What sale is

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.

881. The contract of sale and purchase is defined: the exchange of price with merchandise, or conversely; or: an onerous contract of giving a determinate and just price for merchandise, or conversely. Thus each law, Roman and Gallican. Principles. I. From Roman Law. Sale is perfected by the consent alone of the parties, unless the parties agree concerning the making of a writing. But the dominion of the thing does not pass to the buyer unless delivery has been made. Indeed, dominion of the thing, even of a thing handed over to the buyer, is not transferred until the price is paid by the buyer, or offered, or at least either suretyship or credit concerning it is furnished. Hence before that, there belongs to the buyer only a right to the thing, but not in the thing. St. Lig., nn. 795 and 796.

II. From Gallican Law. 1. Any sale is perfected by the consent alone of the parties, without any legal formality. Therefore three things are required and suffice, namely the thing, the price, and consent. Consequently a writing is required only for proof. Hence dominion is transferred immediately and before the delivery of the thing. Nevertheless, an exception is made when the matter concerns things which are sold according to measure, or are customarily tasted; for then the sale is not perfect unless the thing has been measured or tasted. 2. When the sale exceeds the sum of 150 francs, so that it can be proved in the external forum, it requires an authentic or private writing (art. 1341).

882. Questions. QUESTION 1. Is the seller bound to disclose the defects of the thing?

I answer. A distinction must be made; for defects are: 1. substantial, or only accidental; 2. hidden, or manifest; 3. besides, either the seller is questioned concerning them, or not. Hence:

I say 1. The seller in every case is bound to disclose all substantial defects of the thing, both in itself and relative 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 held concerning the price. Thus from every law.

I say 2. The seller, when questioned, is bound to disclose all hidden defects, even if they do not render the thing harmful or useless; for otherwise he would commit fraud. Therefore if the fraud was the true cause of the purchase, the contract is rescindable. But if the fraud was only incidental, so that the buyer, the defect having been known, still would 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 in proportion to the defect. The reason is that otherwise the thing would be sold for more than it is worth.

I say 3. The seller is not bound of himself to show accidental defects of the thing which are of themselves manifest, provided he diminishes the price according to the proportion of 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 ought to impute to himself. Except, however, unless the buyer is very ignorant, because with respect to him the defect is considered hidden. Except also if the seller is specially questioned concerning such a defect. St. Lig., n. 823.

883. QUESTION 2. Is the seller held for all damages following from a defect of the thing sold?

I answer. He is not held except for foreseen damages, because he could not undertake an obligation concerning those things which he did not foresee even confusedly, as is clear from what has been said in the Treatise on Justice, n. 658.

QUESTION 3. To what is the seller bound with respect to the delivery of the thing?

I answer. 1. He must hand over the thing and its accessories to the buyer in the place and manner concerning which agreement was made in the contract; 2. he must hand over the thing at the appointed time at the appointed time; otherwise the buyer can seek rescission of the contract or indemnity ¹; 3. he is bound to hand over the thing free from another's possession and from other unusual burdens.

¹ The Author in this place sets forth the dispositions of Gallican law. For Roman law merely condemns to interest, but not to rescission of the contract.

884. • Q. 4. To what is the seller bound, if the thing perishes before or after delivery?

Resp. 1. He is bound to nothing if the thing perishes before delivery by a fortuitous event. The reason is, from Gallican law, because a thing perishes for its owner, that is, for the buyer. Thus also, unless it shall have been otherwise agreed, it must be held from Roman law, although the seller keeps the ownership of the thing until it shall have been delivered ². - St. Lig. n. 828.

² The risk of the thing belongs to the buyer from Roman law, both because every advantage of the thing also follows him, and because immediately from the perfected sale the seller begins to be debtor of the species (A. would have said, of the thing in its individuality), whom it pleased the law to free by the destruction of the thing. See Voet (Book 18, Title 6, n. 1).

Resp. 2. If the thing perishes before delivery through the fault of the seller, he is bound concerning the price and the expenses of the contract ³, because he ought to have guarded the thing as his own.

³ The seller is bound not only to those things, but also to that which is of interest. See Voet (Book 18, Title 6, n. 2). Note this same thing with respect to the following Resp. 3.

Resp. 3. 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 price received and to pay the expenses of the contract, if there are any ⁴. 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 appreciable by no price.

⁴ Here also must be recalled what we noted in the note to the preceding n. 883. Compare Voet (Book 19, Title 1, n. 21).

885. • Q. 5. What are the special obligations of the buyer, or to what is he bound by reason of the price, its interest, or expenses?

Resp. 1. He is bound to pay the price in the place, time, and manner determined in the contract; otherwise the seller can seek rescission of the contract, or, if he prefers, compel payment of the price.

Resp. 2. He is bound to pay interest for the unpaid price from the day on which he possesses the thing, if the thing is fruit-bearing, although accidentally it may have produced no fruits from the time of sale, unless the seller has given the buyer a 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 fruit-bearing, he is not bound to pay interest, unless he has been in culpable delay and it has not been otherwise agreed.

Resp. 3. He is bound to pay the expenses made for carrying away the thing sold, for writings ⁵ or authentic acts; likewise for the expenses necessary for the preservation of the thing from the day of sale, unless it shall have been otherwise agreed.

⁵ What A. says concerning expenses for writings is proper to Gallican law, but not to Roman law, which provides nothing of this kind.

886. • Q. 6. Whether the purchase of a movable thing sold to another, but not yet delivered to him, is valid ⁶?

⁶ The question here usually is not really about the validity of each sale, but which buyer is to be preferred. See Lugo (Disp. 26, Sect. XI), who most rightly set up the question in the title itself: To whom is the thing owed, which was sold, the same thing, to two buyers at an interval?

Resp. 1. Affirmatively, if the thing is delivered to the second buyer, provided this one was in good faith. Thus from every law. But then the seller is bound concerning damages, if any have been inflicted on the former owner. - St. Lig. n. 827.

Resp. 2. Negatively, if the buyer was in bad faith, or if the thing has not yet been delivered to the second buyer. The reason is clear from the very terms of the law, from which the second buyer in good faith cannot prevail over the first except by reason of possession. - St. Lig. ibid.; Civil Code 1141.

887. • Q. 7. What force do earnest monies add to a sale?

Resp. 1. If they are attached only to the promise of sale, they do not confirm the contract, but each one of the contracting parties can withdraw. But in this case, if the one who handed over the earnest monies to the other withdraws, he simply loses them; on the contrary, if the one who received them withdraws, he must restore double, that is, the earnest monies received and, besides, a value equal to them.

Resp. 2. If they are attached to the sale itself, they do not make it conditional, but are an argument that the sale has been contracted; for they are computed as part of the price, or are given as security for payment; whence none of the contracting parties can withdraw when the other is unwilling. But in doubt whether they were added to the promise of a contract or to the contract itself, the lesser must be stood by, or they are judged to have been added only to the promise of sale. From Gallican law a promise of sale is not distinguished from the sale itself.

Q. 8. Whether, and how, incorporeal rights, certain or uncertain, or litigious, can be sold?

Resp. to the 1st. Incorporeal rights, such as notes, credits, usufructs, a right to an opened inheritance, if they are certain, can be sold or transmitted to another by any other title, just like other rights. Their delivery, moreover, is made by remitting the notes or other authentic writings.

Resp. to the 2nd. Litigious rights, or rights concerning which lawsuits are moved, can likewise be sold according to the proportion of the probability of a favorable outcome. - Thus all.

888. • Q. 9. When is the seller bound concerning eviction of the thing?

Resp. 1. He is bound concerning eviction as often as the buyer is juridically disturbed from possession of the thing bought ⁷. Except unless it shall have been otherwise agreed in the contract. The reason is that the seller then cannot transfer ownership of the thing (1626).

⁷ Understand this of a buyer disturbed from possession of the thing after the judicial taking away of the thing from a preceding right, either of ownership or of pledge, on the part of the claimant.

Resp. 2. He is also bound to refund the price to the buyer when it is discovered that the thing sold certainly belongs to a third party here and now claiming it; for the reason is the same: the seller could not transfer ownership of the thing which he himself did not have. But he is not bound to this in conscience before the sentence of a judge, unless it is wholly certain to him that the thing really 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 a judge has otherwise intervened. - Recall what was said concerning eviction in the Treatise on Justice, n. 638.

740. Preliminary notes. 1. As was noted above (n. 611), contracts draw their origin from the very social nature of men; for since, given the division of labor, they produce certain things which they do not need, and besides need many things which they do not produce, exchanges of goods are made among them from this, insofar as they hand over certain goods to others and receive from them other goods of a different kind. But afterward, since it often happened that things to be exchanged were of unequal value, gradually by the usage and consent of nations a common measure of things was chosen, namely money,² by which exchanges were made easier and more frequent; but that kind of exchange which is made through money was called purchase-sale.

¹ St. Thomas, 2. 2., q. 77; Lugo, disp. XXVI; Salmant., tr. XIV, cap. II; Billuart, diss. III; St. Alphonsus, n. 793-830; Carriere, II, n. 655-765; Ball. P., n. 747-820; Berardi, n. 597-668; Lehmk., n. 1109-1123; Noldin, n. 577-596.

² Money (pecunia) etymologically draws its origin from the word pecus, because formerly it designated all wealth or riches, which in primitive times consisted chiefly in flocks; hence when coins were employed as the price of exchange, they were called pecunia, and among certain nations coins were marked with the head of a beast (pecus) (Breal and Bailly, Diction. etymologique latin, Paris, 1898, p. 254).

741. 2. Now purchase-sale is an onerous contract by which the dominion of some thing is transferred for a determined price. - Hence three things are required for the essence of this contract: (a) mutual consent of one who buys and another who sells; (b) some thing, whether movable or immovable, which is called merchandise; and thus sale is distinguished from exchange of money, in which some kind of money is exchanged for another kind of money; (c) money as the price of the payment; and thus purchase is separated from simple exchange, in which merchandise is given for merchandise.

742. 3. By natural law, the transfer of dominion is made by the consent alone of the contracting parties, namely as soon as they have expressed mutual consent concerning the merchandise and the price. But by civil law, among some nations, certain conditions are required so that the contract may be perfect; concerning these the Codes should be consulted.

In France,¹ dominion is transferred by the consent alone of the contracting parties. - Nevertheless, in certain cases, the sale is not perfect, because it is subject to some condition. Thus (a) when things are sold according to weight, number, or measure, the sale is not perfected unless they have been weighed, numbered, or measured; (b) when the matter concerns things which are customarily tasted before they are bought, such as wine and oil, the sale is not absolute until the buyer has tasted and approved them; (c) if the sale is made on trial (a l'essai), it is not judged perfect unless the thing has been tested. - In these or similar cases, as long as the sale is not perfect and absolute, the thing perishes to the seller; but as soon as the contract has been completed, the thing, even not yet handed over, perishes to the buyer.

¹ Cod. civ., art. 1583-1593, Supplem., p. 143*; Planiol, II, n. 1354-1365.

We shall speak: 1. on the just price which the seller can demand and the buyer must pay; 2. on the offices of the seller; 3. on the offices of the buyer; 4. on certain species of sale, in which special difficulties occur.

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.

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

The contract of sale and purchase can be defined as an onerous contract by which any thing whatever estimable by price is exchanged for a determinate sum of money, dominion being mutually transferred. - Cf. St. Alphonsus, n. 795. - Kenrick, n. 45. - Kent, Comment., vol. 2, part 5, lect. 39, n. 468, (4).

I say. For transferring the dominion of the thing sold, by natural law the delivery of the thing itself is not required, if the freely given consent is otherwise established. - But by positive law a distinction must be made. According to Roman law the dominion of the thing does not pass to the buyer unless delivery has already been made; indeed it is also required that the price be paid or offered by the buyer, or at least that either suretyship or credit be furnished concerning it; and if this is not done, the buyer indeed has a right to the thing, but not a right in the thing. But according to our law, if the thing sold has been designated and separated from the rest, dominion is transferred without delivery, although at least an inchoate and authentic payment of the price is required. For if a thing, even designated and separated, is sold without any payment of the price, it can be recovered by the seller while it is in transitu, as they say, to a buyer who is not solvent. Yet notwithstanding these things, among us, says Kenrick: "The risk of the thing does not ever seem to pass to the buyer unless it has in some manner been delivered. All things depend on the custom of merchants." - Cf. St. Alphonsus, nn. 795 and 796. - Kenrick, tract. 10, n. 50; and tract. 11, nn. 45 and 47. - Kent, Comment., vol. 2, part 5, lect. 39, nn. 492 and 496.

Question. Whether the seller is bound to disclose the defects of the thing?

Resp. He is certainly bound to disclose all substantial defects, both in themselves and relatively to the buyer's known end, or all those which make the thing another thing, or render it harmful or notably useless; but of itself he is not bound to show accidental and manifest defects, provided that he diminishes the price according to the proportion of 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 ought to impute to himself. I said of itself, because there must be excepted, 1st. the case of a very rude buyer, because in respect to him the defect is considered hidden, and 2nd. the case in which the seller is specially questioned concerning such a defect. But if the defect is indeed accidental but hidden, again a distinction must be made; for if the seller is questioned, he is bound to disclose it; otherwise he commits fraud and the contract will be rescindable. But if no questioning is done, the contract will be wholly firm, but the price must be diminished according to the proportion of the defect. - Cf. St. Alphonsus, n. 823.

VERY MANY definitions of these are handed down, from which is drawn the very brief definition which the S. Doctor indicates in the Speculum animae, cap. 2. Venditio est passio mercedis pro pretio, Emptio vero Passio pretii pro mercede, Caspensis uses it Tract. 19. disp. 4. and others apud Fagundez lib. 5. de contract. cap. 1. Bassaeum, verb. Emptio.

NOTE here that the name merx properly signifies only movable things that are sellable lib. 66. ff. de verb. signific. But here merces is taken for merces in the sense of price, insofar as it has the rational character of the object to be priced. It is so taken by Lessius Tom. 1. lib. 2. cap. 11. dub. 1. with the Jurists on leg. 1. ff. de contract. emptionis, et venditionis, and Molina Tom. 2. de iust. tra. 2. disp. 336. who so define it. Therefore it is taken here as signifying the payment, not the merchandise. In this Fagundez is deceived, along with Bassaeus.

It is called Passio, because it is a mutual contract, and this stands in the place of the genitive. It is called mercedis pro pretio, et pretii pro mercede, because of old, before money was invented, there were only exchanges of a horse for an ox; of wine for oil; and of wheat for cloth; but afterwards money was invented on account of the inequality of things, which at the beginning was stamped with the foot of cattle; whence also it was called pecunia, as Pliny testifies lib. 33. cap. 3. and among the Romans it was impressed with the foot of an ox. Hence that proverb of Martius: Bovem habet in lingua, that is, he has been corrupted by money. Hence also Depeculatores were called those who take away moneys by violence, theft, etc. Soon, however, on account of inequality, money was stamped with various metals, at whose price Purchases and Sales began to be made by the law of nations, although as regards the equality of price they are made by the law of nature. On these see Fabianum de monte de empt. et vendit. quaest. 1. Molinam Tom. 2. tract. 2. disp. 336. Fagundez in Prooemio ad lib. 5. de Emptione, etc.

On this (as the S. Doctor says above) perilous matter I shall treat of some things, as being necessary, although very few are found in the Seraphic Doctor.

THREE things, however, are gathered as necessary to Emptionem, et Venditionem, namely Consent, the Thing, and the Price. Concerning Consent it is clear ex Leg. omnibus, ff. de verb. oblig. Concerning the thing it is established ex lege, Nec emptio, ff. de contrahend. empt. Concerning the price it is established ex dicta lege, and the Doctors commonly teach it.

It is PROVED, because this contract is obligatory in both directions; but there is no obligation without consent.

NOTE, however, that the simple contract of Emptionis, et Venditionis entered into with the agreement of forming a written instrument is not perfect unless the writing is made; and any of the contracting parties can withdraw, because under that agreement and condition the contract was entered into, and therefore it is not held to be perfect unless purified, with the condition fulfilled. So the Doctors note on leg. 2. ff. de contract. empt. et leg. contractus, Cod. de fide instrument. et Instit. de empt. et vendit. §. 1. See Molinam tom. 2. de Iustitia, tract. 2. disp. 337. Fagundez lib. 5. cap. 2.

But if mention of the writing has been made, the contract being already perfect, the writing is not necessary. Yet one of the contracting parties can compel the other that the writing be made for the easier proof of the contract, because what does not harm himself and benefits the other, each of the contracting parties is bound to effect. Now the instrument must be paid for by the one who compels the other in this case. See Molinam above with Fagundez.

IF, however, at the beginning of the contract there was agreement about making a writing, it is doubted whether they agreed to this for the greater firmness of the writing and its easier proof; or for the validity of the contract.

COMMONLY they respond that it must be held sufficient for the validity of the contract; others, however, say the opposite.

MOST certainly those who do not have the dominion and administration of things cannot perform these, as minors, wards (pupilli), the insane, sons of a family, and others, whom the S. Doctor relates as enumerated in 4. dist. 15. part. 2. art. 2. quaest. 1. ad 4. et disp. de contractibus in genere.

LUCRATIVE trading is illicit for Clerics and Religious, cap. consequens, where suspension is introduced, dist. 88. et cap. fornicati, eodem titulo, et cap. negotiatorum, ibidem, et cap. ultimo, de vita, et honestate cleric. Clement. V. eodem titulo, et cap. 1. Ne clerici, vel monachi. So most commonly the Doctors, and in eo cap. excommunication ferendae sententiae is imposed. Similarly the leasing of lands for the sake of gain and avarice is forbidden, cap. pervenit, dist. 86. where it is permitted only for sustenance.

It is understood, however, of Clerics only in sacred orders. See Molinam Tom. 2. disp. 342.

JUDGES also, and others representing the Prince, are prohibited from buying and selling in the lands governed by themselves; see Molinam disp. 343.

GUARDIANS, however, by the common law are bound, if wishing to buy the goods of their wards, to have a decree of the judge openly, and with the contract entered into in good faith. So Gama decis. 217. It is proved by leg. si in Emptione, §. finali, verbo tutor, ff. de contrah. empt.; provided it is done openly and in good faith, for those buying secretly through a friend are presumed to act in fraud. See Molinam Tom. 1. disp. 224.

SPOUSES also can have such contracts with each other, and a son with his father concerning things that are his own. Concerning spouses it is had in text. in leg. Aurelius, §. finali, ff. de liber. legat. Concerning Father and son as regards Castrensian and quasi-Castrensian goods it is certain; for these belong entirely to the son.

The FATHER, however, cannot sell any of his goods to one son without the consent of the other sons; nor to one grandson without the consent of the other grandsons, or without the license of the King or Prince, when the latter cannot, or will not, give such consent; otherwise such contracts are void, and the purchasing son in punishment loses the price of those things, leg. 2. ff. de contrah. empt. See Molinam tract. 2. disp. 343. alias 245. And say the same of sons selling their things to their parents, by the rule of correlatives, as Fagundez notes lib. 5. cap. 15. num. 4. Rebell. de oblig. iustit. part. 2. lib. 9. quaest. finali, sect. 3. num. 17.; for the same reason holds in the ascendents.

HENCE Fagundez deduces num. 12. that a Father cannot contract a loan with his son, nor a father with the son of a prior marriage, while others exist from the second.

SIMILARLY, if a father gives a field to this son for the payment of some money which he owed, it will be invalid, because it takes the place of a sale.