and licit.

1. It is unjust: a) If a merchant impedes by fraud or lie that other wares be brought in, so that he may sell his own wares more dearly with damage to citizens. b) If merchants conspire among themselves so that they may sell above the highest price, or buy below the lowest; for it does not belong to private persons to change the common and legitimate taxation of price. c) If one or a few buy all or almost all things necessary for support, so that they may sell them for more than they would be sold in the market, monopoly being removed.

We said necessary things; for it would not be unjust if wares not necessary for the support of life or for the common state of the republic were bought, such as precious gems, noble horses, ornaments of women, and similar things.

2. It is illicit, but not unjust, if merchants, without force and lie, so agree about the price of wares that, with the just price preserved, they neither sell for less nor buy for more than what was agreed among them.

These indeed sin against charity, although it is not always mortal; for charity, although it does not oblige one to sell below the highest price, nevertheless seems to oblige one not to dissuade others from selling for a lesser price. - But they do not sin against justice, because the highest price is still just.

3. It is licit and just if one or several buy wares so that they may sell them again with moderate gain.

Indeed, although they were to sell again at the highest price, they would not sin against justice, because anyone has a right to sell his own thing at the rigorous price; nor against charity, because no one is held to neglect his own benefit so that he may avoid another's damage, which he is not held to avert (III, 816, 838).

IT IS ASKED. Whether, after a monopoly has been made by merchants concerning a price beyond the highest, it is licit for OTHER merchants to sell at the same price?

Resp. St. Alphonsus denies it with the truer opinion; because that estimation, as arising from injustice, cannot be just, nor can it be called common estimation, but deception and fraud (III, 817; H. Ap., X, 184; l. El. qq. ref., n. 34).

1139. Note. The things which we have said about a conspiracy of sellers also have force for masters who hire craftsmen to work at a lesser price from mutual machination; as for craftsmen who, as in today's time is accustomed to be done, especially by members of the worst association, commonly called internationale, by mutual agreement promise themselves that they will not do or not perfect such work unless they receive such a price. But what is to be said concerning mutual agreement to cease from one's work, see below n. 1154.

1140. • DEFINITION. Sale through brokers is that which is not made immediately by him to whom the thing to be sold belongs, but from his mandate or commission by others, who are called brokers, that is, intermediate negotiators.

Some are legally created (agents de change, courtiers), others simple mandataries, for example traveling agents (commis voyageurs), and others finally act as broker by way of a transient act, as children of the family selling or buying for parents, servants for masters.

From the definition it is clear that their obligations are to be taken from the things said above (n. 1088). But if they have agreed concerning a wage to be accepted, they are to be held as lessors of work (cf. n. 1154).

PRINCIPLE. A broker, as such, has a right to the price of the labor of industry only, but not to a part of the benefit. The reason is that he acts not in his own name, but in the name of the owner (III, 825 ff.). - Hence, speaking of itself, a broker cannot retain gain for himself if he sells above the determined price, nor the excess of the price if he buys below such a price.

Yet by accident, he can retain the excess of price: a) If by his industry, or by labor not owed, the thing became better; but if he sold for a greater price, for example because in a place very distant from that which the owner designated, he cannot retain except the price of labor. The same has force if gain was made by occasion of purchase. b) If he tacitly agreed with the owner that he would give him nothing beyond the price designated. Likewise, if the owner's consent can easily be presumed, as commonly happens when the gain is of small moment. c) If to his mere favor the buyer offered a greater sum, or the seller diminished the price: for example, if a merchant remits something of the price to a tailor buying cloth, so that he may entice him to frequent his workshop. Yet let the confessor cautiously give faith to brokers asserting that such donations were made to themselves, especially if it is a question of servants or children of the family (Praxis, n. 60).

1141. • Questions. QUAER. 1. Whether a broker can BUY FOR HIMSELF a thing to be sold at a determined price, and afterwards sell the same thing, as his own, for a greater price?

Resp. Affirmatively, from Natural Law, but under these conditions: a) that, with moral diligence employed, he did not find a buyer who would offer more; b) that he buy the thing for himself not fictitiously, but truly, so that he undergo its peril, and if perhaps he does not sell it for so much, nevertheless he returns the determined price to the owner. - Likewise, if someone commits to you the purchase of some thing at such a price, and you find it at a lower price, you will be able in this case to buy the thing for yourself, and afterwards sell it to that other at a greater price (H. Ap., tr. ult., 35).

We said: from Natural Law, for, as Marres notes, this manner of acting is today reproved by law or at least by received custom, on account of the frauds which would easily arise (de Just., l. 4, n. 286).

QUAER. 2. Whether a broker who offered himself GRATIS for selling or buying can retain the price of his labor?

Resp. More probably he can, if he did not have the mind of donating, and the owner had already previously determined to sell the thing, and there was no one else who would furnish this gratis. For thus he was indeed mendacious, but not unjust; because his labor was worthy of a price (III, 825, in fine, with Roncaglia, Sporer).

1142. I. Exchange (echange) is a contract by which two or more persons bind themselves mutually to giving one thing for another.

It differs from sale in this, that its price consists in a thing, since merchandise is constituted as the price of another merchandise. For the rest, it is generally subject to the same rules as sale. Several special things must be read in civil Law.⁰¹

1143. II. Money exchange (change) is an exchange of money for money with profit of the one exchanging. He from whom the exchange is sought is called the money-changer; he who seeks it, the exchange-seeker.

It differs from loan for consumption, because it is of the nature of loan that money be given immediately for use and yield to the good of the one receiving; but in money exchange, money is primarily handed over for exchange and yields to the good of the one giving.

Money exchange is twofold: manual, or small, or trajectitious, according as moneys of diverse account are exchanged from hand to hand, or present money is commuted with absent, through bills of exchange (lettres de change).

Trajectitious exchange is called: a) local or by letters, if the money-changer here, for example at Rome, first accepts moneys, which afterwards, when letters have been given, he refunds elsewhere, for example at Paris, through his factors; b) real or also temporal, to markets, Frankfort, etc., if the money-changer first gives moneys under this law, that he receive them after a certain time elsewhere with profit; c) dry, or fictitious, when the money must be restored indeed in the same place in which it was given, but a diverse place is feigned, which may be a title for the money-changer of perceiving greater gain. This contract is a true loan for consumption, and therefore the same things must be held about it as about loan for consumption (III, 850). For the rest, such a manner of acting is no longer had recourse to.

1144. PRINCIPLE. True money exchange is licit, provided equality is preserved, or the profit does not exceed the just price determined by law or custom. The reason is that there are various titles from which the money-changer can perceive profit, namely: 1. securing of money up to the place of transmission; 2. hiring of work for counting and transmitting money; 3. damage emerging from misfortunes of debtors; 4. expenses and cares in holding the exchange-office (III, 851).

954. • What it is and how the contract of purchase and sale is perfected.

I. What is it? The contract of purchase and sale is thus defined by Blackstone:¹ "A transmutation of property from one man to another, in consideration of some price or recompense in value." - From this definition it is clear that these three things are essentially required for the contract of purchase-sale:

a) The legitimate consent of seller and buyer;

b) Merchandise, i.e. a vendible thing, to be handed over for a price;

c) The price to be paid for the merchandise, and that determined by the contracting parties themselves or to be determined by the judgment of a third party.

But by the name of price here is understood money alone; for an agreement concerning merchandise to be handed over for merchandise is the contract of exchange (exchange), and not purchase-sale properly so called.

Therefore Blackstone's definition also comprehends exchange.

955. • II. How the contract of purchase and sale is perfected.

It is perfected by the consent alone of the parties. Nor does it matter for the forum of conscience whether consent is expressed by word or by writing. Writing is used only to prove that the contract has been entered. But although purchase-sale is perfected among us by the consent alone of the parties, nevertheless "the peril of the thing," says Kenrick,² "does not seem ever to pass to the buyer unless it" has been "handed over in some manner," or has begun to be handed over. "There must be," says Kent, "a) a delivery or tender of it, or b) payment, or tender of payment, or earnest given, or c) a memorandum in writing signed by the party to be charged."

Yet these things are not valid in every way for Louisiana and Virginia. "Everything depends on the custom of merchants" (I would add also on agreement).² But it is certain:

1° That Churches and pious causes from the disposition of Roman Law³ acquire dominion without any handing over.

2° That the peril of the thing pertains to the seller, if it is a question either a) of the sale of things by weight, number, or measure, which have not yet been weighed, numbered, or measured; or b) of the sale of things for tasting or testing, which have not yet been tasted or tested.

3° If the thing sold perishes either from an intrinsic defect already existing at the time of sale, or from the fault of the seller, or also by a fortuitous event at the time when the seller was in culpable delay for handing over the thing, the seller is held for the price accepted and for the expenses of the contract.

Cases. - 1. Josephine expressed consent by words, by which for a determined price she sells her field to a certain monastery. - The dominion of the field passes to the monastery without any handing over; for it was sold to the Church.

2. Titius sold to Caius ten measures of grain, existing in his abundantly supplied granary; but before that quantity was determined by measure, an equal quantity of grain perishes by fire or is taken away by theft. To whose damage? To the damage of Titius, unless agreement bears otherwise.

3. Titius absolutely bought from Caius a determined horse to be handed over after a month; but the horse perishes before the month has elapsed. To whose damage? To the damage of Caius, if it perishes either from an intrinsic defect existing at the time of sale, or by defect of due vigilance or care on the part of Caius, or after the month has elapsed, if Caius was in culpable delay in handing over the horse to Titius, provided nevertheless that in this last case the horse would not have perished by the same fortuitous event, for example by fire, equally at Titius's place.

956. Questions. - Query 1° To whom do the fruits of a thing sold pertain, for example calves from a cow sold?

Resp. Distinguish. For either agreement has been made between the parties concerning this matter, or not. If the former, one must stand by the agreement; if the latter, subdistinguish. For either the thing has already been handed over, or it still is to be handed over. If handed over, they belong to the buyer, and that practically also in the case in which the latter is in delay as to payment of the price; for the seller vindicates for himself only the increase (interest) of the price, according to the agreement of the contracting parties. - If a determined thing, for example this cow, is still to be handed over, i.e. according to what was said above in n. 955, if in no manner it has been handed over or begun to be handed over, again it must be distinguished. For either the thing is sold absolutely, or conditionally. If absolutely, the fruits of the thing pertain to the buyer, and civil laws opposed on this point have been reproved by Canon Law, as favorable to usurious profit.¹ Yet in the case in which, from custom, the peril of the thing would not belong to the buyer, I would resolve the contrary; for then the reason of equity alleged by St. Alphonsus, namely that he who has the inconvenience ought also to have the advantage, militates rather for the seller. If conditionally, i.e. under a suspensive condition, we think it must be distinguished thus. Either that thing sold produces fruits after the condition has been fulfilled, and the fruit will belong to the buyer, as in absolute sale, such as that about which there is question becomes when the condition has been fulfilled; or before the fulfillment of the condition, and then it is disputed. Therefore in this case the condition of the possessor, the seller, will be better, especially since the peril of the thing sold belongs to him up to the fulfillment of the condition.

Query 2° At whose expenses come the acts which are usually made in the purchase-sale of things, especially immovables; likewise at whose expenses is the handing over or transmission of the thing?

Resp. to the 1st. Excepting the case of special agreement, the laws of each State must be consulted.

Resp. to the 2nd. Unless it has been agreed otherwise, at the expenses of the buyer.

Query 3° What must be held concerning the firmness of the contract of purchase-sale entered with the giving of earnest; namely whether, when earnest is given, it is licit for the giver to withdraw from the contract with the loss of the earnest?

Preliminary Note. - By the name of earnest (earnest-money) is understood that which sometimes is given by one of the contracting parties to the other either as pledge of the firmness of the contract entered, or as pledge of the obligation of not withdrawing from the contract except with the loss of the thing given. Whence a twofold earnest is distinguished, namely: earnest which is simply given for the greater security of the contract entered, from which therefore it will not be licit to withdraw; and earnest which is given only for establishing the obligation of not withdrawing from the contract, except under the penalty of losing it; so that it is indeed licit to withdraw from the contract, but not except with the loss of the earnest.¹

Resp. In doubt of which kind the earnest is, and unless custom holds otherwise, it is to be held as a pledge of the firmness of the contract entered.²

957. • All those can enter the contract of purchase-sale who are naturally capable of contracting and are not declared incapable by positive law. But by our law a twofold class of citizens is declared incapable. The first is of those who are declared incapable of any contract in general, and consequently also of the contract of purchase and sale. The second is of those who are declared incapable specifically for the contract of purchase and sale in the cases assigned by law.

To the first class pertain: 1° minors, who can buy only those things which are necessary, in the sense declared in n. 837, 1°, and concerning which provision would not be made by parents; 2° wives, who nevertheless can: a) buy those things which pertain to the daily necessities of the family and to their own condition and decent support; b) sell all things of which they have full dominion and buy from these; c) in many States conduct commerce separately from the husband; d) sell and buy jointly with the husband as to common goods, n. 607. In what manner spouses can sell something to each other, see n. 840; 3° interdicted persons; 4° aliens as to immovables in certain States, as was said in n. 844.

To the second class chiefly pertain 1° Officials of the Supreme Government, of States, of Municipalities, etc., who cannot buy things which they sell in the name of the Supreme Government, State, Municipality, etc.

2° Agents (agents), who generally cannot buy that kind of merchandise which they sell in the name of another.

3° Guardians "cannot act for their own benefit in any contract, or purchase, or sale, as to the subject of the trust."¹

958. • Query. What must be established for the forum of conscience concerning the value of the contract of purchase and sale entered by him who is indeed naturally capable, but civilly incapable?

Resp. With attention to the things handed down in n. 882, q. 1, we think it can probably be defended that such a contract, according to the mind of the civil legislator, is not ipso facto invalid in conscience; but that its invalidity must be declared by the judge. Whence, before the judge has declared the nullity of the contract, neither contracting party is bound from justice to withdraw from the agreement once entered, provided it can be judged naturally valid and just. Yet generally we think it must be said that the obedience owed to civil law demands that an incapable person not enter a contract, and that a contract not be entered with an incapable person; unless perhaps it is a question of those contracts which daily use and common prudence, with civil law neglected and the government silent, have made as it were legitimate, and in which the capable party abstains from every fraud or malicious art. Indeed, as to these contracts it seems able to be reasonably presumed that the civil legislator did not wish to comprehend them so strictly under his incapacitating law; indeed in such a way that the incapable party, to whom the petition for a declaratory sentence of nullity is conceded by Law, by the persuasion of equity would by no means be suited to urge his supreme right as to such contracts and pursue it in judgment.

959. • Supposing those things which, according to what was said concerning contracts in general in n. 830 sq., are required for the matter of any contract; in this place concerning the matter of purchase-sale it suffices to establish for a rule:

All those things which are placed in civil commerce can be bought and sold, provided that no prohibition of law intervenes, such as in reality intervenes as to certain goods assigned in Law, whose sale is expressly prohibited either absolutely or at least in a certain hypothesis. And thus:

1. Outside the case of marriage, every pacting concerning the hereditary succession of a person still living is absolutely prohibited, even if that person himself consents.

2. In the hypothesis that the formalities to be observed by law are not observed by guardians and curators, the sale of goods pertaining to their wards is prohibited to them.

3. In the hypothesis that someone, unequal to paying his debts, has made cession of his goods, the sale of those same goods is altogether forbidden to him.

4. In the hypothesis that the goods of some debtor have been placed under custody by legitimate authority, the sale of those same goods is interdicted, unless those things to be observed by Law are observed in it.

5. Finally, under penalty of a monetary fine or prison, the sale (at least if it is done indiscriminately) of certain things is prohibited, which of themselves are harmful to social order either under a physical respect or under a moral respect.

960. • But in particular concerning the matter of purchase and sale a fourfold question is usually moved among Authors, namely:

Query 1° Is another's thing VALID matter of purchase and sale?

Resp. Negatively. Yet the buyer of good faith: 1° acquires the fruits of the thing bought according to what was said in n. 723; 2° can prescribe the thing, provided the conditions required for legitimate prescription are present.

Therefore the practice of those must be reproved who, when things stolen or lost have been bought in good faith, refuse to restore them to the owner appearing and seeking them back, unless the owner first refunds the price expended for the same.

Query 2° Whose is the thing bought by a buyer in his own name, for ANOTHER'S money?

Resp. We think it must be resolved that such a thing belongs to the buyer, so that he is not bound to hand over that thing to the owner whose money it was, provided he can otherwise satisfy his obligation of restoring. Yet except the case in which the money belonged to the Church, because then by Roman and Ecclesiastical Law the thing itself is acquired for the Church. Cf. St. Alphonsus.¹

Query 3° Is a thing which at the very time of sale has already perished apt matter of sale?

Resp. Negatively. But if only part of the thing has perished, the buyer will be free to vindicate that part to himself for an equitable price.

Query 4° Is a thing which can be validly sold also LICITLY sold in a case in which the buyer is foreseen to be going to abuse it?

Resp. The solution of this question must be sought from the doctrine which we set forth concerning cooperation in the sins of others. But in particular the rule which we handed down in the same place, n. 312, is valid here, namely: Since evil must not be presumed without reason, hence altogether, a special prohibition of law being excluded, it seems licit for merchants, by the sole title of commerce, to sell their merchandise to any buyer, provided 1° that those wares are indifferent things which can easily have a good use, although many in general abuse them, for example strong liquors, playing-cards, etc.; and 2° provided that in the very purchase or circumstances no evil intention of the buyer appears. But if these two conditions are not verified, the sale will either in no way be licit, or not except from a grave and proportionate cause, as we explained more broadly in the same place, n. 312.

Preliminary matters. - On the nature of the just price and its division.

961. Nature. - Commutative justice demands that in an onerous contract, such as especially is the contract of purchase-sale, equality be entirely preserved between that which is handed over and that which is acquired; for in an onerous contract the contracting parties do not wish to donate, but to exchange and to acquire the equivalent of that which is ceded.

Therefore the just price in buying and selling will be: that sum of money which constitutes the equivalent of the vendible thing, or: that sum of money which adequately corresponds to the value of the vendible thing.

But the value of a vendible thing is not something merely subjective, as if it depended on the arbitrary will of the buyer and seller; rather it is something objective, so that it must principally be taken from the nature itself of the vendible thing, insofar as this is considered, not precisely in its physical being, i.e. according to its substance or physical perfection, but in its usual being, i.e. according to its necessity, utility, or pleasurableness in the common use and society of men. For temporal things have been made by God for the use of men, and to the same end they also are bought and sold by men; so that of themselves they must be said to be worth as much as, with attention to the diversity of times, places, etc., they serve the common use of men.¹ But how much these things serve human use, and how much therefore they are worth, this is left to be defined, not again by the private prudence of the seller and buyer, but either by the judgment of legitimate authority, or by the common opinion of men; so that finally it is permitted to establish briefly thus: The just value of a vendible thing is that which, with attention both to the usual nature of the thing and to the diversity of circumstances of time, place, etc., is defined either by legitimate authority, or, this failing, by the common opinion of men; and consequently: The just price of a vendible thing will be that sum of money which, with attention to the nature of the thing, etc., is taxed either by legitimate authority, or, this failing, by the common estimation, as the equivalent of the vendible thing. From this there now spontaneously flows the following very well-known division of the just price.

962. Division. - The just price is divided into legal and vulgar, or natural. The legal price is that which is established by legitimate authority for the common good of some region, province, or place. The vulgar price is that which is taxed by the common estimation of the inhabitants of the place where the vendible thing exists, (not however where the contract is made, unless the seller agrees that the thing be transferred thither. St. Alphonsus.)² But a twofold very notable difference is usually assigned between these prices, namely:

The first difference. - The legal price is defined punctually or arithmetically; but the vulgar price admits a certain latitude, since the common estimation of men is not wont to agree precisely in one point.² Whence also deservedly Authors subdivide the vulgar price, while remaining within the limits of the just, into the highest or rigorous vulgar price, the middle or moderate, and the lowest or pious. The highest is that above which, the lowest that below which, the thing is not commonly estimated; the middle is that which consists between the highest and the lowest. But how great is the distance or latitude between the highest vulgar price and the lowest, this can be judged rather from the usage of the market and the common sense of negotiators than defined by a fixed measure. Yet regularly the doctrine must be admitted which Moralists are wont to hand down here, namely: That in necessary things and those of more frequent sale, for example: in bread, oil, salt, etc., the lowest vulgar price is little distant from the highest, and thus, for example, if the middle price is 5, the highest will be 6 and the lowest 4, so that only the latitude of two degrees, 6-4, is to be admitted; if the middle price is 10, the highest will be 12 and the lowest 8, so that only the latitude of four degrees, 12-8, is to be admitted; if the middle price is 100, the highest will be 105 and the lowest 95, so that only the latitude of ten degrees, 105-95, is to be admitted; and likewise, with proportion observed, one must judge concerning the rest, yet always attending to the usage of the market or the common sense of negotiators, and moreover observing that the latitude of price is greater in superfluous and more precious things, for example: palaces, villas, etc., whose purchase-sale is infrequent, and greater still in things altogether rare and precious, such as singular gems, ancient pictures or statues, etc., whose value is held as estimated neither from law nor from common opinion. See St. Alphonsus,³ and the things to be said below.

The second difference. - The legal price is stable, so that of itself it remains and is in no way varied unless the law itself ceases, or unless there is given a just reason here and now excusing from the law; but the vulgar price with its latitude is variable, so that at any time it is subject to change, i.e. to increase or decrease, according to the diversity of circumstances which continually tend to vary the common estimation of men; and thus (to assign here the principal circumstances):

1° Price is accustomed to increase from common sense:

a) By reason of the multitude of buyers or the abundance of money, and the scarcity of merchandise; for that is commonly esteemed more which is sought by more persons and found with more difficulty.

b) By reason of the manner of selling goods by retail (retail); for that is appraised higher for whose conservation greater labors, cares, and expenses must of themselves be expended by merchants.

2° On the contrary the price is accustomed to decrease:

a) By reason of the scarcity of buyers or of money, and the abundance of merchandise; for what is less sought and is everywhere found is also estimated at less.

b) By reason of the manner of selling goods together in great quantity (wholesale); for that which of itself demands lesser cares, expenses, etc., of merchants is also commonly judged to be of lesser price.

Therefore, practically speaking, you will say most rightly that the vulgar price is that which, when the legal price is lacking, commonly runs in the present circumstances = the price running here and now (the current price).

With these things premised concerning the nature and division of the just price, now let us inquire a little more accurately, 1° by what price one must of itself stand from justice; 2° what are the titles on account of which sometimes accidentally it is licit to sell above the common highest price, or to buy below the common lowest price.

I. By what price PER SE must one stand from justice?

Let the following three rules serve for the solution of this question:

963. First Rule. - If a vendible thing has a legal price, that must be observed punctually from justice; so that the seller who exceeds the legal price acts unjustly and is held to restitution of the excess.

But for the right understanding and application of this rule, it must be carefully observed:

1° Taxation by law is made for merchandise of common goodness and quality; and therefore the rule concerning the legal price does not obtain if it is a question of merchandise which is notably more precious or worse than usual; but in the former hypothesis the seller can licitly increase the price, and in the latter he must decrease the price.

2° The legal tax must be just and still in force; and hence the rule concerning the legal price again will not obtain, a) if the tax of the law is no longer observed by the greater part of the citizens, with the magistrate silent; and b) if, circumstances having changed, for example on account of sterility, etc., the tax becomes unjust. Cf. St. Alphonsus.¹

3° The legal tax is ordinarily constituted in favor of buyers, so that ordinarily even the seller alone is bound by that tax, and the buyer consequently can licitly buy below that tax, provided he remains within the limits of the vulgar price.

4° The legal tax in these our times is very rare, and scarcely occurs, except in certain places as to bread, or in a city, besieged in time of war, as to things necessary for life. For many political writers judge that nowadays, when there is so great a facility of transporting merchandise by railroad, etc., and so great a competition of merchants is found, it is regularly no longer expedient that the prices of things be taxed legally. Whence also the resolutions of Moralists concerning the legal price will more rarely come into use in our time.

964. Second Rule. - If a vendible thing does not have a legal price, from justice one must stand by the vulgar price running here and now; so that it is not licit to sell above the highest vulgar price, nor to buy below the lowest.² Whence he who sells above the highest vulgar price sins against justice and is held to restitution of the excess; he who buys below the lowest sins against justice and is held to restitution of the defect. Yet, fraud excluded, of itself it is licit to sell at the highest vulgar price, or to buy at the lowest.

It is said: Fraud excluded; for although of itself it is licit to sell at the highest or to buy at the lowest, nevertheless each one has the right not to be deceived by fraud; and therefore one will offend against justice and be held to restitution, even if the highest price has not been exceeded: a) if, once an agreement has been made concerning the middle or lowest price, he secretly obtains the highest for himself by deceiving the buyer in the counting of money, in weight, or in measure; and b) if before the agreement has been made he deceitfully induces the buyer to pay a greater price than otherwise he would justly have given.

Here however observe for practice: commonly faith is not given to the lies or perjuries of sellers, by which they affirm that they procured the vendible thing for themselves at so much, or sold it to others at so much, so as thus to draw the buyer to the highest price; nor to the lies or perjuries of buyers, by which they affirm that they bought the thing from others at so much, or that others offered it to them at so much, so as thus to draw the seller to the lowest price. For it is sufficiently known that sayings of this kind are common stratagems of negotiators, which do not deserve faith, and therefore do not constitute deception properly so called. Whence sellers or buyers of this kind indeed sin by lying or perjuring; but, since in reality by such lies they do not deceive the other, they do not on account of them offend against justice, and therefore will not be held to restitution, always supposing that they do not sell above the highest, or buy below the lowest. Yet if in a particular case it were clear to the aforesaid sellers or buyers that faith was being given to their lies, etc., and that these were truly the cause of a greater or lesser price, then they would not be excused from the fault of deception and injustice. - But as to the manner of acting of many merchants, who ask something above the highest price, so that they may bring buyers, who are accustomed to offer less, to the just price, it seems it must be said: such a manner of acting, as being commonly received, and of itself not mendacious, cannot be condemned of fault; provided however those merchants, where perhaps they obtained what they ask, remit to the buyer that which exceeded the just price.

965. Third Rule. - If it is a question of extraordinary things, whose price is taxed neither by law nor by the estimation of the common people, such as extraordinary gems or stones; singular ancient pictures or statues; rare and precious books; horses eminently beautiful; foreign birds, etc. (so-called rarities), which do not pertain to common human use and society, but to luxury, splendor, and the pleasantness of men, and among which dances, songs, the abuse of a woman, etc., can also be reckoned; the solution of the question concerning the just price is very often quite ambiguous. Indeed I, that I may openly profess what I think concerning this matter, think, saving a better judgment, that this can be established:

Such very rare things can justly be sold and bought at that price concerning which the contracting parties themselves, without fraud and freely, agree, in the following cases:

1° If the purchase-sale is made between parties who both wholly ignore the greater or lesser preciousness of such a singular thing; because in this hypothesis the contract entered is not a simple contract of purchase-sale, but at the same time a quasi-aleatory contract, in which each party commits himself to fortune. Thus, for example, Titius would not be accused of injustice who bought an illustrious ancient picture at a cheaper price from Caius, where both, ignorant of the preciousness of this picture, without fraud and freely agreed concerning such a price.¹

2° If the purchase-sale is made under the spear, i.e. in public auction; because public auction is an extraordinary title (as will be said below), on account of which whatever price, with fraud excluded, is determined by the bidders can be judged just.

Likewise I think it can be resolved relatively to the buyer, namely: that the buyer can justly buy such a thing, although precious and known by him as such, at a cheap price (for a trifle):

a) In the case in which that thing, for example an ancient and precious book, is publicly exposed for sale in the market among antiquarians, i.e. among those who are accustomed to sell antiquated things; because by this very fact that the thing is exposed in the market, it has as it were lost its ancient price, and receives its price from the judgment of buyers who come together to that market, in almost the same manner as we said above concerning things sold in a public auction.

b) In the case in which that thing is now actually destined to a vile use, for example if an ancient book now is being carried to be sold for tearing up, or some picture is now handed over to children for play and soon perhaps will be torn up; for in these circumstances that thing is judged again to have lost its price, and consequently to be able to be bought at that price for which it is commonly worth for that vile use. Thus also it is everywhere asserted by Authors that a buyer, when among common things destined to vulgar use he finds a thing which by chance he knows to be precious, for example a medicinal herb among common herbs destined for the fodder of horses and cows, can justly buy those common things at the price for which they would vulgarly be bought by others for such a use.

c) In the case in which that thing, for example a singular picture, from the common judgment of experts is vile, and the buyer from private study recognizes in it a certain preciousness; for in this hypothesis, since the thing is not accustomed to be esteemed at more by the experts themselves of such a region, it must be ascribed to the fortune and industry of the buyer alone that from this he has known how to procure an advantage for himself.

d) In the case in which that thing, even from the judgment of experts, does not have a stable and real value, such as, for example, a picture of a celebrated master, Raphael, Rubens, etc., is judged to have; but only an altogether volatile and relative value, or the value, as they say, of affection, founded namely in the particular affection of one or another buyer seeking that thing to complete, for example, his singular Museum of such rarities; for no reason appears why the buyer must bring his particular affection into the reckoning for determining the price.

966. • But with the cases assigned thus far excluded, the question concerning the just price of singular things which have neither legal nor vulgar price is greatly controverted among Moralists:

St. Alphonsus¹ with Lugo, Lessius, and others defends as more probable: that in the purchase-sale of a singular thing that price must be observed from justice which is taxed by the persons of such a region skilled in that matter; because justice seems to require that even in these things equality be observed, if it can be observed; but it can be observed where there are experts able to appraise these things. Whence in the purchase-sale, for example, of some singular gem, the judgment would have to be investigated from the jewelers of such a place; in the purchase-sale of a rare picture the judgment of painters, etc. Yet the patrons themselves of this opinion admit that the just price of things of this kind suffers a very great latitude, since a picture has been seen to be taxed by many experts at $500 for which 100 would not be given if it were sold; so that the price of the thing which is here and now to be sold must be taxed, with all concurrent circumstances.

On the contrary Card. Toletus¹ with Navarro, Valentia, Medina, and others defends: that singular things pertaining to the adornment or delight of life, since they do not have a legal or vulgar price, have only the price which they call conventional, i.e. that concerning which the contracting parties, apart from fraud, freely agree; and thus there would not be injustice if someone, for example, received $4000 for an ancient statue, or another similar thing, provided the thing is such as it is sold; in other words: provided there is not error concerning the substance, so that, for example, that which is sold as a gem is not glass. And to this opinion, as to the substance, there also adheres the more recent Anonymous Author in the Book whose title is: Examen Raisonne,² etc. Indeed St. Alphonsus himself³ asserts concerning this opinion that it is rightly called probable by the Salmanticenses.

Therefore, with the described diversity of opinions standing, it will be permitted for practice to say that those are not to be disturbed who in good faith and freely agree according to their own judgment in such things.

II. What are the titles on account of which accidentally it is licit to sell above the highest vulgar price, or to buy below the lowest vulgar price?

Where there will be added a threefold special question: a) concerning goods voluntarily offered; b) concerning anticipated or delayed payment; and c) concerning particular knowledge of a price soon to be diminished or increased.

967. • The titles, extrinsic to sale, on account of which accidentally it is licit to sell above the highest vulgar price, principally are:

1° Damage emerging from the present sale: namely if the seller, from the fact that he sells his thing to the buyer, suffers a damage which he would not suffer if he did not sell the same; for example, if you sell to another an instrument necessary or very useful for the exercise of your art, which afterwards you will not be able to buy except at a higher price.¹

2° Profit ceasing from the present sale: namely if the seller, from the fact that he sells his thing to the buyer, loses profit which he would obtain if he did not sell the same; for example, if now you sell grain to another which you were going to reserve for the time in which grain will be worth more.

3° Peril or some other inconvenience, estimable by price, arising from the present sale; namely if the seller, from the fact that he sells his thing to such a buyer, is truly exposed to the peril of never receiving the price from the same, either in whole or in part; or to the peril of not receiving the price from the buyer except with extraordinary expenses.

But for the just practical use of these titles it must be carefully observed that Moralists commonly require: a) that the seller forewarn the buyer concerning titles of this kind, insofar as he can, if he wishes, procure that thing for himself by another way; and b) that the seller, by force of such titles, not sell the thing for more than the titles themselves are worth by prudent estimation. Indeed not a few still require, c) that the seller sell the thing at the instance or in favor of the buyer; and hence, according to them, the seller could not justly sell for more if he sells only to provide for his own necessities, although from this sale he would suffer emergent damage or ceasing profit; because in the case the seller himself, and not the buyer, seems to be the cause of such emergent damage, etc. "But," says St. Alphonsus,² "the opposite seems more probable to me; ... because the buyer, by accepting the contract, now himself is the true cause of the seller's damage."

4° Special affection of the seller toward the thing itself sold; for the privation of a thing toward which the owner is singularly affected, for example because he received it from a Prince or from his ancestors, is deservedly judged estimable by price; and therefore in the case the seller will licitly be able to exceed the vulgar price by as much as that affection is reasonably estimated. Yet here again, as we noted above concerning other titles, it is required that the seller forewarn the buyer concerning his special affection, etc.

Moreover, it is necessary that you by no means confuse with the aforesaid title of the special affection of the seller the special affection of the buyer; for according to the opinion very common among Theologians, especially the older ones, the special affection (I do not say of many buyers, but) of the present buyer as an individual is not a title by which alone it is licit to sell a thing dearer; because on this title alone the seller would unjustly exact a price for that which is not his.¹ "If someone," says St. Thomas,² "is helped much by the thing of another which he has received, but he who sells is not damaged by being without that thing, he ought not to sell it at a higher price; because the utility which accrues to the other is not from the seller, but from the condition of the buyer. But no one ought to sell to another what is not his, although he can sell to him the damage which he suffers." - And indeed this opinion is admitted as certain by any Theologian even more recent, indeed also by any fearful seller, whenever the discussion is about the case in which the present buyer is specially affected toward the thing sold by reason of necessity or want (on account of necessity or present embarrassment); since everyone understands how injurious it is to wish to grow rich precisely from the head of the necessity or want of one's neighbor. But whenever it is a question of a case in which the buyer is specially affected toward the thing, not by reason of necessity, but only by reason of utility, convenience, or delight, which the thing will procure for him, the same opinion scarcely seems to harmonize with the usage, sufficiently common nowadays, by force of which sellers commonly in such a case exact an increase of price from the buyer. Whence a doubt arises: whether this usage can be tolerated, or rather, with prudence leading, must be reproved as an abuse and corruption? Indeed I judge, with some more recent Doctors, that this sufficiently common usage can be tolerated, at least in the hypothesis that the thing toward which the buyer is specially affected by reason of utility, etc., is judged from today's vulgar estimation to have a certain greater real value, although relative, for example that the field of Titius has a greater real value relative to the neighboring estate of Caius. Indeed I would think that this usage in this hypothesis cannot be said to be diametrically opposed to the opinion of St. Thomas related above, since it supposes that the utility accruing to the buyer arises from the singular condition of the buyer; and therefore also grounded, it seems to me, is the resolution which the learned Kenrick,¹ having first alleged and admitted the opinion of St. Thomas, hands down in these words: "if from the circumstances it is clear that the thing is commonly esteemed at more on account of that special utility which it will bring to the buyer, it will be licit to ask a greater price. Thus sometimes a small field, which of itself is worth little, and provides almost no utility to the owner, is of great value to the owner of the neighboring estate: and therefore it is justly sold for that price which seems fair to most, that matter being considered."

Besides, in general it will still be useful to have noted that nowadays, on account of the changed circumstances of the times, the special affection of the buyer by reason of utility, etc., occurs more rarely, one or another singular case excepted, at least nakedly and simply, i.e. without another accompanying title. For now there is so great a competition in commerce, so great a facility of acquiring merchandise of any species, so frequent and variable an alienation of the same things, for example of the same fields or houses, that either special affection toward such a determined thing is scarcely given, or at least there is a plurality of buyers.

5° Finally, the fifth title for justly exceeding in sale the highest vulgar price is the manner of selling under the spear, or public auction; for in such an auction whatever price is freely and without fraud determined by bidders is judged just, as will be explained more broadly in Art. II, where sale in species is treated.

968. • Besides the five titles assigned thus far, by many Authors there are still assigned: scarcity of things, multitude of buyers, abundance of money, manner of selling in small quantity, etc. But circumstances of this kind, strictly speaking, are not titles of exceeding the vulgar price; rather they are only causes on account of which the vulgar price increases from common estimation, without ceasing to be vulgar. Whence the seller, demanding a greater price in the aforesaid circumstances, in reality does not sell above the vulgar price; but observes the price here and now vulgar, or here and now running. See above n. 962.

969. • The titles on account of which accidentally it is licit to buy below the lowest vulgar price especially are:

1° Damage emerging from the present purchase. 2° Profit ceasing from the present purchase. 3° Peril or some other inconvenience, estimable by price, arising from the present purchase, for example the peril of never receiving from the seller the thing sold, for which the price has already been paid by the buyer. 4° Sale under the spear, or public auction; to which here sale made by dealers in old things seems able to be assimilated, since things exposed among them are judged to have lost their ancient price, and to receive another price from custom or the agreement of the contracting parties.

The further explanation of the aforesaid titles will be open by itself to anyone from those things which were noted in Point I concerning the same titles, considered relatively to the seller.

970. • But with the titles assigned on account of which accidentally it is licit to buy below the lowest vulgar price, there are again joined by various Authors: scarcity of buyers, abundance of merchandise, manner of selling in great quantity, etc.; but these or similar circumstances indeed cause the vulgar price to decrease from common estimation, but by no means constitute a title of buying below the lowest price running in the aforesaid circumstances. See above n. 962.

Note. - For the completion of the doctrine concerning the just price there remains for us a threefold question to be solved, already indicated at the beginning of this section, namely:

971. • Query 1° Whether it is licit to buy more cheaply voluntary goods, i.e. goods voluntarily offered by the seller seeking buyers?

Resp. Since a voluntary offering of merchandise, from things commonly occurring, argues either scarcity of buyers and abundance of merchandise, or danger of a latent defect or of a cloaked excellence, etc.; hence the common opinion has prevailed that the common proverb is just: Goods voluntarily offered become cheap; and this more probably, says St. Alphonsus,¹ by a third part. - But this resolution is valid not only in the case in which the voluntary offering of merchandise is made by the seller by reason of acquiring profit, as is wont to be done by sellers going through the streets and houses with their merchandise; but probably also, with strict justice considered, it seems able to be admitted (although it ought not to be advised) in the case in which a voluntary offering is made by the seller by reason of poverty by which he is pressed (provided it is not a question of such things which are commonly bought and offered, as grain, oil, and similar things); for the want of the seller does not effect that the price is changed. Yet we said notably: with strict justice considered; for, as St. Alphonsus¹ deservedly observes, the buyer will easily sin against charity if he buys more cheaply a thing voluntarily offered by a poor man pressed by necessity, not solely in favor of the poor man, but for his own utility, for example because he himself needs that thing, etc. The Lydian stone, by which it is necessary to examine the honesty of such contracts, is not, as the most wise Pontiff Benedict XIV insinuates, rigorous justice alone, but in addition Christian charity.

972. • Query 2° Whether because of delayed payment a THING CAN BE SOLD ABOVE THE HIGHEST VULGAR PRICE, - OR because of anticipated payment BOUGHT BELOW the lowest?

Resp. Delayed or anticipated payment is considered by very many Theologians as a virtual loan; so that one selling on credit or with delayed payment (on credit) can by this very fact be judged as it were to lend money to the buyer for the time of credit or delayed payment; and similarly, one buying with anticipated payment can by this very fact be judged as it were to lend money to the seller for the time of anticipation. And therefore the doctrine concerning a loan is usually applied by the same Theologians to delayed or anticipated payment, which is reduced here to a few points:

a) It is illicit to receive an increase of the principal, i.e. more than was given in loan, immediately from the loan, or by force of the loan alone. Consequently it will also be illicit to receive profit, or to sell more dearly precisely on account of delayed payment, or to buy more cheaply precisely on account of anticipated payment.

b) On the contrary it is licit to receive some proportionate increase on the occasion of a loan on account of a just title extrinsic to the loan, namely on account of emergent damage, ceasing profit, or peril of the principal. Consequently it will also be licit, proportion being observed, to sell a thing more dearly on the occasion of delayed payment, or to buy more cheaply on the occasion of anticipated payment, on account of emergent damage, ceasing profit, or some other peril estimable by price, provided the buyer is warned of these in the first hypothesis, and the seller in the second hypothesis, according to the things said above in n. 967. - Moreover many¹ still defend as probable relatively to delayed or anticipated payment, that it is also licit on the occasion of delayed payment to sell more dearly, and on the occasion of anticipated payment to buy more cheaply by the title of custom and vulgar estimation of the place, namely: if in such a place there is in force the custom of selling on credit, and, this custom standing, goods are commonly estimated at more, since for buying thus a plurality of buyers is wont to come together, and in that plurality there is the peril lest the price more often be lost; or similarly, if in such a place there is in force the custom (rare indeed) of buying with anticipated payment, and, this custom standing, goods are commonly estimated at less, since then regularly there occurs a scarcity of buyers and a plurality of sellers. - But observe that this resolution of many, strictly speaking, turns outside the question proposed above; since in the supposition of this resolution the price of the merchandise increases or decreases from vulgar estimation; so that in the proper sense it is not sold above the highest vulgar price, or bought below the lowest, as is understood of itself from the things handed down above, n. 962.

c) Finally, by some more recent authors there is defended a thesis, formerly more rarely heard in the schools, but nowadays, as they say, on account of so great a change (comparatively to former times) of the use of money in commercial and industrial business, becoming more prevalent, namely: that, the titles assigned thus far excluded, neither does it seem illicit, on the occasion of a loan of money, and therefore also on the occasion of delayed or anticipated payment, to receive some proportionate increase by the title of the use of money granted to another; since the very use of money, according to them, in the present state of commerce and industry, can be judged estimable by price, except only the case in which it is a question of the poor, to whom money is lent for consumption and to relieve their want. - But whatever may be the case concerning the value of this opinion, it will surely be permitted without hesitation to defend as probable: that, the titles alleged above excluded, on the occasion of a loan of money, and therefore also on the occasion of delayed or anticipated payment, some proportionate increase can justly be received from the non-poor according to the rate of civil law, or, this failing, according to the vulgar rate.

973. • Query 3° Whether he who by PRIVATE knowledge knows that the price of merchandise is shortly to be increased or diminished can nevertheless sell or buy at the price running here and now?

With the warning premised that here it is not a question of the case in which someone secretly knows that the price of a thing is soon to be diminished on account of an intrinsic defect of it already existing, for example, the price of some debt soon to be diminished because the debtor is already unable to pay; but only of the case in which someone privately knows that the price of a thing is soon to be diminished or increased on account of some extrinsic cause, for example, that the price of public securities (bonds) is soon to be diminished or increased by reason of certain events certainly or probably future:

Resp. Affirmatively, provided fraud is absent and injury to charity. For, as St. Thomas rightly notes,¹ "The seller who sells a thing according to the price which he finds does not seem to act against justice if he does not disclose what is future." For one must regard not the future value, but the present value; and the present value is not varied by some particular knowledge. For the same reason it will also be licit for the buyer to buy merchandise at the current price, although he privately knows that the price is soon to be increased; and thus, for example, according to the testimony of Genesis,² Joseph, knowing the future sterility on account of which the value of grain was to be increased, bought a great abundance of it at the current price and stored it away.

I said: a) provided fraud is absent; for it cannot be doubted that such sale or purchase is unjust if it is caused by fraud or deceit, for example by spreading through public newspapers or a telegraphic report false rumors of a price soon to be diminished or increased, etc., as nowadays, alas, is practiced rather frequently, especially relatively to public securities.

I said: b) provided injury to charity is absent; for sometimes it would more or less be repugnant to charity to buy or sell in such a way, namely: if the other party were thereby thrown into grave necessity, or even if the thing could easily be sold to many or bought from many, and is sold to one or bought from one, who therefore alone will suffer the whole damage. Nevertheless, excepting singular cases of this kind, charity does not seem to urge. Indeed it is of more abundant virtue, says St. Thomas,¹ if the price is diminished; but, strictly speaking, he who uses his right, justly providing for his own affairs, does not injure charity, although another by accident suffers damage from this.²

974. Practical observation. - Finally concerning the matter of the just price it is useful still to note that regularly, unless I am mistaken, the confessor will not wander from the right way who, in so manifold a variety of cases pertaining here, attends chiefly to that which, according to the judgment of prudent men, is wont to be done in contracts in which no fraud and bad faith intervenes.

Besides the obligation of observing the just price, there are many obligations incumbent on the seller, of which some pertain to the manifestation of defects of the merchandise; others to handing over (delivery); and others to assurance (warranty).

I. On the obligation of the seller to manifest the vices or defects of the merchandise.

975. • The seller, relatively to defects of merchandise, is generally obliged cautiously to avoid every fraud by which the buyer would be unjustly deceived. But the seller can commit fraud relatively to the defects of his merchandise in two ways, namely: positively or negatively.

a) He commits fraud positively when he deceitfully hides the defects of the merchandise, and that either by words or by deeds. By words indeed, if he falsely asserts that his merchandise is entirely without a defect of some moment, with which nevertheless it is in reality infected, for example if he asserts that a horse is very tame, while in reality it is furious; but not if he merely extols his merchandise in general according to the usage common to merchants, by which buyers are regularly not deceived, as we have already observed above in n. 964. By deeds, if by art, which they call mangonium, he brings it about that his merchandise appears notably better than it really is, for example if he puts much more selected grain on the top of the sack, as if the whole is of the best quality; if he pours a small drop of mercury into the ears of a slower horse, so that it appears much more noble and lively; if he seeks a corner and darkness, lest the defect of his merchandise be detected; if he sprinkles wool with water, so that it becomes of greater weight, etc. Yet all these things, as Billuart rightly notes, must be accepted with this moderation: unless such an artful manner of acting is common and sufficiently known to buyers, as it is known to all that merchants are accustomed to give their goods some slight coloring and to place the better things on the outside; for in that hypothesis buyers again are not properly deceived.

b) The seller commits fraud negatively when he does not manifest the vices of the merchandise known by him, whenever he is held to manifest them. But whenever he is held to manifest those vices, this is a rather difficult question; for its solution let there be the following brief treatment:

976. On the vices of his merchandise known by him which must be manifested by the seller. - The vices of merchandise can be of a threefold kind:

1° A vice concerning the substance, i.e. concerning the thing itself which is sold, so that this is altogether diverse from that which of itself and principally the buyer intends, for example if glass is sold for a gem, brass for gold, water for wine, etc.

Yet carefully observe here that not every physical diversity constitutes a vice concerning the substance in purchase-sale; for in this contract, as was said above in n. 961, the thing to be sold is considered not so much in its physical being as in its usual being; and therefore it not rarely happens that two things, diverse in physical substance, are not judged substantially diverse in commerce, whenever they have the same uses and the same effects. Wherefore, when we treat of a vice concerning the substance, we do not take substance in the absolute sense, but in the relative sense, namely: in order to human use and the end for which it is bought.

2° A vice concerning quantity, i.e. concerning number, weight, or measure, for example if a cask of wine which contains only forty measures is sold for forty-five.

3° A vice concerning quality, i.e. concerning an accident affecting the use and utility of the thing more or less, for example if a slow horse is sold as fast, new wine as old, a diseased sheep as healthy, etc.

Now indeed, for this threefold kind of vices, a threefold distinct resolution must also be given:

977. Resolution I. On a vice concerning substance. - If the vendible thing labors under a vice concerning substance, without doubt the seller must manifest that vice to the buyer; because such a vice, unknown by the buyer, altogether impedes his consent, required for the validity of the contract. Whence the seller who sells to another a thing substantially vitiated without sufficiently detecting that vice acts fraudulently and from justice is held, at the will of the deceived buyer, either to rescind the contract, or at least to restore the excess of the price, and moreover to compensate the damages following to the buyer from his deception, provided they were foreseen to some extent. - But for the right understanding of this rule it is again permitted to warn that in it there is question only of a thing substantially vitiated relatively to human use and the end for which it is bought; and hence the aforesaid rule does not seem able to be applied to the case in which the seller hands over, as they say, quid pro quo, i.e. for one thing another equally or almost equally useful thing, for example to the case in which a pharmacist, instead of the prescribed medicine which he does not have at hand, hands over another medicine of the same utility. Yet observe with St. Alphonsus¹ that the seller, in order in the case to be excused from the stain of injustice, must a) be certain, not doubtful, concerning such equality of utility, and b) diminish the price insofar as the thing handed over perhaps is worth less.

978. Resolution II. On a vice concerning quantity. - If the vendible thing labors under a vice concerning quantity, the seller is again held to manifest it to the buyer, at least by diminishing the price for the defect of quantity. For although such a contract of itself is not invalid, provided the consent concerning the substance remains safe; nor even can it of itself be rescinded at the will of the buyer, unless deceit gave the true cause of contracting; nevertheless this contract is certainly illicit and unjust by reason of the deceitful excess in the price, which therefore must be restored to the buyer. Whence it is said in the book of Deuteronomy:² You shall not have in the bag diverse weights, a greater and a lesser, nor shall there be in your house a measure greater and lesser. ... For the Lord abominates him who does these things, and detests every injustice. - Yet probably it will be permitted to except from the proposed resolution the case in which the seller, using right measure, cannot obtain the just price on account of the injustice of the legal tax,¹ or on account of an unjust monopoly of buyers agreeing among themselves not to offer the just price. For in this case, according to the opinion of many, he can licitly use a measure defective to the extent in which it reaches the price, yet only the lowest price, and thus justly free himself from unjust oppression. St. Alphonsus.²

979. Resolution III. On a vice concerning quality. - If the vendible thing labors under a vice concerning quality, first, generally, we think it must be resolved: the seller is obliged from justice to manifest that vice when the buyer seriously questions him concerning such a vice, and thus sufficiently shows that he either does not wish at all to buy the thing infected with such a vice, or at least not at so great a price; for in this hypothesis the vice concerning quality would redound into the substance, and would remove the consent of the buyer either in whole or at least in so much; so that the seller, by concealing the truth in the case, is guilty of fraud, and must undergo the consequences of this fraud. - Nevertheless, if the buyer were to question only in general, no obligation of justice seems to be present for indicating vices of lighter moment; for such a general question is not accepted in so much rigor, since scarcely any thing exists which is plainly immune from every defect. - Note. On the mode by which a seller obliged to manifestation of a vice can satisfy this obligation, see below.

980. • But supposing that the buyer does not question the seller in any way; before all things it is necessary to attend whether the vice not asked about is patent or occult; and if occult, whether it must be judged notable or not notable; and with these things attended to it will be possible to resolve:

981. A) On a patent vice. - If the vice is patent, so that it can generally be known by anyone with common diligence, for example if a horse is one-eyed, the seller, not questioned, is regularly not held to indicate it to the buyer, at least from justice; provided he does not exceed the just price of the thing. For where the thing itself speaks, there is no need of the voice of the seller; and the buyer, if by his negligence perhaps he does not advert to such a vice, must impute this to himself.

I said: 1° regularly he is not held; for accidentally the seller, even from justice, must detect a vice patent of itself, namely when it is certainly clear to him that the buyer, on account of manifest inexperience, dullness, etc., morally speaking, cannot advert to that vice; because then the vice is judged occult respectively to such a buyer, and therefore to be manifested whenever occult vices, as will soon be said, must be manifested.

I said: 2° regularly he is not held at least from justice; for sometimes charity will demand that the seller, if he can without grave inconvenience, warn the negligent or imprudent buyer, at least after the contract, namely if the seller sees that damage or peril from the thing bought is imminent for the buyer by reason of his negligence.

982. B) On an occult notable or redhibitory vice. - If the vice is occult and at the same time notable, i.e. if a vice not knowable by common diligence renders the vendible thing harmful, useless, or notably less useful for the end for which, in the present circumstances, it is commonly accustomed to be bought, the seller must open it from justice; for otherwise the buyer is not judged to have consented to the purchase or at least to the price of the purchase. - Whence sellers are guilty of malicious fraud, and are bound by the obligation of restitution, who sell to another a thing laboring under a vice here and now occult, by which its use and service is impeded, for example those who sell to another a horse here and now latently infected with the vice of stubbornness (stubbornness); who sell an ox secretly already laboring under pulmonary consumption, or a sheep latently scabby, or a secretly rancid pig; likewise those who sell garments or shoes apparently good, but made from burnt cloth or leather, and therefore unfit for sufficiently durable use; likewise those who sell medicines harmful or useless from a latent defect, etc.

But note well the words printed above in italics: for the end for which, in the present circumstances, it is commonly accustomed to be bought; for if the thing is sufficiently apt for usual ends of this kind, the seller is not held of himself to inquire whether perhaps the buyer has another special or extraordinary end, for which the thing would be harmful or unfit; but on the contrary he rightly presumes the usual ends, unless another end of the buyer becomes manifest to him either explicitly, or at least implicitly from the circumstances of things. Whence, selling at a just price an ox excellent for slaughter, but unfit for the plow, he is not held to indicate to the buyer that the ox is unfit for plowing, except only the case in which it would be clear to the seller from the express words of the buyer or from his known condition that he seeks the ox solely for the end of plowing; for then the seller, by keeping silent about the unfitness of the ox, does not seem excused from every injury; although that injury is not reputed grave where the buyer can easily and without inconvenience or damage accommodate the ox to another use, or resell it to others at an equal price. - But that sometimes, at least after the contract, there can be given some obligation of charity, is sufficiently clear from the things said above in n. 981 at the end, and it will again be clear from the things to be said in the following resolution:

983. C) On an occult, non-notable, or non-redhibitory vice. - If the vice is occult, but not notable, so that it does not render the thing harmful or notably less apt for usual use, for example if a sheep labors under some contemptible little fever; if garments or shoes are made from cloth or leather somewhat weaker, yet sufficiently durable; the seller, not questioned, is bound by no law of justice to manifestation of such a vice, even a most occult one, provided he observes a proportionate price. For this seems abundantly clear from the common use and practice even of the fearful, concerning which buyers reasonably cannot be unwilling; since otherwise all commerce among good citizens would be overturned to the detriment of society.

Nevertheless, if the seller accidentally were probably to suspect that the buyer, ignorant of the vice, wishes to keep the thing longer than it can be kept, or wishes to resell it to a third party for more than it is worth, then the seller, although not questioned, would have to warn the buyer, at least from charity, after the contract, to prevent damage or peril otherwise likely to be imminent for him or for others. And thus, for example, as de Lugo notes, if you sell wine which indeed cannot be kept long, but nevertheless in that state which it still has is commonly sold at such a price for daily use; nor does the buyer show that he seeks the wine for keeping, but, having tasted the wine beforehand, buys it; you do not seem obliged from justice to state the peril. But if you probably feared that the buyer perhaps wishes to keep it longer, then it will be necessary from charity to warn the buyer through yourself or through another, so that he use the wine shortly, at least if you can without grave damage to yourself.

984. Questions. - Query 1° In what mode can a seller, obliged from justice to manifest the vices of merchandise, satisfy this obligation?

Resp. He can satisfy this obligation not only if he sincerely and by name assigns the vices of the merchandise; but also generally, a) if he sells his goods in such circumstances that their defectiveness ought of itself to be understood or presumed by the buyer, for example: if he sells as a dealer in old things; and b) if he simply and candidly asserts that he is unwilling to render an account concerning any vice whatever, but sells the thing as it is; for by a protestation of this kind the seller regularly sufficiently warns the buyer to look out for himself. And hence deservedly, from the opinion of St. Alphonsus,¹ the custom is tolerated, which is in force somewhere, especially at great fairs, that animals are sold thus, even if the vices are most occult; for, to remove lawsuits and to promote the common good, this is sufficiently made honorable by custom; provided (which must cautiously be kept before the eyes) the thing is not sold beyond the just price, at least the highest, with the account of that occult vice having been had.

Note. - On this occasion it deserves also to be observed what St. Alphonsus² warns concerning the justice of contracts in general, namely: "If some contracts are found, by use through a long time in some region; ... the confessor ought not to condemn them, unless first all the circumstances have been inspected; since at first sight many contracts appear usurious or unjust; but afterwards, the matter having been weighed better, they are not to be held as such."

985. • Query 2° What must be resolved concerning merchandise with which another cheaper merchandise has been mixed?

Resp. Attending to the various opinions which are found among Authors concerning this matter, indeed in practice I would not dare to condemn the seller of the sin of injustice and oblige him to restitution who makes mixtures commonly accustomed to be made, and asks for merchandise so mixed the price commonly accustomed to be exacted. Yet such mixtures or corruptions are not to be excused which render things notably worse for the end to which they are destined, as would happen if things by reason of mixture no longer retain that goodness with which buyers of such things are accustomed, or, on account of universal custom, almost must be content. Besides, it is necessary to confess that any commixture, even of itself not strictly unjust, nevertheless is commonly illicit, as being opposed to good faith and the security of commerce; unless the mixture is made from a reasonable cause, for example: so that a just price may be obtained, which otherwise could not be obtained on account of the extraordinary goodness of the merchandise, on account of the unjust taxation of the Magistrate, on account of an unjust conspiracy of buyers, or on account of common use.

II. On the obligation of the seller as to the handing over of the thing sold.

986. • The seller by every Law is obliged to the handing over of the thing sold; unless perhaps that obligation has ceased from a legitimate cause, for example because the buyer does not pay the price, or because after the purchase he has made cession of goods.

By our law concerning it these things almost are to be observed.

I. If it is a question of immovables, a solemn contract is required (a deed).

II. If it is a question of movables a) "A delivery to the carrier, or to the agent of the buyer, is a delivery to the buyer himself." b) "As to the time of delivery and payment, the rule is, that when no time is agreed upon, they are concurrent acts to be performed forthwith." c) "When no place of delivery is specified in the contract, the law implies that it is the place where the article is at the time of sale."¹

III. On the obligation of the seller as to the assurance of the thing sold (warranty).

Note. - What we are going to say concerning assurance, we shall say resting only on natural law, since the laws of the various States concerning this matter differ much among themselves and are changed day by day.

987. • Every seller of himself is judged to sell and hand over only such a thing as can be safely possessed by the buyer and applied to the destined use; and therefore also every seller of himself, unless the contrary has been stipulated, is held to assure the thing sold to the buyer (to warrant), i.e. to provide that the buyer can possess the thing bought quietly, and enjoy it.

But since tranquil possession of the thing is taken away by eviction, and enjoyment of the thing by vices of such a kind as make the thing altogether or at least notably unfit for the destined end (which vices in Law are called redhibitory vices), hence a twofold assurance is distinguished, owed by the seller, namely a) assurance against eviction of the thing (warranty of the title), and b) assurance against redhibitory vices of the thing (warranty of the quality).

With these things posited generally, let us now note a few things concerning each species of assurance singly.

A. On assurance against eviction.

988. • Query 1° What is eviction?

Resp. Eviction is the legitimate disturbance of the buyer in the possession of the thing which he bought; by force of which the buyer must return the thing bought by him, either totally or partially, to some third party, who namely proves certainly that it, either totally or partially, is his, or at least that it is burdened by his real right, for example, the right of hypothec; and who therefore legitimately seeks back what is his, standing in the principle of natural law: the thing cries out to its owner, or in addition standing in the sentence of the judge, according to the terms of civil law decreeing eviction. E.g. if Titius bought from Caius, and, handing over having been made, now possesses some house, which afterwards Jacob validly proves not to have pertained to Caius, but truly to be his own, and which therefore he legitimately reclaims from Titius; then there is eviction with respect to Titius, who must return that house to Jacob legitimately reclaiming it, and thus is justly despoiled of the thing bought by him, or, as Jurists say, is evicted of the thing bought by him.

But from the given description of eviction it is clear that it can not unsuitably be distinguished a) into total and partial, according as the buyer is evicted of the whole thing or only of part of it; and b) into natural and juridico-civil, according as it is founded in the law of nature alone, or moreover in civil law applied by the judge.

S. Th. II-II, q. 77.

511. Purchase-sale (achat et vente; koop en verkoop) is the type of an onerous contract. - Purchase is an agreement of price for merchandise; sale is an agreement of merchandise for price. They are two partial correlative contracts making one whole. Purchase-sale is defined as a bilateral onerous contract by which the dominion of some thing is transferred for a determined price, or a contract constituted by mutual consent for handing over merchandise into dominion for a determined price, and price for merchandise (a. 1582). It is called:

1. a bilateral contract, and thus is distinguished from donation;

2. onerous, that it may be distinguished from loan for consumption and loan for use;

3. by which dominion is transferred: thus it is distinguished both from a promise of sale, by which no dominion or right in the thing is transferred, and from letting-hiring, by which only use alone is transferred;

4. of some thing or merchandise, that it may be distinguished from exchange, by which money is given for other diverse money;

5. for a determined price: thus it is distinguished from barter, by which merchandise is exchanged with merchandise. But it is necessary that the price be determined: for if it is left to be determined by the buyer, the contract is null.

Therefore three conditions are required for the essence of this contract:

a) the mutual consent of one who buys and of another who sells, unto the transfer of dominion;

b) a thing determined as merchandise, that is, a thing estimable by price, whether movable or immovable; and thus sale is distinguished from exchange, in which one kind of money is exchanged for another kind of money, for instance French for English, silver for gold;

c) money determined as the determined price of the merchandise; and thus purchase is distinguished from simple barter, in which merchandise is given for merchandise, for example, a horse or ox for sheep.

Money, constituted by universal agreement, is the common measure of the value of things and thus a suitable means for comparing things with one another and exchanging them. Today it consists of coins or monies of gold, silver, etc., or of bank notes representing them; but in the first times it consisted of many other things, such as skins, ivory, shells, fish, cattle. Hence the name money (pecunia) is taken from cattle (pecus); and among certain nations coins were marked with the head of cattle.

512. Sale by its nature is a consensual contract, which is completed by the consent alone of the parties (a. 1583), so that the contract has force at once, before the thing has been handed over or the price paid. Therefore from the moment of mutual consent the dominion and risk of the thing are with the buyer; and the thing perishes for the buyer, unless it perishes by an intrinsic defect (a. 1647), or unless it happens from culpable delay of the seller because it was not handed over in due time (a. 1138-1141).

Exceptionally, however, sale is not completed by the consent of the parties:

a) if it is explicitly stipulated thus in the contract;

b) when things are not sold in bulk, but according to weight, number, and measure, for tasting or testing: then the contract will not be perfected until the things have been weighed, numbered, measured, tasted, and tested (a. 1585-1588);

c) if positive law so establishes generally: thus formerly Roman law; today, however, this obtains only in German and Austrian law. Then, namely, sale is not perfected until the thing has been handed over.

In these cases, as long as the sale has not been perfected, dominion of the thing and risk are with the seller, and the thing perishes for the seller.

523. For what causes can purchase-sale be dissolved? - Resp. according to art. 1658:

a) by mutual consent, the things still being entire; - b) on account of fraud, error, fear, as was explained above; - c) on account of defect of the thing sold; - d) by fulfillment of a resolutory condition, if the contract was entered under it, for example, for the case of death; - e) if the thing was sold for a price much cheaper than is just: for then the seller is considered deceived concerning the value of the thing sold. This rescission by our civil law is conceded only for immovable things, and indeed not to the buyer (a. 1683), but to the seller alone, if he has been injured beyond seven twelfths (7/12) parts of the price (12,000-5,000 fr.), even if he has renounced his right (a. 1674 sq.).

In other cases civil law denies an action for rescission of the contract or for reparation of damage, to avoid lawsuits being multiplied too much; one must not conclude from this that the price is just in the forum of conscience. For in conscience every unjust notable injury must be repaired; for, as St. Thomas says (a. 1, ad 1): "human law is given to a people in which there are many deficient from virtue; but it is not given to the virtuous alone. And therefore human law could not prohibit whatever is against virtue; but it suffices for it to prohibit those things which destroy the living together of men; but other things it holds as quasi-licit, not because it approves them, but because it does not punish them. Thus therefore it holds as quasi-licit, inducing no penalty, if without fraud the seller oversells his own thing, or the buyer buys more cheaply, unless the excess is too great, because then human law compels one to restore... But divine law leaves unpunished nothing which is contrary to virtue. Whence according to divine law it is reckoned illicit if in purchase and sale equality of justice has not been observed; and he who has more is bound to recompense him who has been harmed, if the damage is notable. I say this for this reason: because the just price of things is not punctually determined, but consists rather in a certain estimation, so that a small addition or diminution does not seem to take away the equality of justice."

Hence, although an action for rescission on account of injury is conceded by law to the seller alone, nevertheless natural justice demands that even a gravely injured buyer can exact in conscience reparation of damage, or perhaps even rescission of the contract.

524. Remarks. - A. From our law, in order that the price of the thing sold can be exacted, there is required an act before a notary or under private writing (sous seing prive), so that before a judge the obligation of paying a sum beyond 1500 francs may be established (a. 1341 modified); otherwise it does not admit proof; - unless there is question of commercial agreements (Commercial Code, a. 25), for which every proof has force. Such an act evidently is not required for inducing an obligation of conscience, and therefore he acts unjustly who does not fulfill the conditions of the contract because no writing concerning it can be brought forward.

B. Canon law establishes certain special things for the alienation, exchange, and sale of ecclesiastical goods.

Can. 1530: 1. With due regard for the prescription of can. 1281 (concerning relics and precious images not to be alienated), for alienating ecclesiastical things, immovable or movable, which by being preserved can be preserved, there is required: 1. an estimation of the thing made in writing by upright experts; 2. a just cause, that is, urgent necessity, or evident utility of the church, or piety; 3. license of the legitimate superior, without which the alienation is invalid.

2. Other opportune precautions also, to be prescribed by the superior himself according to diverse circumstances, are not to be omitted, so that damage to the church may be avoided.

Can. 1531: 1. The thing ought not be alienated for a lesser price than that which is indicated in the estimation.

2. Alienation is to be made by public bidding, or at least made known, unless circumstances suggest otherwise; and the thing is to be conceded to him who, all things considered, has offered more.

3. Money received from alienation is to be placed cautiously, safely, and usefully for the advantage of the church.

Can. 1534: 1. A personal action belongs to the Church against him who has alienated ecclesiastical goods without the due solemnities and against his heirs; but a real action, if the alienation was null, against any possessor whatever, with due regard for the buyer's right against the one alienating badly.

2. Against the invalid alienation of ecclesiastical things there can act the one who alienated the thing, his superior, the successor of each in office, and finally any cleric ascribed to that church which has suffered damage.

Can. 1539: 1. In the sale or exchange of sacred things no account of consecration or blessing is to be had in the estimation of the price.

2. Administrators can exchange securities payable to bearer, as they call them, for other securities more or at least equally safe and fruitful, with any species of commerce or negotiation excluded, and with the consent of the Ordinary, the diocesan council, and others whose interest it concerns.

Can. 1540: Immovable goods of the church are not to be sold or leased to their own administrators and to those joined to them in the first or second degree of consanguinity or affinity without special license of the local Ordinary.

531. Retrovendition, or sale with a pact of redeeming (avec faculte de rachat ou de remere; met recht van wederinkoop) is that in which the seller reserves to himself the faculty of recovering the thing within some time.

Considered according to natural law, such a sale can be made:

a) in favor of the seller, that is, on this condition, that if it pleases the seller, the buyer is bound to sell the thing back to the seller;

b) in favor of the buyer, that is, on this condition, that if it pleases the buyer, the seller is bound to buy the thing again;

c) in favor of a third party, so that if it pleases the seller, some third party has the right of buying the thing in question.

A pact of this sort contains nothing unjust of itself, provided that in the fixed price account is taken of the burden imposed, which is estimable by price, and due equality is preserved. Hence the price must be diminished if the pact of redeeming is made in favor of the seller or of a third party, because a burden is imposed upon the buyer; on the contrary, it must be increased if the pact is made in favor of the buyer; if it is in favor of both, the mean equality of price is to be observed. This being posited, the pact is licit: for when the seller alienates his own thing, he can add whatever honorable condition, even though burdensome. Thus of itself, and apart from the intervention of positive law.

Many things indeed can be said concerning the nature of this contract, concerning the justice of price, and concerning the diverse species of sales and purchases, but we briefly indicate only those things which can be necessary for the confessor. For the office of hearing confessions is not to be confused with the office of conducting trade.

Retrovendition is a contract by which the seller reserves for himself the right of redeeming his own thing, under the condition that he compensate the expenses, improvements, or similar things. But mohatra is a certain species of retrovendition, or a contract by which someone sells a thing at a greater price on credit, with an agreement that the buyer sell it back to him at a lower price for cash. Let there be an example: Titius, needing cash here and now, approaches Peter, who, unwilling to give money as a mutuum, offers goods to be bought with money on credit and at the highest price, say $100, with an agreement that at once he sell them back to him for cash and at the lowest price, say $90. For thus Peter, not from the contract of mutuum, but from the contract of sale and purchase, gains that increase, and Titius provides for his present necessity by having $90, although after a year he must return $100.

I say 1st. The contract of retrovendition is wholly licit, provided the required conditions are present. The reason is both because in Lev. xxv, 24 such a pact is said to have been imposed upon the Jews, and because it contains nothing which contradicts natural law. But the conditions are 1st. that the price be diminished according to the estimation of the burden which is imposed upon the buyer; 2nd. that there be no pact concerning a retrovendition to be made at a greater or lower price; 3rd. that by the pact it not be required that the risk of the thing sold fall to the harm of the seller, since this of itself pertains to the buyer, unless however the price is increased according to the estimation of the risk; 4th. that the thing be sold back as it is handed over, vacant or with fruits. - Cf. St. Alphonsus, n. 812. - Kenrick, n. 61.

I say 2nd. The contract of mohatra is of itself illicit and nothing but disguised usury, as is established from proposition 40 condemned by Innocent XI, which reads thus: "The contract of mohatra is licit, even with respect to the same person and with a contract of retrovendition previously entered into with the intention of profit." - Cf. Viva on this proposition.

I say. Sale under the spear (auction, public sale), namely that which is made through a crier and in which the thing is assigned to the final bid, is licit, whether it is done with the owner's consent or against his will or by public authority, whether it is bought below the lowest price or sold above the highest; because public power approves that the just price be publicly constituted from the concurrence of buyers. Hence if buyers concur, the thing becomes more estimable; if they do not concur, it is held cheaper. - Cf. St. Alphonsus, n. 808.

"A Catholic official whose office is to preside when goods are sold under the spear," among which "sometimes there are found books of heretics or books containing other obscene things," is not bound "to investigate whether among the goods which are sold under the spear there are found books of heretics or others containing obscene things. But if by chance he has learned this, and can prevent bad books from coming to bidders who will abuse them, let him indeed do this, since each one ought to impede the sin of his neighbor when he can do this conveniently, or without his own grave harm." - S. C. de P. F. 27 June, 1820.

Question 1. Can a seller send fictitious bidders, so that the price of the thing may rise?

Resp. Negatively, according to St. Alphonsus, because this appears too fraudulent to be excused, since it tends to deceive sincere buyers, and therefore inflicts injury upon them, since they are the cause that the price rises from fraud, and not from the natural concurrence of things, that is, from the free consent of buyers. Nevertheless others say that, by force of custom, if any exists, indulgence is to be granted to those who act thus. - Cf. St. Alphonsus, n. 808; and Hom. Ap., n. 175. - Kenrick, n. 50.

Question 2. Can a buyer make an agreement with others, that they not bid, or not offer more?

Resp. Negatively, according to St. Alphonsus and several other theologians, at least in the case of a forced auction. The reason is that the seller has a right that the buyers be perfectly free and that the increase of the price not be impeded. Yet Cardinal de Lugo with Diana and others seems to hold the contrary, at least with regard to the guilt of injustice, and he admits that it is the common opinion of the Doctors that then a sin is committed only against charity. Cf. St. Alphonsus, n. 808. - Lugo, disp. 26, n. 175. - Baller., note (b), p. 739.

Monopoly is distinguished in two ways. One is legal, which consists in the power of selling certain goods granted by public authority, for a reasonable cause, to one or to several; and the other private, which consists in a manner of acting by which one or several bring it about that they alone sell or buy something.

I say 1st. Legal monopoly is licit, provided it is done with a just price. The reason is that, on account of a just cause of the public good, the Prince can grant it as a privilege or for exacting a tax from merchants.

I say 2nd. Private monopoly is illicit in the following cases: 1st. if a merchant impedes by fraud or lie, lest other goods be brought in, so that he may sell his own goods more dearly with common detriment; 2nd. if one or a few buy all the goods so as afterward to sell them more dearly; 3rd. if workmen or craftsmen agree that they will not teach their art except at an unjust price, or that no one will complete work begun by others; 4th. if laws enacted by the State for preserving the just price and not restricting commerce are violated. For these laws oblige in conscience and indeed, as it seems to us, to restitution when others suffer harm from the violation. Such laws protect rights, secure subjects against fraudulent actions of sellers and companies of merchants. These laws among us are "The Sherman Law"; two or three or more of the last sections of the most recent law, "The Clayton Trust Bill," amend that prior one, while other sections of the same and one section of the law, "Federal Trade Commission," complete it.

"Sec. 6. That the labor of a human being is not a commodity or article of commerce. Nothing contained in the anti-Trust laws shall be construed to forbid the existence and operation of labor, agricultural or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade under the anti-Trust laws." - Clayton Trust Bill, Section 6. Cf. The World Almanac an. 1915, p. 300. See below n. 994, Q. 5.

Question 1. Whether and in what way do merchants sin who conspire not to sell their goods except at the highest, although just, price?

Resp. They certainly seem to sin against charity, because although they are not bound to sell below their own price, nevertheless they are bound not to dissuade others from selling at a lower price. Thus, although by charity you are not bound to give alms to such a poor man, nevertheless you are prohibited from dissuading others if some wish to give it. - But more probably they do not sin against justice, because if others are compelled to buy at the highest price, they are not compelled by the sellers, but by their own necessity, which cannot be called true coercion on the part of the sellers. Yet the highest price here must be understood as that which would exist without the monopoly, not that which arises from the monopoly. - Cf. St. Alphonsus, n. 817. - Lugo, disp. 26, n. 173.

Question 2. Do merchants sin against justice or against charity who, at the time of harvest or vintage, buy all the wheat or wine of the region at the cheap price then current, so that afterward they may sell more dearly?

Resp. Negatively, more probably, as it seems, with regard to justice, provided they do not sell above the highest price which would be current with the monopoly excluded. The reason is that they violate the right of no one. Indeed a negative answer must also be given, at least probably, with regard to charity, provided they do not induce others to sell more dearly, nor themselves sell above the highest price which would have place with the monopoly set aside, because they use their own right; for no one is bound to neglect his own advantage so as to avoid another's harm, when he is not obliged to avert it. - Cf. St. Alphonsus, n. 816. - Kenrick, nn. 64 et seq.

Question 3. Can the justice of the price be taken from the very state introduced by force of monopoly?

Resp. Negatively. The justice of price must not be taken from the state which monopoly has introduced, but from the state which the goods would have with the monopoly excluded. For if the justice of price depended on the will of the seller or buyer unwilling to sell or buy except at such a price, in fact no price would be unjust. Therefore the justice of price "ought," as Lugo says, "to depend on other antecedent circumstances, namely on the abundance or scarcity of goods and of money, on the many or few who sell or buy, and on the necessity of selling or buying which they have." In the case of monopoly the abundance "of goods is the same" as if no monopoly had existed; "also the will of selling," for they wish to sell their own things and at the same time "to extort a greater price; but if they cannot obtain this, they will sell at a lower price; therefore there is nothing from which, antecedently to the will of the sellers, the price is to be increased, but the same price must be estimated just which would be just if monopoly had not preceded." Hence "monopoly occurs when someone at the time of harvest or vintage, for example, buys all the wheat or wine, or the greatest part of it, at the cheap price then current, so that afterward all may be compelled to buy from him at the highest price; and this very thing will be if some few agree and conspire for this. Therefore this will be against justice if afterward they sell above the highest just price. But the highest just price must be understood, not that which results from their agreement, who are unwilling to sell except at such a price, but that which, with that agreement excluded, would be the just price, considering the quantity of wheat or wine for sale and the greater or lesser frequency of buyers." (Lugo, disp. 26, n. 176.) And thus also when monopolists by force or fraud deprive small sellers of their commerce by establishing shops in the same neighborhood and selling the same goods at a price below the lowest, and then, having obtained the whole commerce of these goods, sell them at a price above the highest just price, they certainly violate commutative justice and are bound to restitution.

In like manner they are bound to restitution when they compel other sellers of the same goods to sell at a price above the highest just price, if, for example, monopolists greatly increased the price of coffins, which they would not sell to small undertakers unless they pledged that they would sell at too high a price.

But are these second sellers, selling at that price now current, which otherwise would be unjust, also bound to restitution? Very many indeed affirm this, whose reason is urgent: these are obliged because the price is unjust. Therefore not only the imposers, which all hold, but these also must restore. But the Salmanticenses: "the truer opinion is the one denying that such sellers sin, even if they are not ignorant that the increase of price had its origin from an unjust agreement, because now that price is common and vulgar. But that it has been increased from the injustice of others is accidental to me, because by selling a thing at the current price, I sell at the just price." (Salmanticenses.) Because the just price of the market is judged among all to be that which now commonly runs, from whatever source this comes. - Sal., tr. 14, cp. 2, p. vi, n. 57.

They also commit injustice who too greatly increase the price of things which are called of first necessity, for example, bread, flour, coffee, milk, etc., because the liberty of the contracting buyers is lacking, and hence equality; the same quantity is always consumed; for whether they wish or do not wish, men must obtain those things for themselves; hence there is the same will on their part. - Cf. Bulot, n. 804, 111, 3rd. - Lugo, l. c. - Bouvier, Law Dictionary, Restraint of Trade.

Sale through brokers is that which is not made immediately by him to whom the things belong, but through others by commission, and these are called brokers. But brokers can be either merely friends, or hired for this by a special wage, or employed for diverse works at an annual price.

Question 1. Can a broker who sells above or buys below the price designated to him retain the excess of price for himself?

Resp. Negatively, generally speaking, because he has no title for retaining anything. For he does not have it by reason of the thing, because it is not his own but the owner's; nor by reason of labor and industry, at least by a strict title of justice owed to him, because if he has been hired by a stipend, he has a right to nothing else; but if he renders the industry gratuitously, he has already renounced a wage. Except: 1st. if by extraordinary and undue labor, or by wholly special industry or diligence, he made the thing better; 2nd. if the owner expressly or equivalently declared that he requires nothing beyond the determined price; 3rd. if the owner knew the broker's manner of acting and held it ratified. Cf. St. Alphonsus, n. 825.

Question 2. Can the broker buy for himself a thing to be sold at a price determined for him, and afterward sell the same thing as his own at a greater price?

Resp. Affirmatively, with two conditions posited, namely: 1st. that, having employed moral diligence, he does not find a buyer who offers more; otherwise he would act against his own office and the certainly known will of the mandator; 2nd. that he buy the thing for himself not fictitiously, but truly, so that he undergoes its risk; and if perchance he does not sell it for so much, nevertheless he renders the determined price; otherwise equity is not preserved.

Question 3. Can a broker retain for himself those things which the seller gives gratuitously solely out of regard for him?

Resp. Affirmatively, if the true donation is established; because a merchant, absolutely speaking, can yield something from his own profit to some broker, that he may bring him to his shop; but for this it is required that he be truly disposed to sell to any other at the higher price, and in fact ordinarily sell thus. But the confessor ought not easily to give credence to brokers asserting that such donations were made to them, unless there is question of places where merchants are accustomed to act thus. - Cf. St. Alphonsus, n. 825; and Hom. Ap., n. 189.

I. QUESTION I. What is buying? ANSWER. It is the agreement of giving a determinate price for a ware. Selling is the agreement of giving a ware for a determinate price. These two partial contracts coalesce into one. That contract is onerous. The dominion of the ware is not transferred before the delivery of the same. The buyer before delivery has a right to the thing, but not dominion. Wherefore if before delivery a second buyer buy, and the thing be delivered, he acquires dominion, nor is he bound to deliver the thing to the earlier buyer. That dominion therefore may be transferred, the payment of the price and the delivery of the thing are required. If either of these conditions be lacking, authors commonly assert that dominion is not transferred. Wherefore if the buyer alienate the thing, the price not being paid, the seller retains the right of demanding it back wherever he find it. If nevertheless the seller trust the thing to the buyer, and hold the price as paid, then dominion has been transferred.

II. QUESTION II. A thing sold to two buyers, to whom is it to be delivered? To whom does it perish before delivery? ANSWER. It is to be given to the earlier buyer, who, since he is prior in time, is also prior in right. If to the one it was only sold, and to the other both sold and delivered, the thing is that man's, unless the first be privileged, as pious places, a church, cities. In which case indeed the thing is owed to the earlier buyer, even if the ware has been delivered to the second buyer. The same is to be said when to the earlier buyer, even though not privileged, a pledge was given in testimony of greater security. A thing sold perishes before delivery to the seller, because a thing perishes to its lord. But dominion before delivery pertains to the seller. If the thing have been delivered to the buyer, and the price be held as paid, it perishes to the buyer.

III. QUESTION III. To whom do the fruits of a thing sold pertain before the payment of the price? ANSWER. If the fruits hang upon the plants at the time the thing is sold, they pertain to the buyer, because they are then parts of the thing sold. Authors dispute concerning future fruits, before the price be paid. The price can be regarded in two ways. First, when it is held as paid: namely when the seller grants the buyer a definite time for payment: then it is certain that the fruits pertain to the buyer. Secondly, the price is considered as promised by the buyer to be paid continuously, or at such a time, so that the seller does not hold that price as paid. Concerning this second case there is dispute.

IV. The first opinion defends that the fruits pertain to the seller, because he alone is lord of the thing sold before the price be paid or held as paid. The other opinion defends that they pertain to the buyer, because the civil laws, which deny that dominion is transferred before the payment of the price, have been abrogated by canon law forbidding all usury. But as regards this, the custom and usage of each region is to be regarded, and what laws obtain in this matter in the forum: and according to these the question is to be decided.

V. QUESTION IV. Can contracting parties enter upon an agreement that the buyer render to the seller the fruits of the thing, or the price of the same, until he has paid the price? ANSWER. Molina, Bonacina, Viva, and others affirm it. But this opinion is to me false, since that agreement is usurious, and a loan disguised by an agreement. But, says Fr. Viva, the buyer does not pay on account of the delay of payment, but on account of the gain which ceases to the seller by reason of the protracted payment. These are evasions. If the seller suffer loss, let him either defer the delivery of the thing until the price be paid, or exact compensation of the loss which he in fact suffers. If the seller grant a delay of time for the payment of the price, and the buyer be tardy, then he is bound to compensate the loss, and the seller can by right demand back reparation of that loss which he in truth suffers. These things are just and equitable. But the aforesaid sale with the burden of rendering the fruits of the thing delivered bears of itself the appearance of usury, and is therefore to be avoided.

VI. QUESTION V. Whose are the fruits perceived in the meantime, when it happens that a contract of sale is dissolved? ANSWER. Authors teach that a contract can be dissolved in four ways. First, if you sell in this manner: I sell you a house on this agreement, that if within a year a better condition offer itself to me, the house be free; or if you add the lex commissoria, as if you say: I sell you the house, that within a year you pay the price: otherwise let the contract be null. Second, if the sale be celebrated with an agreement of resale: as if you contract in this manner: I give you moneys, that you may sell me the house; and I will sell the house back again on this law, that as often as you render the moneys, I will sell it again. Third, if by mutual consent after a year the contract be rescinded. Fourth, if the contract be conditional, and the condition be not fulfilled. These things being laid down, the Salmanticenses, Lessius, and Bonacina teach that a contract celebrated expressly and manifestly with an agreement of adjudication to a day, or with the lex commissoria, is by that very fact null, and consequently that the fruits pertain to the seller. Similarly, if the sale be affected by an agreement of resale, they teach that the fruits of the intervening time produced from the time of the sale up to the time at which the contract is dissolved pertain to the buyer; but those which are gathered at the time of the resale belong to the seller. Whether this contract bears the appearance of usury shall be said elsewhere. But if the sale be dissolved by mutual consent, the fruits pertain to the buyer, according to what is said in no. 4, because the contract before the dissolution was valid. If finally the condition be fulfilled, the fruits are the buyer's; if it be not fulfilled, they are the seller's. For the rest, in these contracts the wills of the contracting parties are to be regarded, guiles and pretences being removed.

VII. QUESTION VI. Who can sell and buy, and what things are vendible? ANSWER. All who are apt for celebrating contracts can by right sell and buy, unless the laws forbid; as it is forbidden to guardians and curators to sell the goods of wards and minors; and to executors of testaments it is forbidden to buy the goods of the deceased. But those things whose dominions can be transferred are vendible. Hence spiritual things cannot be sold or bought, nor those which are annexed to spiritual things, as benefices, rights of patronage, the holy oils, the relics of saints, a temple, and the rest of that kind. Forbidden also is the sale of an inheritance before the testator's death.

VIII. QUESTION VII. Are things bought with another's money the buyer's, or the money-owner's? ANSWER. They become the buyer's when he uses another's money in his own name — say a deposit — and buys at his own advantage and risk, no law standing in the way. But when goods are bought with the money of wards, of soldiers, of churches, of minors, then the buyers acquire the goods not for themselves, but for the churches, the soldiers, the wards, the minors.

IX. QUESTION VIII. Is the sale of another's thing valid? ANSWER. In a sale dominion is transferred. The seller of another's thing has not dominion. Therefore he cannot transfer it. If a robber sell you another's thing, since he lacks the dominion of the same, he cannot transfer it. But if he acquire the dominion of the money received from the buyer, he is nevertheless bound to restore it, and to compensate the losses thence coming to him.

X. QUESTION IX. Whether the sale of those things which are applied to depraved uses is lawful? ANSWER. Certain things are evil by their own nature, as maleficent charms, libellous pamphlets, and rings to which demons are said to be bound, and the rest of that kind. That wares of this kind cannot be sold is certain. Those who publish or sell libellous pamphlets against the Pope, the cardinals, or the mendicants, incur excommunication. The author of a libellous pamphlet against laymen is punished with the penalty of death, Code, On Famous Libels, law 1; by canon law he is to be beaten with rods. Chapter Qui in alterius. Read the constitution of St. Pius V which begins Romani Pontificis providentia, published in the year 1572.

XI. QUESTION X. Do those sin who sell poisons, women's paints, playing cards, idols, and the rest of that kind? ANSWER. Those who absolutely sell poisons, no regard being had of the buyers, sin gravely, and ought to be punished as betrayers of human society, because they kill men by another's hand. But those who sell poison to an honest buyer, prudently judging that he will apply it to a good use, as indeed it can be applied, do not sin.

XII. That women's paints can be sold the Salmanticenses teach, and for this opinion they cite St. Thomas, who, II-II, q. 169, art. 2, reply 2, writes these things: The painting of women, of which Cyprian speaks, is a certain species of feigning, which cannot be without sin. These are decisive words. Cyprian is speaking of women who apply paints to counterfeit and display beauty. In confirmation of his doctrine St. Thomas alleges the authority of St. Augustine: To be painted with pigments, that one may appear either more ruddy or more fair, is an adulterous deceit, by which I doubt not that even husbands themselves are unwilling to be deceived — to whom alone are women to be permitted to be adorned, according to indulgence, and not according to command. It is lawful for women to hide from men a deformity, a hump, a scar, and the rest of that kind: but the deformities of countenances are not hidden by paints. Paints are commonly applied to counterfeit a lie of beauty. Women, while they stay at home exposed to the eyes of those who deserve it, commonly neglect all ornaments; but when they go out in public, and, as though fixed upon a stage, they would burst forth as mimes, then they appear painted, curled, adorned, decked out, and hedged about with all the tricks of worldly or rather of infernal vanity. Who would say that these do not sin, and consequently the sellers themselves, who knowingly hand over paints to women of this kind? But if paints be sold for the hiding of deformities, then the sale is not unlawful. If the paints serve only for the counterfeiting of beauty, and this be perceived from the condition of the buyers, the sellers sin. Wherefore from the circumstances it must be perceived whether the sale be lawful or unlawful.

XIII. That dice, knucklebones, and playing cards can lawfully be sold, the younger authors everywhere teach. St. Thomas, St. Raymond, St. Bonaventure, St. Antoninus, and the rest of the saints and the graver theologians condemn games of chance, of dice and cards, of sin in those who give themselves without measure to games of this kind. Cards can be applied in those games which depend upon industry and art, and can serve for recreation or solace. In these games laymen can indulge without fault for some short time. For those things which are applied for the sake of recreation have narrow bounds: for man is born for labour and for serious works to be carried out. Recreation and honourable solace are medicines destined for the restoring of strength. If men leap beyond these limits of medicine, they straightway decline into vices. Sellers of knucklebones, of cards, and of idols cannot therefore be absolutely condemned: because these can be applied to games not of chance but of industry; idols can be applied to ornament, and to the illustrating of antiquarian study. But because knucklebones, cards, and paints are for the most part applied to depraved uses, therefore merchants are to be exhorted to abstain from selling these wares. These things are rigid, you will say. I confess it. But the way of heaven is narrow, and the life of Christians is a continual penance.

XIV. QUESTION XI. Whether probabilism is vendible by a judge? ANSWER. Lest anyone suspect that I propose this truly festive question to create odium against probabilism, it concerns me to admonish the reader that Fr. Thomas Tamburini disputes this controversy, Book VIII, On the Decalogue, tract 3, chapter 7, § 3, no. 13, where he proposes this title: The sale of a probable opinion; and in these words discusses the question proposed: “There occurs here a difficulty not unlike that concerning a judge. Let us suppose that opinion to be probable of which I have spoken at large in Book I, chapter 3, which, besides those cited there, Dicastillo follows, Book II On Justice, tract 1, disputation 5, doubt 7: that it is lawful for a judge to choose one of two equally probable opinions, and according to it to pronounce sentence. Now I ask, will a judge lawfully and justly accept money, that he may rather choose the one which favours me than the one which favours my adversary?”

XV. He answers that he disapproved this opinion in the place cited. “Let him nevertheless read it” (he adds) “who will, in Lessius, Book II, chapter 14, doubt 9, no. 64; Valentia, 2-2, question 63, article 4, disputation 5, question 7, part 4; Salón, 2-2, question 61, article 4, conclusion 2.” Further, Fr. Lessius in the place cited, besides Valentia, Salón, Diana, and many others, maintains this opinion — namely that a judge can by right accept money for passing sentence according to one probable opinion rather than according to another — in these words: “It can be doubted whether he (the judge) sins against justice, if he accept something that he may follow this rather than that in judging. It seems that he does not so sin … because he is not bound to the one or the other determinately, but it is free to him to follow whichever he prefers. Therefore if he accept something that he may follow this rather than that, he does no injury to anyone. The consequence is plain. Because since the thing is not owed, it is not against justice (if we regard the law of nature alone) to exact a price for it, if otherwise it be appraisable at a price. Thirdly, because he does not accept a price for the justice of the sentence, but because in this cause he prefers this opinion to that, to which he was in no way bound. Now this is appraisable at a price: both because it is most useful to the party, and because by following this opinion he loses the favour of the other party, whom he could have gratified.”

XVI. Would you have things better? Probabilism teaches that it is free to select either of two probable opinions. When two contradictory probable opinions occur, a judge can pass sentence according to that which shall have pleased him more. Further, that he select this rather than the other is appraisable at a price. Therefore he can by right sell this preference of one opinion over another. Therefore probabilism is matter of selling and buying. What wonder then, if a ware so precious be defended with so great a heat of disputation? See how true is the oracle of Alexander VII, that this manner of opining is the head of all evils.

I. Three kinds of trade are wont to be distinguished. The first, by which the things necessary for food are bought, and what remains over is sold. The second, by which material is bought — say wood, metals, and many other things — out of which by the labour of art those things are made which conduce either to ornament, or to convenience, or to the necessity of life. The third, by which wares are bought that the same, unchanged, may be sold more dearly. The first two bear the name of trade in a less proper sense. The third is the trade of which we shall speak. This the divine Scriptures and the holy Fathers of the Church assert to be liable to guiles, frauds, perjuries, and lies. For it is said, Ecclesiasticus 26: Two sorts of callings are hard … a merchant is hardly free from negligence, and a huckster shall not be justified from the sins of his lips. With difficulty is a merchant stripped of negligence in the business of eternal salvation, because he is bewitched with the cupidity of increasing riches. Hence the Apostle, 1 Timothy 6, says: For they that will become rich fall into temptation and into the snare of the devil, and into many unprofitable and hurtful desires, which drown men into destruction and perdition. For the desire of money is the root of all evils; which some coveting have erred from the faith, and have entangled themselves in many sorrows. But thou, O man of God, fly these things; and pursue justice. Very many testimonies of the Fathers I pass over from a study of brevity.

II. QUESTION I. Is trade forbidden to clerics and religious? ANSWER. There are many canons which forbid trade to clerics and religious under penalty of excommunication. Chapter Secundum, under Clerics or Monks, where these things are had: Under the threat of anathema we forbid that monks or clerics trade for the sake of gain. Again chapter Consequens, distinction 88; the Clementine 1, On the Life and Honesty of Clerics; chapter Canonum, cause 14, question 4. The penalties imposed by these canons are excommunication and suspension, which the Council of Trent renewed, session 22, and to which it added others. Authors commonly teach that these penalties are not latae but ferendae, which no one incurs save after the judge's sentence. Those laws comprehend all clerics constituted in sacred orders, nay even those in minor orders, if they be beneficed. Many of the younger authors except from this prohibition clerics constituted in minor orders … … even if they be beneficed, without any foundation: they distinguish for themselves, and we are not bound to distinguish.

III. Moralists dispute whether clerics or monks who trade once and again sin mortally. But I am wont to abstain from defining the degree of malice, unless the truth be expressed. The Salmanticenses defend that a cleric or monk does not sin mortally if he trade twice or thrice, and they cite Diana, de Lugo, Molina, Filliucci, and others. But I answer that the law is to be observed. Whether the sin be grave or slight escapes our mind. That the law is to be observed our mind evidently recognizes. Therefore these little distinctions are evasions for eluding the law.

IV. QUESTION II. Can clerics or monks trade through others? ANSWER. The Salmanticenses affirm it, who cite Molina, Lessius, de Lugo, and others: because, they say, the sacred canons forbid to clerics and monks trade to be carried out by themselves; for this indeed bears an unseemliness and brings with it a distraction of mind; but it is otherwise when clerics and monks leave the whole care to another, and exercise merchandise by the ministry of others.

V. If this be not a circumvention of the law, what will be? The end and spirit of the prohibiting law tends to this, that it may draw clerics and monks, consecrated to God, away from the heaping up of riches, that they may give themselves wholly to the divine worship, that they may render God propitious to themselves and to the people. But clerics and monks who trade by the industry of others are tormented by avarice, by cupidities, by cares, by straits, by continual perplexities and solicitudes. What trade is permitted to clerics and monks is described in Vol. VII, Book 3, dissertation 1, chapter 3, no. 10 and following.

VI. QUESTION III. In how many ways does trade become unlawful? ANSWER. It can become unlawful: first, if its end be gain alone; second, if frauds, lies, perjuries, or monopolies be mingled with it; third, if the matter be not vendible, as sacred things, or wares which we are forbidden to sell to unbelievers, such as arms, iron, and the others which are enumerated in the Bull In Coena Domini; fourth, if merchandise be carried on either on feast days or in a sacred place.

VII. QUESTION IV. Can those who exercise merchandise lawfully sell wares more dearly than those who do not exercise trade? ANSWER. All affirm it, since the profession of merchants is necessary to the commonwealth, and these must live by their profession and sustain many burdens from which those are free who do not exercise merchandise. They cannot, however, exceed the limits of the price customary among merchants. It is forbidden them to gather up corn while it is worth less, that it may be sold more dearly. This trade natural and positive law reject. For rich men of this kind who accumulate corn, that in a time of scarcity they may sell it more dearly, are oppressors of the poor and pernicious to the commonwealth. The law itself, not only the common law, chapter Quicumque, cause 14, question 4, but the peculiar law also of every kingdom, forbids such trade.

I. A monopoly is a convention or conspiracy by which many deliberate concerning such a ware not to be sold, save at this or that price designated by themselves. There are four (others reckon twelve) chief kinds of monopoly. First, when one or many seek out and buy up wares, that, scarcity being brought in, the rest may be compelled to buy from them at a dearer price. Second, when one obtains a privilege from a prince, by force of which he alone, the rest being excluded, can sell such wares. Third, when many hinder foreign wares from being brought into a city, that they themselves may be able to sell at a dear price their own, perceived from their own estates or sought out elsewhere, to the detriment of the common good. Fourth, when merchants conspire together and determine that wares are to be sold at so much and not less; or on the contrary, when buyers conspire together and determine that so much and not more is to be paid for wares.

II. A monopoly of the first kind all disapprove. The second they approve, when the privilege obtained from the prince is a just one and consonant with the public good. For if the privilege were obtained from the prince by crafty art and fraud, and turned to the prejudice of subjects, then it would be unjust, and the use of it unlawful. The third kind of monopoly all condemn as unjust, and teach that the monopolists are subject to restitution. The fourth is similarly unjust, as will presently be plain.

III. QUESTION I. Is it lawful for sellers to enter upon an agreement of not selling wares save at the highest price? ANSWER. The Salmanticenses affirm it, who cite Lessius, de Lugo, Tapia, Navarrus, and others: because merchants have a right of selling at the highest price, which is otherwise just. The contrary opinion is to me the more probable. For although the highest price be within the confines of the just price, nevertheless a conspiracy of not selling save at the highest price, and of not buying save at the lowest, is unjust and detrimental to the commonwealth. For this perverse convention being excluded, many merchants would buy and sell now at a middle, now at the lowest, now at the highest price, which would turn to the great advantage of the commonwealth. The end of merchandise is the public good. Therefore trade becomes vicious as often as it is opposed to this end.

IV. QUESTION II. A monopoly being once constituted by merchants of selling wares at an unjust price by excess, do other merchants, not partakers of that monopoly, sin against justice if they sell their wares at this unjust price? ANSWER. The Salmanticenses with Diana, Bonacina, and Reginald deny it, because, they say, that the price is unjust is by accident to them, from the injustice of others. Is not this an excellent reason? Is it by accident to you that the price is unjust? It is by accident that the monopolists fixed the price; but the price is unjust per se. Do not the monopolists sin in exacting this unjust price? You say yes. Why? Because the price is unjust. Therefore you also will sin by accepting an unjust price. Distinguish the sin which the monopolists committed by increasing the price from the injustice of the price constituted. The former is by accident to you. But the exaction of an unjust price is of itself a sin to you. The said opinion therefore is to me false. Read what Cicero writes, Book III of the Offices, chapter 12.

V. QUESTION III. What is to be said of an agreement of reselling and of rebuying? ANSWER. This agreement can be added either in favour of the seller, or in favour of the buyer, or in favour of both together. It is made in favour of the buyer if you say: I buy from you this book on this agreement, that at a time appointed by me you buy it back from me. It is made in favour of the seller if you say: I sell you this book on this agreement, that at an appointed time you sell the same back to me. It is made in favour of both when to each is left the faculty of withdrawing from the contract.

VI. An agreement of this kind is lawful when it is made in favour of the seller alone, if the following conditions be observed. First, that contracts of this kind be celebrated in good faith and with a sincere mind of selling and buying, all palliated usury being excluded. Second, that the quantity of the price be tempered according to the added condition of the burden. Third, the condition is that the thing be sold at the price current at the time of the resale. Fourth, that the danger or advantage of the thing sold be thrown back upon the seller, and that the identity of the thing sold be preserved: as if a vineyard be sold with its fruits, it ought likewise to be resold with the fruits.

VII. QUESTION IV. Is the contract of kinship lawful? ANSWER. In Italian that contract is called the jus di ricupera, or the right of redeeming a thing sold. This right is granted to the blood-relations of the seller of recovering within a prescribed time an estate sold. For movables, however precious, can in no way be redeemed. The right of drawing back estates sold is confirmed by the laws of all nations and princes. And this order is observed in such a contract. The price at which the estate was bought ought to be paid to the buyer. This right is granted to the nearer blood-relation, and by degrees to the rest. If the nearer yield this right, the next of kin succeeds. He who by guiles and frauds hinders this right sins against justice. Blood-relations also sin when they recover estates sold in favour of friends, from whom they receive money with which they redeem the estate. Likewise when they recover in order to sell at a greater price. At the least they work against the end and spirit of the law, which regards the preservation of families, and by no means affords a handle for thrusting out lawful possessors and disturbing the public peace.

VIII. QUESTION V. Is the Mohatra contract lawful? ANSWER. The Mohatra contract is entered upon when a man in need of ready money buys from a merchant wares of which he has no need, at the highest price — say, 56 — with an agreement added by the merchant that they be resold to him by the buyer at the lowest price — say, 50. The agreement can be added either expressly or tacitly. The contract can also be celebrated without any agreement, whether tacit or express, either with a different or with the same merchant. In the first way it is a usurious contract, condemned by Innocent XI in this thesis: The Mohatra contract is lawful even in respect of the same person, and with a contract of resale entered upon beforehand with the intention of gain. Under the cloak of a contract of selling and buying usury is hidden, as is plain to all. For the feigned seller gives 50 on loan, that he may receive 56. Now all disapprove this contract, once defended by some. Cardinal de Lugo, Vol. II, disputation 26, section 1, no. 208, although he adheres to the common opinion, nevertheless widens the buckles. Read Vol. VII, Book 3, chapter 5, no. 9.

IX. Theologians dispute whether, every agreement both tacit and express being excluded, and scandal and the danger of infamy being excluded, the aforesaid contract be lawful. The common opinion of the younger authors affirms it. But in practice it scarcely happens that the prescribed conditions are observed. Wherefore the contract of sale is to be separated in mind and in fact from the contract of loan, the masks being stripped off.

X. QUESTION VI. Can those who undertake wares to be sold from a lord retain anything for themselves, if they sell the same for more than was prescribed by the lord? ANSWER. If these, whom St. Antoninus calls Riratticri, exceed the limits of the just price in the sale, they are bound to restore the excess to the buyer. If they recall the wares to a better state by their own industry, they can retain for themselves the increase of price which corresponds to their industry. Similarly, when the lord consents that they retain for themselves what they receive beyond the price which is prescribed — provided nevertheless that the limits of the just price be not overleapt — they in no way sin. This agreement and peculiar industry being removed, brokers are bound to render the whole price to the lord. Since by no title can they retain anything for themselves. Not by reason of the ware, because it is the lord's; not by force of the common industry employed in the sale, because they let out this industry to the lord at an agreed price. Nor is it to the purpose that you object that the lord designated the price: since he designated that the ware was to be sold at so much and not at a cheaper price; but for the rest his intention was not, nor can it by right be presumed, that it should not be sold for more, the occasion being given, unless, as I have said, they expressly declare it. In good faith therefore ought intermediaries of this kind to conduct the lord's business, since they cannot enrich themselves with another's wares. What has been said of selling is to be said also of buying. Wherefore tailors are thieves when, buying cloths for the making of garments by the lord's commission, they retain something for themselves, under pretext of having bought more cheaply.

These Contracts, among others, are the more celebrated, since nearly the whole commerce of human society subsists on them; they are nonetheless most perilous, both on account of the defects that very often lie hidden in the thing sold unknown to the buyer; and on account of the avarice of merchants, which, cloaked under this specious pretext, sells their wares through fair means and foul, and heaps up for itself the Denarii of the poor, by selling worse goods to them at a dearer price; these things are chiefly practiced in places where there is no tax on price; but everyone is permitted with impunity to exchange his goods either according to the buyer's necessity, or according to his own pleasure.

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.

Caius, a wealthy Catholic, when he was building a new house for himself, bought several ornaments (old china, miniatures, curios) for six hundred pounds sterling. He immediately paid the seller two hundred pounds, being about to pay afterward what remained. In the meantime, however, he heard from a certain expert that several of the said ornaments were modern and counterfeit, and that all of them were not worth more than one hundred and fifty pounds. He therefore determined not to pay the remaining sum to the seller, who, however, protested strenuously, saying that the buyer had inspected the things with his own eyes and had freely agreed upon the price. Caius wishes to know whether he can safely stand in conscience by his determination not to pay. Hence it is asked:

1. What is the contract of buying and selling?

2. What is a just price?

3. How is that maxim of our law—Caveat emptor—to be interpreted, especially with respect to the forum internum?

4. What is to be said of the case?

1. This question was answered above, p. 303.

2. See the answer to this question above, p. 304.

3. How is the legal axiom Caveat emptor to be interpreted especially for the forum of conscience?

In English law the axiom Caveat emptor means that where an article is offered for sale and is open for inspection to the buyer, the buyer is not permitted to complain after the bargain has been struck that the defects, if any existed, were not pointed out to him. He had the opportunity of examining the article, and he should have found out its defects for himself. In the forum of conscience also the axiom may be applied to accidental and manifest defects which ordinary inspection should have revealed. It can not be applied to substantial defects which make the article useless for the known purpose of the buyer, nor to the absence of qualities which were the motive of the contract.

4. The case. Caius paid £200 down for some old china, miniatures, and curios for his new house, and contracted to pay £400 more at a future date. In the meanwhile he learned from an expert that many of the articles were not genuine but fictitious, and not worth more than £150. He therefore refused to pay the outstanding £400, though the seller vigorously protested on the ground that the buyer had examined the articles and freely contracted to pay the sum agreed upon. Caius wants to know if he is safe in conscience in refusing to pay more than he has done.

Yes; he is. Many of the articles are not what they were represented to be, and for what he bought them, so that he would have a right to rescind the contract and claim the damages. The price that he has already paid is a very good one for the whole lot, and the seller should be satisfied with it.

The property of Sempronius is sold at auction by order of his creditors. Sempronius knows that Rufinianus desires to buy his garden, so he sends two friends to the sale, who, by bidding against Rufinianus, are to raise the price, and they do this so successfully that the garden fetches a good sum. The question is asked whether Sempronius is bound to make restitution.

The seller at an auction can act fraudulently in several ways: (1). If he conceals a defect in a thing put up for sale; (2) if he puts up men to bid against one another in order to raise the price; (3) if he joins in the bidding himself or through others, unless (a) at a compulsory sale, where this is certainly permissible, or (b) in places where it is customary for the seller to join in bidding; (4) if he afterwards substitutes another article for the thing sold; (5) if he refuses to hand over the article for the price offered, except in places where it is the custom to withdraw things if a suitable price is not reached.

From what has been said it appears that Sempronius, if liable to make restitution, would be so solely because of his intention to raise the price of his garden, for, although it is a compulsory sale, he does not really make a bid for purchase, either in person or through his friends. Two points have to be taken into account. Where such tricks are commonly practised, as is very frequently, even almost universally, the case, the matter must be judged more leniently, as a tacit acquiescence can be assumed on the part of the bidders, who are aware of the custom, and can protect themselves by similar devices (Konings, 1002; Aertnys, 490).

It is also very doubtful what is meant by a sham bidder (ficte licitans). Regarded objectively, every bidder is a real bidder, since his bid may be the last, in which case he will have to pay the sum he offered, although he may not originally have intended to acquire the thing. The distinction between a real and a sham bidder is therefore only in the intention with which they bid, and is something within them. As, at a compulsory sale, it cannot be regarded as unfair for the owner to join in the bidding either in person or through some one else, it is probably very doubtful whether the inward intention in this case can render the outward action unfair. Therefore it is scarcely possible to condemn Sempronius for having acted unfairly, and therefore he cannot be required to make restitution.—Dr. A. Goepfert.

Case.—A wealthy man saw a good chance to make a profitable deal. A coal mine, worked in his vicinity at great profit, acquires from the neighboring farms additional land, and gets it at a low price because the country people are ignorant of its real value. Our wealthy man figured: “I will buy the farm lands, offering for them somewhat more than the mine does, and then sell the same to the mine owners at a big profit: for when they see that they are dealing with a man who knows, they will surely pay more than they do now.”

Question.—Can this be done with a good conscience?

Solution.—No, by this action the man sins against charity. It would be a duty of charity to explain to the owners the value of their land and the error they are making, instead of turning their ignorance to one’s own advantage. That the man pays them more for their acres than the mine does, renders the unfairness somewhat less, but does not remove it. The appearance of a generous action is merely a pretense, and cannot deceive one as to the selfish motive of the whole proceeding. Here as always the words of Christ apply: “Omnia quaecumque vultis ut faciant vobis homines, et facite illis’ (Matth. 7, 12). A man of genuine charity, a true friend of the people, would employ his better knowledge to the benefit of his neighbors and would either divide the profit with them, or, since they are more in need than he, give them the whole profit and thus protect the poor from great disadvantage.

It may be asked whether these transactions, dictated by egoism, are unjust and unlawful, whether therefore the wealthy man in question is under the obligation of making restitution? To this is to be answered: No; for here it is not question of an error as to the substance of the object purchased, but as to its accidental qualities, which happen to render it more valuable to the mining company and to this wealthy man, than to other purchasers. The country people’s error is, therefore, not an essential but an accidental one, and this renders the purchase of itself not invalid. But the chief point is this: the error was not brought about through cheating or deceit: the wealthy man did nothing to give to the owners an erroneous view as to the value of their fields; he therefore is not the effectual cause of their error and of the detriment suffered by them through him. Of course, the wealthy man let it take place, and did not prevent the harm which was caused the farm owners. But a non obstans is obliged to restitution only when it was his duty ex officio, contractu vel quasi contractu, to prevent the injury, and in such relation the wealthy man does not stand to the farmers, as he is not appointed their protector, nor master or superior, nor even adviser. He is obliged to avert harm to them only as a matter of charity towards his fellowman; but a violation of charity that is not accompanied by a violation of justice does not impose the obligation of restitution. Therefore the action in question was not unjust, but unfair and uncharitable.

Capital, according to Karl Marx, comes to the world “dripping from every pore from head to foot with blood and dirt.”¹ It is, according to its very nature, nothing else than the unpaid-for, stolen labor of the workman; or, as Lassalle calls it, “the property of others” (Fremdtum). In order to substantiate this death-verdict on capital, Marx avails himself of his peculiar theory of value which we have discussed in detail in an earlier chapter (p. 46 sqq.).² He distinguishes two kinds of value—value in use and value in exchange. Value in use consists in the utility of an object to satisfy human wants; value in exchange consists in the ratio in which commodities are exchangeable for one another. Value in use, it is true, forms the basis of value in exchange, in so far as only useful things can have exchange-value. But in other respects value in exchange is entirely independent of value in use. The exchange-value is determined by the labor embodied in an object.

¹ Capital, vol. I. p. 726.

² There are some who wish to retain the materialistic conception of history without accepting Marx’s theory of value. But then they cease to be adherents of Marxian socialism. It is indeed inadmissible to represent the matter as if Marx had argued thus: Surplus-value is unjust, therefore capitalist society must be abolished. This is not Marx’s view of the matter. His real argumentation is rather as follows: Surplus-value is essentially based on exploitation, and by its very nature tends to an increase of exploitation by which society will finally be divided into a mere handful of billionaire capitalists and a countless herd of proletarians, and then the collapse will ensue. In this sense Marx undoubtedly considered his theory of surplus-value as a fundamental tenet of his system. His conception of capital, capitalism, accumulation of products, is based entirely on the doctrine of surplus-value, which in turn necessarily presupposes his theory of value. Also Engels, as we have seen above (p. 35), plainly tells us that by the materialistic conception of history and by the doctrine of surplus-value, socialism has received its scientific character.

Let Marx explain his idea himself.¹ He says: “Let us take two kinds of merchandise, e.g., wheat and iron. Whatever may be their ratio of exchange, it can always be expressed by an equation in which a certain quantity of wheat equals a certain quantity of iron, e.g., one bushel of wheat=x pounds of iron. What is the meaning of this equation? It means that an equal amount of something common to both is contained in two different things. Both are equal to some third quantity, which in itself is neither the one nor the other. But each of the two, in as far as it is value in exchange, must be resolvable into this third element.”

¹ Capital, vol. I. p. 3.

But what is this third element common to both? “This common element cannot be any geometrical, physical, chemical, or other natural quality of the merchandise. Its material qualities come into consideration only in so far as they contribute to its utility. On the other hand, precisely the abstraction from the value in use evidently characterizes the ratio of exchange of different commodities. Within the limits of this ratio one kind of use-value is worth as much as any other provided it is present in the right proportion.” What then is that remaining element? “If we abstract from the use-value of merchandise, it retains but one quality, the quality of being the product of labor. But also the labor product has been changed in our hands. If we abstract from its use-value, we abstract also from its material composition and form by which it is useful. It is no longer a table, or a house, or yarn, or any other useful object. All its external qualities are, as it were, blotted out. It is also no longer the product of the work of the joiner, or carpenter, or spinner, or of any definite productive labor.” “Nothing has remained but the same ghostlike actuality, a mere crystallization of human labor without distinction, i.e., of the expenditure of human labor capacity without regard to the manner of expending it. These objects now represent only the fact that in their production human labor has been expended, human labor has been stored up.”¹

¹ Capital, vol. I. p. 4.

“A value in use or an object has value only because human labor considered in the abstract is embodied or materialized in it. But how are we to measure the amount of its value? By the amount of ‘value-creating substance,’ i.e., labor, contained in it. The quantity of labor itself is determined by the time employed, and the labor-time again is measured by the unit of certain periods, as hours, days, etc.”

“Now it might seem that if the value of any commodity is determined by the amount of labor expended in producing it, this commodity would be the more valuable the lazier and clumsier its producer, because he would need more time to produce it. The labor, however, which forms the substance of value must be equal human labor, an expenditure of equal labor capacity. The sum total of labor capacity in the whole society . . . is taken here as one and the same human labor capacity, although it consists of countless individual labor capacities. Each one of these individual capacities is the same as any other in so far as it has the character of average labor capacity and as such produces an average amount of social labor and needs therefore in the production of any commodity only the average labor-time or the socially necessary labor-time. Socially necessary labor-time is the time required to produce a certain value with given normal social conditions of production, and with the average social degree of skill and intensity of labor.”²

² Ibid., p. 5.

How Marx has utilized the principle that exchange-value is something intrinsically independent of use-value and consists only in ‘crystallized labor-time” for the explanation of capitalistic “surplus-making,” we have already shown (p. 46 sqq.). The Marxian doctrine of surplus-value and of the process of accumulation is inseparably connected with his theory of value. If the latter is false, then all the consequences deduced from it are null and void. Therefore we must examine this theory more closely.

For his fundamental principle that the exchange-value of an object is not determined by its use-value, but exclusively by the labor expended upon it, Marx can appeal to the authority of the greatest political economists, Adam Smith, Ricardo, and others. Socialism in this as in many other regards, is only the lineal descendant of liberalism; it only draws the logical inferences from the principles of liberalism. Not until Marx, Lassalle, and other socialists had taken hold of this principle to use it as a deft weapon against private capital did any misgiving arise concerning it; then authors began to abandon it or at least to restrict it very materially.

In reality this principle is untenable. To understand this we need but inquire into the notion of value. It is one of those simple and primitive notions which are evident to every man and become obscured only when we attempt to analyze them. An object is said to be of value to us if it in any way appears desirable. Value therefore includes an objective and a subjective element. In order to be of value to us an object must be good in itself or at least it must appear to us as such, and moreover it must have some relation of adaptation to us, i.e., it must appear as in some way conducive to our preservation and perfection. In other words, value is the capacity of any thing to serve the needs and desires of man and therefore to be estimated as desirable.¹

¹ Cf. Devas, Political Economy, p. 4.

Also purely spiritual goods are of value. The kingdom of heaven is far more valuable than any earthly goods, and therefore the prudent man is like unto a merchant who sacrifices all his earthly possessions to acquire the pearl of great price spoken of in the Gospel. In a similar manner life and health are more valuable than money and estates.

Of economic value we speak in a more restricted sense. It is the business of economics to provide those material goods which are needed for the support, continuance, or enjoyment of man’s material and intellectual life on earth. Therefore the economic value of these goods is the capacity they are estimated to possess of satisfying the above-mentioned needs.¹ Our striving after well-being impels us to aim at increasing the values at our disposal and to prevent their decrease.

¹ Ibid., p. 5. Cf. also Philippovich, Grundriss der polit. Oekonomie

(1901), p. 6.

In economic goods a twofold value may be distinguished: value in use and value in exchange. Also Marx rightly makes use of this distinction which we find already adopted by Aristotle and his commentators. Aristotle² distinguishes a twofold use of earthly goods: the one is proper to an object according to its peculiar character (χρῆσις οἰκεία); the other is common to it with all other objects (χρῆσις οὐκ οἰκεία). The philosopher illustrates this distinction by the example of a shoe. A shoe has a twofold use: the first is peculiar to it in contradistinction to other objects, and consists in this, that it can be used for the protection of the foot; the second consists in this, that it may be exchanged for other goods. This second use is common to the shoe with all other objects of merchandise. It may therefore be called common use or secondary use.³ Value in use is therefore a far more comprehensive notion than value in exchange. Exchange-value is also a kind of use-value, but not every value in use constitutes an exchange-value. Air and light are of continual value in use, but they are of no value in exchange.

² Polit. I, 9. St. Thom. in I, Pol. l. 7. Silv. Maurus in I. Polit. c. 6, n. 2.

³ This distinction of use-value is much clearer, simpler, and more objective than those which we generally meet with in the works of modern political economists. Many call use-value the fitness of an object for the use of the possessor himself, and exchange-value the fitness of the object to be given in exchange. But exchange itself is a use of the object by the possessor. Consequently the first member of the definition contains also the second. Others call use-value immediate value, and exchange-value mediate value. Others again reject this distinction altogether, and divide value into subjective and objective. As often as we shall, according to the ruling custom, distinguish between use-value and exchange-value, we shall understand by use-value the fitness of an article for all kinds of use, the use of exchange alone excepted.

What constitutes value in exchange? or in other words, what is required to make any object of value in exchange? First of all it must be capable of becoming private property. Exchange or barter is a kind of contract whereby one man yields up to another some economic good and receives some equivalent in its stead. This contract presupposes private property in some form or other.

Moreover, in order to be of value in exchange an object cannot be at the disposal of everybody in any desired quantity. Thus water is of great value in use, but in ordinary circumstances it is of no value in exchange, because it is free to all and because it is therefore useless to appropriate it, since no one will barter anything for water. But within the restrictions here mentioned every object which is of value in use is also of value in exchange. But how is this exchange-value to be determined? This can be done by comparing different objects with regard to. the utility derived from them. The greater and more urgent the need which is relieved by some object in use, the smaller the quantity in which it is found, and the greater the trouble to be undergone in obtaining it, the greater also the value which we attribute to it. But in most cases this determination of value does not depend on the judgment of the individual, but on the general estimate formed by society. This estimate is not immutable, it changes according to time and place. African negroes attach great value to many things which Europeans look upon as trifles, whilst some things which are of the utmost value to civilized man are of no importance to savages.

If Marx had confined himself to the distinction of these two kinds of value, no serious objection could be raised against him; but he has completely rent them asunder. Value in use, according to him, is no factor in the determination of value in exchange. He asks, why can I exchange, e.g., a bushel of wheat for x boxes of shoe-blacking or y pounds of silk or z ounces of gold, or why can I consider these quantities of the substances indicated as being of equal value? And he answers: “In the ratio of exchange the exchange-value of different objects [appears] as something entirely independent of their values in use.”¹ Therefore, according to Marx, value in use has no determining influence on value in exchange. But this assertion of his is unproved and incorrect, and involves him in contradictions.

¹ Capital, vol. I. p. 4.

1. It is unproved. The chief argument which Marx adduces for his opinion is the following: Value in exchange must be something common to all merchandise; but this common element cannot be anything else than the human labor embodied in it, taken in the abstract. Therefore the labor contained in an object forms its exchange-value.

We grant that exchange-value is something common to all merchandise, because the various objects of merchandise may be compared with each other according to their value in exchange. But we deny that this common element consists only in the labor contained in them. Marx does not produce any arguments for this opinion, but only mere assertions.

“The common element in all kinds of commodities cannot be a geometrical, physical, chemical, or any other natural quality of the goods themselves. Their physical properties come into consideration only in as far as they go to constitute their utility, or use-value. On the other hand, the exchangeableness of commodities is evidently characterized by abstracting from their usefulness. In regard to exchange the use-value of one object is just as much as the use-value of another, provided it be forthcoming in due proportion. As to their use-value, goods, in the first instance, differ in quality; but as to their exchange-value they differ only in quantity, and contain not a particle of use-value.”¹

¹ Capital, vol. I. p. 12.

This passage contains only assertions in lieu of arguments; nay, false statements presented to us as “evident.” And yet upon these statements depend all the subsequent conclusions. We are surprised, in fact, that Marx so confidently affirms without proof that apart from labor there is no common element in different goods. Aristotle, to whom he repeatedly appeals, could have taught him better. This great philosopher teaches expressly that there is a common element in all commodities, according to which they can be compared with one another and estimated. This common measure or standard of exchangeable goods, according to the philosopher,² is usefulness, that is, their fitness for supplying the wants of mankind.

² Δεῖ ἄρα ἑνί τινι πάντα μετρεῖσθαι . . . τοῦτο δ’ ἐστὶ τῇ μὲν ἀληθείᾳ ἡ χρεία, ἣ πάντα συνέχει.—Ethic. v. 8.

The commodities to be exchanged may be ever so different in other respects, they all agree in this one point that they satisfy some human need, that in some way or other they are useful and desirable. This furnishes a point of comparison and a standard of measurement.¹

¹ Hohoff (Warenwert und Kapitalprofit, p. 5) writes as follows: “Commodities become commensurable only by abstracting from their use-value. Linen, iron, wheat, the Iliad, illuminating-gas, arsenic, Eau de Cologne, and Asafœtida, etc., cannot be compared to another and measured by one another regarding their utility or use-value.” And why not? In their specific use-value they differ indeed, yet they all agree in this, that they are useful to man, that they supply some human demand, in this respect they can be compared, estimated, and measured according to a fixed standard.

2. But the assertion of Marx that labor alone constitutes exchange-value is not only gratuitous: it is also untrue. Unwittingly Marx himself has penned his own refutation. He says: “ Within the same ratio of exchange-value, the use-value of one object is as great as that of another, if it is only forthcoming in the same proportion.” Why must the use-value be forthcoming in the same proportion? Evidently because in the determination of the exchange-value the usefulness of an object is by no means indifferent, but a decisive element. Moreover, how is it that, even according to the concessions of Marx himself, useful objects only can have exchange-value for society? Certainly because use-value or utility is an essential element in exchange-value. If one, for instance, with the greatest expenditure of labor manufactured boots from pasteboard, he yet could not find customers to buy them; they would have no exchange-value, because they would be useless; in other words, because they would have no use-value. Use-value is, therefore, an essential element of exchange-value.

But there are objects of use-value which have no exchange-value. Air and light, for instance, are useful though not exchangeable commodities. Very true; but what follows from this fact? Only this, that mere usefulness does not suffice to constitute exchange-value; that other conditions must be added; but it by no means follows that those things which have exchange-value do not owe this value at least in part to their usefulness. What would Marx say to the following argument? There are men who are not artists; therefore the notion of man does not belong to the notion of an artist. The conclusion drawn by Marx is not more logical. In order that a useful object may have exchange-value it must be fit to pass into the exclusive possession of an individual, and must not be forthcoming in such quantities that all can have of it whenever they please. But this supposed, the exchange-value of an object depends chiefly upon its use-value, or utility. In the primeval forests of South America wood has no exchange-value, either because there is no one to use it, or because every one can have it for nothing, like air and water. But suppose a merchant brings several shiploads of different kinds of wood to a European harbor, what will then be the standard of its value? Is it the amount of labor, the amount of expense and time, which the transportation has cost? Certainly not; otherwise all different species of wood conveyed from South America would sell at the same price, which is not the case. The better and more durable material will sell at a higher rate. Fine cedar or mahogany, abstracting altogether from the labor expended on it, has a much greater exchange-value than pine or birch.

By a thousand such instances we might show that the value or price of an article is determined in the first place by the general estimate of its usefulness. Good wine sells at a higher rate than bad wine, although the vintner may have expended the same amount of labor on the preparation of both. Why do our mine-owners sell coal from the same mine at different prices? Because the quality is different. In short, it is the quality, or the different degrees of objective goodness, that generally determines the exchange-value of objects independently of the amount of labor consumed upon them.

It would be carrying coal to Newcastle to attempt any further proofs of this truth. Nor can it be objected against the examples alleged that in all cases labor is necessary to give the object real value, for we do not deny that labor has a certain influence upon the exchange-value; but we do say that labor alone does not constitute exchange-value. For the rest, labor generally comes into account only in so far as it tends to give greater usefulness to a thing. Besides, there are in nature also objects which require no labor in order to be made useful, but which may be directly appropriated and exchanged for other commodities. Such are, for instance, coal-oil, wild fruits, etc.¹ Thus also in the products of human labor the exchange-value is determined in the first place not by the “socially necessary labor-time,” but by their artistic qualities or other intrinsic perfections. If two authors, after an equal amount of labor and preparation, publish their works, which of the two will have the larger sale? His, no doubt, which appears to the public more perfect in contents and expression. What determines the value and price, of paintings at an exposition? Surely not the “socially necessary labor-time,” but their intrinsic perfection, the fruit of genius rather than of labor. Why will a painting or even a pencil-sketch of Raphael or Dürer fetch such fabulous prices? Why are old manuscripts, rare prints, ancient medals and coins, and other things of that kind paid for so lavishly? Is it on account of the labor represented in them? Is it not rather their rarity, their perfection, their importance for the history of civilization, or something of that sort?

¹ Cf. Von Hammerstein, S. J., Stimmen aus Maria-Laach, vol. x. p. 426; Hitze, Kapital und Arbeit (1880), p. 9 sqq. According to St. Alphonsus Liguori (Theol. moral. l. 3, n. 801 sqq.) it is the common doctrine of Catholic theologians that the price or exchange-value of an object depends not only on the labor expended in its production, but also on many other circumstances, on the utility of the commodity, on supply and demand, etc. Thus St. Thomas (S. theol. 2. 2. q. 77, a. 2 ad 3) declares that the price of an article of merchandise is determined not by the degree of perfection of its nature, because sometimes a horse is dearer than a slave, but by the utility which man derives from the object in question.

3. Marx involves himself in contradictions. According to Marx’s theory of value the rate of profit, i.e., the relation of surplus-value to the total capital invested in any enterprise, must needs vary according to the “organic composition of the capitals.” The value of raw materials and machines, the amount of materials used, and the wear on the machines differ considerably in different undertakings.¹ It is therefore to be expected that at the same rate of surplus-value every branch of industry should show a different rate of profit. But what is the case in reality? Here we find it to be a general law that capitals of equal magnitude yield equal profits regardless of their composition. Marx himself concedes the fact and acknowledges that it appears to be in flagrant contradiction to his law of value. But now how does he set about harmonizing facts and theory? Spirited controversies were carried on for years, within and without socialist circles, as to how Marx would unravel this Gordian knot, a feat which he had reserved for the third volume of his “Capital.” The volume has finally been published by Engels, and lo! Marx simply abandons his law of value. He confesses quite candidly that the rate of profit is independent of the composition of capitals, and that mercantile commodities are sold not according to their value— i.e., the labor contained in them—but partly below, partly above their value.¹

¹ Capital, vol. III. part I. p. 132.

¹ Ibid.

Therefore Marx in the first instance bases his law of value upon experience, and acknowledges finally that his law is contradicted by experience. Of course, he endeavors to prop up his tottering law of value by the assertion that the sum total of prices paid corresponds to the sum total of values.² This contention is ably refuted by Boehm-Bawerk, who remarks that the purpose of the law of value can be no other than to formulate and explain the actual ratio of exchange of the various commodities. We wish to know why, e.g., a coat has as much value in exchange as twenty yards of linen, and according to what standard the exchange is effected. This is the purpose assigned to the law of value by Marx himself. But the ratio of exchange comes into question only in reference to single commodities.³ But if it is granted that the ratio of exchange of single commodities is not determined by their value (the labor contained in them), then also the law of value is abandoned, and it is an arbitrary and useless assertion to maintain that the law of value remains in force for the sum total of commodities exchanged.

² Ibid., p. 140.

³ Boehm-Bawerk, Zum Abschluss des Marxschen Systems, p. 116 sqq.

4. If, therefore, the exchange-value of commodities is not determined exclusively by labor, but, above all, by their utility and applicability in the satisfaction of human needs, then also the entire theory of surplus-value, of the nature of capital, of the accumulation of capital, etc., must needs collapse, for all these are but deductions from the theory of value. We agree with Marx when he says: “The wages of labor are not what they seem to be [to many], namely, the value or price of labor itself; they are but the value or price of labor capacity.” For, the contract between employer and laborer is ordinarily no more than a contract of hire. The laborer hires out his labor capacity, and in return receives the price of hire, in other words, the price for his hired-out labor capacity. But when Marx maintains that the exchange-value or the value of hire of human-labor capacity is determined by the cost of its production, he is but drawing a false conclusion from his theory of value. For, even supposing that two laborers need equally as much for their own support and for their families, still their labor capacities may differ widely as to their exchange-value, in so far as one man is more experienced, talented, skilful, and reliable than the other. A skilled worker will find employment sooner and receive better pay than the raw novice. As in all commodities, so also in labor capacity the value in exchange is determined in the first place by utility and practical applicability.

Just this very example, the difference in exchange-value of different labor capacities according to the utility of each, deals the death-blow to the Marxian theory of value. In accordance with this theory the exchange-value of labor capacity should be regulated by the cost of producing and sustaining it. This, however, is not the case. Why is a higher salary awarded to a capable, experienced, reliable manager, engineer, physician, or foreman than to an ordinary workman? Why do the perquisites of “star” actors, musicians, and singers often reach such enormous figures, whilst others in the same walk of life must be satisfied with a mere pittance despite their painstaking labor? Does the “star” actress, perhaps, need so much more for her sustenance than another? Or can talent, genius, beauty of voice and action, and similar qualities be reduced to the standard of “average labor-time,” so that their cost may be figured out?

The collapse of Marx’s theory of value necessarily implies also that of his other assertion, that the laborer needs but a part of his actual labor-time in order to produce an equivalent for the price of his labor capacity—the necessary labor-time—and that during the rest of the time he is doing “surplus work” for the benefit of the capitalist. The untenability of this assertion becomes still more evident, if we consider that according to Marx “the value of labor is determined not only by the labor-time necessary for the sustenance of the individual laborer, but also by that required for the sustenance of his family.”¹ Who on earth has told Marx that every wage-earner imparts to the manufactured commodities not only as much exchange-value as is required for his own support and that of his family, but also something over and above, which is freely appropriated by the capitalist as surplus-value?

¹ Capital, vol. I. p. 359.

In fine, the entire socialist theory of value is so absurd that we are forced to ask ourselves, how could a man of Marx’s talent and capacity hit upon such a theory and make it the foundation of his whole system? The only explanation to be found in this is that in a very one-sided manner he took into consideration only the condition of industrial wage-earners, generalized that which is applicable to them under certain circumstances, and by purely ideological processes developed it into a comprehensive theory, into a so-called “scientific” system.

To meet a possible objection we would here remark that even in the socialist state the exchange-value of goods would still remain, and could not, even in socialistic circumstances, be determined by the labor spent in its production; for not only in commerce with foreign nations, but also in the division of produce among individuals, the exchange-value of goods would have to be taken into account, and even in this case it would be determined chiefly by the standard of usefulness. If two laborers in the socialist state would perform the same amount of work, it would be unjust to give to one as a remuneration a case of Johannisberger or Riidesheimer, and to the other the same amount of bad Mosel wine, or cider, on the plea that both the productions cost the same amount of labor. So also in the socialist state more labor could be procured for a bushel of good wheat than for the same amount of bad wheat, although the expenditure of labor upon the bad wheat may be just the same as upon the good. The same may be said of all similar commodities.

The price of a thing is the expression in money of its value. But what is value? What is it that makes a pair of boots sell for sixteen shillings in a certain place on a fixed day? The question is one of primary importance in the science of Political Economy. Jevons¹ quotes with approval the following words of Mill: —

¹ Theory of Political Economy, p. 80.

Almost every speculation respecting the economical interests of a society thus constituted, implies some theory of value; the smallest error on that subject infects with corresponding error all our other conclusions; and anything vague or misty in our conception of it, creates confusion and uncertainty in everything else.

The theory of value is picturesquely said by a foreign writer to be the dragon which guards the entrance to economic science; while another declares that he who understands value, understands half of the difficulties of the science of Economics.² If the notion of value is fundamental in Economics, it is of great importance, to say the least, in Moral Theology, and particularly in questions concerning justice and contracts. It may be of interest to inquire what economists have to say on a subject which specially belongs to their province, and to compare it with the received doctrines of Moral Theology. According to a recent writer, economists have shown the teaching of theologians on the point to be chimerical and absurd: and as I propose to make the words of this writer the basis of my remarks, I will quote him at length : —

² C. Antoine, S.J., Economie Sociale, p. 258.

In modern times the form of economic doctrine has been affected by the fact that it has been so much discussed by men who were accustomed to deal with physical and mathematical problems, and who brought their habitual methods of reasoning to bear on the phenomena of supply and demand. In a similar fashion the economic doctrine of the thirteenth century in Christendom was affected, as far as its form was concerned, by the engrossing studies of the time; economic problems were discussed by men who were habituated to the methods of metaphysics. In accordance with current modes of thought, they tried to determine an ideal standard which should be realized in particular transactions, and sought for a definite conception of a ‘‘just price’’; the practical inquiries then resolved themselves into means for discovering the just price of each particular thing. From the modern point of view this whole quest was chimerical: prices are always fluctuating, and must, from their very nature, fluctuate. According to the ‘‘plenty or scarcity of the time’’ there will be great differences in the quantities available, and, therefore, in the relative values of wheat, cloth, coal, and commodities of every sort. We know, too, that the commodity used for money must vary in value from time to time, and that, therefore, there must be continual fluctuations not only in values but in prices as well. The attempt to determine an ideal price implies that there can and ought to be stability in relative values, and stability in the measure of values, which is absurd.

The medieval doctrine and its application rested upon another assumption, which we have outlined. Value is not a quality which inheres in an object, so that it shall have the same worth for everybody; it arises from the personal preferences and needs of different people, some of whom desire a given thing more and some less, some of whom want to use it in one way and some in another. Value is not objective—intrinsic in the object—but subjective, varying, with the desires and intentions of the possessors or would-be possessors; and because it is thus subjective, there cannot be a definite ideal value, which every article ought to possess, and still less a just price as the measure of that ideal value.³

³ Dr. Cunningham, Western Civilization in its Economic Aspects, 1900, p. 78.

According to Dr. Cunningham, therefore, the medieval theory of a just price for everything, and the medieval concept of value have been shown to be absurd and untenable by modern economic science. The schoolmen of the Middle Ages, habituated to the study of metaphysics, looked upon value as a quality intrinsic to the thing itself. To them it was something objective, definite, stable, and fixed; and so the measure of value, or price, was something stable and fixed also.

On the contrary, the doctrines of modern economic science have been formulated by men accustomed to deal with the physical and mathematical sciences. These men have brought their strictly scientific methods to bear on the economic problems of supply and demand. They have taught us that the medieval quest after a just price for commodities was as chimerical as the quest after the San Grail. Taught by them we now know that prices are not stable and fixed, but are always fluctuating, and must of their very nature fluctuate. The plenty or scarcity of the time will affect the quantities of the available commodities, and so will affect the relative values. We now know that. money itself, the measure of value, is subject to the same economic laws as other commodities, and that it fluctuates in value as they do. So that the attempt of the schoolmen to arrive at a just price for each particular thing involved the two absurdities of supposing that there can be stability in relative values, and stability in the value of money.

Let us see what the schoolmen really did teach about the just price of commodities. It is easy to state some absurd theory, ascribe it to the metaphysical scholastics of the Middle Ages, and then proceed to demonstrate its absurdity. It is a more scientific method of procedure first, as the scholastics were fond of doing, to make sure of the fact — Primo, queritur utrum sit.

Molina, one of the great doctors on justice, will tell us what the common teaching of the schoolmen concerning the just price of commodities really was. Almost any other of a score of scholastic theologians would serve our purpose equally well, and I shall refer to one or two others in the course of my remarks, but in the main I propose to follow Molina. The difference between the date at which he lived and the thirteenth century, which Dr. Cunningham has specially in view, need not trouble us, for there was no change of doctrine in the meantime; Molina’s teaching is merely that of St. Thomas somewhat amplified.

This scholastic doctor then is careful in the first place to say what the just price is not derived from. It is not, he says, to be measured by the excellence of things according to their own nature and intrinsic qualities, but according as they serve man’s use and benefit. A mouse considered in its own nature is a more excellent thing than corn, but mice are worthless, while corn, which serves man’s necessities, has its price.

However, he proceeds, the price of a thing does not depend merely upon its usefulness for supplying man’s necessities, but it depends a very great deal upon the estimation which men commonly choose to have of it with reference to its use. Thus the just price of a gem, which is for ornament only, is greater than that of a large quantity of corn, wine, meat, cloth, and horses. And among the Japanese a piece of rusty iron or cracked pottery is of immense value on account of its antiquity; while among us it is worth nothing at all. And mere ornaments of colored glass have a far higher price among the Ethiopians than gold, which they exchange for them. Now all this is brought about solely by the common estimation in which things are held in the place where they are exchanged, so that such trafficking is not to be condemned, though the want of culture and the manners of such peoples are sometimes laughable.

So that the just price of a thing depends a great deal upon the common estimation of men in any place; and when without fraud or any unfair dealing, a commodity is commonly sold at a certain price in any place, that may be considered the just price, as long as the circumstances which cause prices to vary remain unchanged. The Roman Civil Law⁴ and the common opinion of doctors agree on this point.

⁴ L. Pretia rerum, Dig. ad legem Falcidiam.

But it must be observed, adds Molina, that a great many circumstances alter the prices of commodities. Thus scarcity makes the just price rise, while plenty makes it fall; the greater number of competing buyers at one time than at another, or their eagerness to buy, makes prices rise, on the other hand the fewness of buyers makes them fall; the greater demand at one time than at another, while the supply remains constant, as of horses in time of war, makes prices rise. The scarcity of money in any place makes the price of other things fall, while abundance of money makes the price of other commodities rise. For the less the supply of money in any place the greater its value, and thus many more other goods are bought with the same sum. The manner of sale, too, alters the price, as we see in sale by auction, or when a man is anxious to find buyers and seeks them, or in sale by retail.⁵

⁵ Molina, De Justitia, tract. ii., disp. 348.

The just price which we have been considering was called by some theologians, following Aristotle, the natural price; not, as Molina is careful to explain, because it did not depend largely on men’s estimation, nor because it was not very inconstant and changeable, but to distinguish it from the legal price, which was settled for some commodities by law. Inasmuch as the natural, or vulgar price as it was also called, depended upon men’s estimation, wants, and desires, which are very various, it could not be a quantity exactly determinate and precisely defined, it necessarily admitted of a certain latitude; and so theologians distinguished the highest, the lowest, and the middle price, and taught that justice would be done if the seller kept within those limits.⁶

⁶ Ibid. disp. 347.

All this, even in the light of modern economic doctrines, seems eminently practical and thoroughly in keeping with common sense; I fail to detect in it anything that savors of the “ metaphysical,” if that term is intended by Dr. Cunningham to mean unreal and unpractical. The whole point of the teaching of the theologians lies in this, that there is such a thing as a fair and reasonable price for commodities, in which English law and English juries agree with them, and that it is matter of justice to keep to it in contracts. The scholastics certainly knew as well as the modern economist that prices are always fluctuating; they knew that the plenty or scarcity of the time has great influence on the relative values of commodities of every kind; they knew of what is now called the law of supply and demand; they even knew that money is exposed to constant variations in value, and that it would be absurd to look for stability either in relative values, or in the measure of values. In fact they knew all that Dr. Cunningham has taken for granted that they did not know.

From what has already been said, it is quite clear also, in spite of what Dr. Cunningham seems to imply, that the scholastics knew that “value is not a quality which inheres in an object, so that it shall have the same worth for everybody.” Molina expressly states that it arises from the preferences and needs of different people, with their different desires and wants. As we shall presently see they unanimously denied that the seller can charge for any special individual advantage which may accrue to the buyer from the bargain; thus clearly supposing that social and individual value were two very different things. However, a difference between the scholastic doctrine on value and modern theories is touched upon, when Dr. Cunningham proceeds to say : —

Value is not objective—intrinsic in the object—but subjective, varying with the desires and intentions of the possessors or would-be possessors; and because it is thus subjective, there cannot be a definite ideal value, which every article ought to possess, and still less a just price as the measure of that ideal value.

According to modern theories then, value — exchange value is meant — is merely subjective, varying with the desires and intentions of the possessors or would-be possessors of a commodity; and so there is no definite value which a thing possesses, and no just price, for a just price is merely the just measure, the proper equivalent of value. A man may sell a horse for what he can get, he may exact whatever interest the borrower will give him for a loan, he may pay his workmen as little as necessity forces them to take for a day’s wage. There is no just price for commodities, justice is not violated by however unconscionable a bargain. Certainly these are conclusions of great importance, and if they had been proved to be true, we should have to modify some of the rules of Moral Theology. Catholic theologians of the Middle Ages, as well as their successors of to-day, are unanimous in teaching that there is such a thing as a just price for commodities, that justice can be violated by charging too much for what is sold, and that individual wants and tastes do not finally settle the just price. “The estimation of one or two,” says Lugo,⁷ “does not suffice to raise the price, but the common estimation is required.” This doctrine is common to all theologians, and most are content to quote in proof of it the Roman Civil Law: “The prices of things are not settled by the tastes or utility of individuals, but by those of the generality of people.”⁸ The great authority of the Roman Law, that ever-living monument of written reason, was of itself considered sufficient to settle the question; but some went further in their inquiries as to the method of arriving at the just price. Scotus taught that to estimate the just price of his merchandise the merchant should reckon up all the expenses which he has incurred in buying, transporting, housing his goods, then add to them something for his labor and trouble, and something else to compensate for the risks he has run: what corresponds more or less to all these items, will be the just price, he says.⁹

⁷ De Justitia, xxvi., n. 42.

⁸ L. Pretia rerum,

⁹ Molina, disp. 348.

In modern phrase the costs of production were the measure of value, according to Scotus. This opinion was commonly rejected by other theologians, who pointed out that if this were so, the merchant who had lost a portion of his goods might raise the price of the rest to compensate himself; which could not be admitted, for the price of goods is not measured by the profit or loss of the seller, but by the common estimation concerning their value in the place where they are sold, consideration being given to all the circumstances; besides Res perit domino, and it was not fair that the public should bear the private losses of the merchant.

63 Dig. ad legem Falcidiam.

The common estimation then is the cause of value and the measure of value, according to the scholastics; and if the formula be understood as they understood it, there seems no objection why “the common estimation ” should not still be used as a correct term for the cause and the measure of what economists call market prices. For certainly the market price of an article, whatever it may ultimately depend upon, is settled proximately by the common estimation of the value of the article in the particular market, at the time in question. Some of the most recent writers on Economics state this doctrine in terms as precise as those used by the scholastics. Thus Mr. J. A. Hobson¹⁰ says: —

¹⁰ The Social Problem, 1901, p. 144.

Now, just in proportion as exchange or market-value enters and displaces use-value, so does social determination of value displace individual determination. While value in use is strictly personal, value in exchange is distinctively social. A market, however crudely formed, is a social institution ; the value of our farmer’s produce is partly determined by the personal labor he has put into them, but partly by the needs and capacities of others, and not even by the needs and capacities of any definite individual, but by a great variety of needs and capacities expressed socially through the instrument of a market price, which is a highly elaborate result of bargaining, and does not represent the needs or the capacity of any single purchaser.

It would seem, then, that the difference of view between theologians and economists appears prominently and practically only with regard to non-market prices. The theologian teaches that justice requires that there should be an equivalence of social value between the price and the thing bought; (I say “social value,” because, of course, each party to a contract hopes to gain in individual value in use, otherwise there would be no exchange;) that the just price is settled by the common estimation of the value of an article; that value is partly objective, inasmuch as it supposes usefulness, capacity to be esteemed and desired, in the object, partly subjective, not, indeed, with reference merely to the wants and desires of the buyer and seller, but with reference to the common estimate of people at the particular time and place. However, theologians commonly allow the seller to charge for any special private loss of any sort which he may suffer from parting with his property, the pretium affectionis as it is called; and so to this extent they concede that subjective and private wants and desires may be allowed to influence the terms of the contract. What they agree in rejecting is the view that the seller may exact a higher price on account of some private necessity of the buyer, for then he might sell dearer to the poor than to the rich, or on account of some special advantage accruing to the buyer from his purchase, for then he would sell what did not belong to him, and sin against justice.¹¹

¹¹ St. Thomas II. II. q. 77, a. 1.

On the other hand the economist considers that the value of an article and its price are settled by the consent of the parties to a bargain; no man would give 100 per cent. interest for money unless it were worth his while; the loan, therefore, is worth that price to him, and the lender does him no injustice in taking it.

This, of course, would be true if both parties to the contract were equally intelligent, free, and independent; a man, if he chooses, may give what he likes of his own for any commodity ; if he gives a sovereign for a cup of tea at a bazaar, held for a charitable purpose, nobody will have anything but praise for his generosity. But usually when an unconscionable bargain is struck the parties are not on equal terms.

If a man promises 100 per cent. for a loan, when the current rate of interest on money is 3 per cent., or if a laborer undertakes to work for sixpence a day, when the common rate of wages is sixpence an hour, hard necessity alone, or perhaps ignorance, will have been the cause of his consent to such unfair terms. In such cases theology teaches that he who exacts such hard terms commits a sin against justice, and is bound to restitution; but the theory of value, on which this theological doctrine rests, is, according to Dr. Cunningham, an “ assumption which we have outlived.”

The difference between theological and economic doctrines on this point may partially perhaps be explained by the difference of standpoint assumed by theologians and economists respectively. Theologians consider the question from an ethical point of view, they condemn whatever the Christian code of morals condemns; on the other hand many economists at least treat the phenomena of political economy as they treat the phenomena of the physical sciences. The law of supply and demand is, for the purposes of the science, studied and reasoned upon with the help of mathematics as if it were as necessary and determinate as a law of astronomy; most economists abstract from questions of morality. Thus Jevons wrote: —

I conceive that such a transaction must be settled upon other than economical grounds. The disposition and force of character of the parties, their comparative persistency, their adroitness and experience in business, or it may be a feeling of justice or of kindliness really influences the decision. These are motives altogether extraneous to a theory of economy.¹²

¹² The Theory of Political Economy, p. 124.

Perhaps Dr. Cunningham belongs to this class of economists, and perhaps he would not disagree with the theologians if he treated the matter from their point of view, for he writes: —

We feel that it is unfair for the economically strong to wring all he can out of the economically weak, or to trade on terms in which ‘‘common estimation’’ is notoriously set aside. We have given up as impracticable many of the old attempts to put down hard bargains with a high hand: but modern moral feeling does not sensibly differ from that of medieval times in the desire, if it were possible, to interfere with the action of any dealers who are able to enrich themselves through the necessities or the ignorance: of others, and to gain at their expense. If we tried to find a test by which to discriminate hard bargains we could scarcely do better than adopt the medieval phrase and say that hardship arises when a bargain is made without reference to ‘‘common estimation.’’¹³

¹³ Western Civilization, p. 80.

This is admirable, but we hardly see how it can be reconciled with other passages of the same author. In other passages he seems to condemn the theological doctrine not only as out of place in economics, but as false in itself. He thus seems to agree with many other writers, the earliest of whom is said to be Hobbes, who rejected the hitherto received doctrine on commutative justice, and substituted an invention of his own. “The value of all things contracted for,” he says, “is measured by the appetite of the contractors: and therefore the just value is that which they be contented to give.”¹⁴

¹⁴ Hobbes, Of Man, p. 187.

This assertion Hobbes did not attempt to prove, nor has it been proved by any of his followers. The argument drawn from marginal values is no proof that the subjective and individual theory of value is in accordance with truth and justice; it merely formulates the fact that as a rule people will exchange commodities as long as it is worth their while to do so.

Economists are by no means agreed as to the nature of value, although all confess that it is a question of the greatest difficulty; some hold that it is purely subjective, depending upon the desires of each individual; others, that it is the same thing as private utility; others, that it is social utility; others, that it is the relation between two services exchanged ; others, that the value of a commodity is the labor bestowed on it, and so forth. None of these theories is commonly accepted, and none of them is an improvement on the old doctrine that common estimation is the cause and measure of value.¹⁵ The merely subjective theory, which seems to be most in vogue, fails to furnish any reasonable ground for condemning transactions which all, economists included, admit to be wrong. It even furnishes some sort of justification for the iniquities of the swindler, the usurer, and the sweater. I cannot do better than conclude this article with the concise argument by which, in his Encyclical on the Condition of Labor, Leo XIII proves its falseness as applied to the price of labor.

¹⁵ Professor Smart in his little book on The Theory of Value

We now approach a subject [says the Holy Father] of very great importance, and one on which, if extremes are to be avoided, right ideas are absolutely necessary. Wages, we are told, are fixed by free consent, and, therefore, the employer, when he pays what was agreed upon, has done his part, and is not called upon for anything further. The only way, it is said, in which injustice could happen would be if the master refused to pay the whole of the

(1914) says: “The history of economic science is strewn with the wrecks of theories of value,” p. 1.

wages, or the workman would not complete the work undertaken. ...

This mode of reasoning is by no means convincing to a fair-minded man, for there are important considerations which it leaves out of view altogether. To labor is to exert oneself for the sake of procuring what is necessary for the purposes of life, and most of all for self-preservation. In the sweat of thy brow thou shalt eat bread. Therefore a man’s labor has two notes or characters. First of all, it is personal; for the exertion of individual power belongs to the individual who puts it forth, employing this power for that personal profit for which it was given. Secondly, man’s labor is necessary; for without the results of labor a man cannot live, and self-conservation is a law of Nature which it is wrong to disobey. Now, if we were to consider labor merely so far as it is personal, doubtless it would be within the workman’s right to accept any rate of wages whatever; for in the same way as he is free to work or not, so he is free to accept a small remuneration or even none at all. But this is a mere abstract supposition; the labor of the working man is not only his personal attribute, but it is necessary, and this makes all the difference. The preservation of life is the bounden duty of each and all, and to fail therein is a crime. It follows that each one has the right to procure what is required in order to live, and the poor can procure it in no other way than by work and wages.

Let it be granted, then, that, as a rule, workman and employer should make free agreements, and in particular should freely agree as to wages, nevertheless there is a dictate of Nature more imperious and more ancient than any bargain between man and man, that the remuneration must be enough to support the wage-earner in reasonable and frugal comfort. If through necessity, or fear of a worse evil, the workman accepts harder conditions because an employer or a contractor will give him no better, he is the victim of force and injustice.

In the Irish Theological Quarterly for October, 1914, Fr. Kelleher subjected the doctrine of the just price which I have been defending, to some adverse criticism. He writes:

The difficulty against this, which we may call the general desirability, convenience, or utility theory, is that it is only a variety of the fascinating game of sending the fool farther. In substance it means that we can get over the objection against a subjective, individualistic standard by applying it to 100 or 1000 cases instead of to one.

THE Profiteering Act gives power to the Board of Trade “to receive and investigate complaints that a profit is being or has been made or sought on the sale of the article which is, in view of all the circumstances, unreasonable;

“To declare the price which would yield a reasonable profit;

“And to require the seller to repay to the complainant any amount paid by the complainant in excess of such price” (Sec. 1).

Some very old doctrines of Catholic moral theology are implied in these passages of the Act. During the last century those doctrines were generally rejected by the dominant school of political economists, and in too many cases they were neglected in practice by sellers of commodities. Experience has shown once again that retribution lies in wait for those who violate the precepts of the moral law. We must either return to the teaching and observance of those precepts or we shall inevitably pay the penalty for transgressing them.

According to the time-honoured teaching of Catholic moral theology, there is a fair, reasonable, and just price for all commodities in common use. That fair, reasonable, and just price may be fixed by law, and, if it is so fixed, it is matter of conscience to keep to it in buying and selling as long as the law is not obsolete. If the price is not fixed by law, it is fixed by the common estimate of those who are acquainted with all the circumstances which affect the question. The common estimate is a moral estimate, and it does not determine the price with mathematical nicety and precision. Much depends on place and time and mode of sale, on supply and demand, as well as on the varying quality of the goods. There will generally be a higher price, more than which the article does not usually fetch. There will be a lower limit below which the price does not usually sink. And there is the mean price which lies anywhere between the two extremes. There will be no injustice done provided that the price keeps within those limits, but if they are exceeded injustice is committed and restitution must be made to the injured party. That, put very briefly, was the old Catholic doctrine of the just price of commodities.

But according to Dr. Cunningham, an authority on economics, during the last century and a half or so the world had outlived that old doctrine. It had come to see that there was no such thing as the just price of commodities. The price of things depended on supply and demand, and was fixed proximately by the higgling of the market or the competition between sellers and buyers. The sellers tried to get as much as they could for their goods, and the buyers tried to get them as cheaply as they could. That was business. It was all a matter governed by the laws of political economy, with which justice and morality had nothing to do. In this, of course, political economy was wrong. All man's actions are subject to the moral law of justice. We may indeed abstract from the moral aspects of buying and selling for the purposes of discussion, but the process is dangerous, as the instance before us shows. If political economists abstract from the law of justice, many dealers will make it an excuse for disregarding the law of justice in their transactions. It is notorious that this was done. Moralists might point out, as they did, that the higgling of the market, if buyers and sellers were honest and just, implied that there was a common standard of fairness and reasonableness by which to judge of the correct price of articles. Both buyers and sellers, if they were competent, had that standard in mind when they began to bargain. The higgling took place in order to adjust the precise sum of money which was an equivalent for the value of the article in the particular circumstances of the sale. But there were too many business people who turned a deaf ear to the moralists, and excused their profiteering with the plea that business is business.

If the Profiteering Act succeeds in forcing dealers to pay attention to the rules of justice as well as to the maxims of business, it will render a great service to the cause of morality as well as to the pockets of the consumers.

In his book on " Political Economy," C. Devas asserted that a jury of honest men could without difficulty settle what the fair price of an article should be. Section 2 of the Profiteering Act empowers the Board of Trade to set up such juries under the name of " local committees."

SOME progress has of late been made in the direction of moralizing wages. A still wider and more important question is the moralizing of prices. The practice of too many traders in all ages has always been to neglect ethical rules in business and get as much as they could for their wares. It is a peculiarity of recent times to deny that business is subject to ethical rules. We may take Mr. Joseph, Fellow and Tutor at Oxford, as an exponent of these modern economic views. In a recent book he tells us that economic value is a matter of economics, not of ethics. A bargain is settled on terms agreed on between buyer and seller. The buyer wants a commodity, the seller wants money. The buyer is prepared to give money for the commodity in proportion to the urgency of his want of it. One buyer wants the commodity more, another buyer wants it less, and the want of the same buyer varies at different times. A buyer who experiences a keener want is ready to give more money for what will satisfy his want. This is neither right nor wrong, it is neither just nor unjust, it is simply inevitable. It has no more to do with ethics and morality than the failure of the monsoon in India. A price is not unjust where no rule that it infringes can be produced. And in the absence of definite agreements and enactments we can produce no rule of universal application to which prices ought to conform.

That is the contention. Is it true? Mr. Joseph applies it to the wages of labour as well as to the price of commodities. We restrict ourselves here to the latter question.

It is certainly a question of economics. Economics are concerned with the production, distribution, and consumption of commodities. But it is also a question of morals, for the production, distribution, and consumption of commodities are human actions, and all human actions are subject to the moral law. It is possible to produce, distribute, and consume commodities, rightly or wrongly, and the moral law prescribes that those actions should be done rightly. Whether you eat or drink or whatever else you do, do all to the glory of God, says St Paul, and he is merely teaching a precept of natural ethics. All deliberate human action must be conformed to the supreme rule of all moral action; it must be conformed to the end of human existence and of human life.

But is there any definite rule of morality which tells us when buying and selling are conformed or not to the end of all human action? St Thomas and Catholic theologians answer this question in the affirmative, and their arguments show that they rest their conclusion on the law of right reason and nature. They use the arguments of Aristotle, Cicero, and other non-christian writers, and they confirm them by the teaching of Holy Scripture. I will try to state the Catholic doctrine as concisely as I can. A society is necessary in order that exchange of commodities may take place. Robinson Crusoe in his solitude had to satisfy his wants as far as he could by his own labour. He had to make his own clothes, obtain his own food, build his own hut. But when a number of families are grouped together the advantages derived from division of labour become apparent. One man takes to making clothes, another becomes the carpenter, another the smith, another an agriculturist, and so on. Money is soon invented and commerce arises. The different members of the society produce commodities not only for their own consumption, but for others. By exchanging their productions for those of others or by buying and selling they can satisfy their various wants. They produce with a view to this. They know beforehand what they can get for a garment, or a knife, or a measure of milk. The value of every commodity which is bought and sold is put on it by the community. What the fair and reasonable price of all that is bought and sold may be is matter of common estimation and common knowledge. This is a fact of experience and it is not limited to primitive village communities. It is valid for the complicated circumstances of modern English commercial life.

According to the Sale of Goods Act, 1893, if the price of what has been sold is not otherwise determined, the buyer must pay a reasonable price, obviously implying that it is not difficult to determine what a reasonable price is. The same was clearly implied by the Profiteering Act of 1919. Society, then, makes the buying and selling of commodities possible; moreover, it is the social estimate which gives commodities their exchange-value, and the social estimate is the measure of that exchange-value. The course of reasoning, indicated above, by which Mr. Joseph, like other modern economists, strives to settle the question of exchange-value, is beside the mark. It discusses the matter as if it concerned individual buyers and sellers, and comes to the conclusion that price is subjective and individualistic, whereas it is social in its origin, and depends on a social estimate for its very existence and measure. Every commodity, then, that is commonly bought and sold has a more or less definite exchange-value or price, and this is given to it, is put upon it by the common estimate in the place, time, and other circumstances of the sale.

Now, justice demands that everyone should have what belongs to him or its equivalent. And so in the contract of buying and selling justice requires that after the contract the parties should have the same exchange-values as they had before. Both, indeed, gain in usefulness from the contract. If a man buys a spade for ten shillings he does so because the spade will be of more use to him than the money. He gains, therefore, in use-value, but if he has not paid an unjust price for the spade he has the same exchange-value as before. This distinction is made by Aristotle, and it is fundamental in the whole question. It is lost sight of by Mr. Joseph and by other modern economists in their discussion of this question. The price, then, of commodities is not something arbitrary, subjective, and individualistic. It is fixed within certain limits, objective because social and not individualistic. Buying and selling, therefore, though a matter of economics, is also a matter of ethics, it is subject to the law of justice. St Thomas teaches that it is also subject to the law of charity. The law of charity to our neighbour is summed up in the maxim—Do to others as you would be done by. The rule was well known to the ethical writers of antiquity, and it is enunciated in the Old and New Testament. It is a fundamental rule of natural morality. Nobody likes, as a general rule, to give more for a commodity than it is worth. Do, then, as you would be done by, and do not sell a commodity for more than it is worth according to the common estimate.

There is, then, a fair, reasonable, and just price for things which are commonly bought and sold. Justice and charity are violated by demanding more or giving less than the just price. We should all be better, happier, and more contented if this moral rule were more strictly observed than it is in modern business relations.