When property in goods passes

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.

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.

I SUPPOSE that if the thing has already been delivered, it will perish to the buyer. See Molinam disp. 366. The reason is, because by delivery ownership has been transferred to the buyer. But a thing perishes to its owner and deteriorates, as the Doctors note, in l. Quod si ff. de periculo, et commod. rei vendit.

I ASSERT first, that if the thing has not yet been delivered, and is determinate, as this horse, this ox, etc., it perishes to the buyer. So the Doctors commonly, with Fagundez cap. 47.; for thus do the Laws dispose, and deservedly; for the right has already been acquired by the buyer, and the very sale of a determinate thing, the law of nations being regarded, is sufficient to transfer ownership to the buyer; for that it is not really transferred before delivery comes from the disposition of the civil law, which for certain reasons, to avoid lawsuits, so established; yet the civil law does not thereby wish to prevent the commodities and incommodities of the thing from belonging to the buyer.

I EXCEPT, however, first, if the thing perishes or deteriorates through the fault of the seller, for instance if through gross or light fault he does not guard the thing.

SECOND, if the seller was in default in delivering the thing sold; for then he himself is at fault, as D. Bonav. notes in speculo animae, cap. 2. ad finem. Then therefore it perishes to the seller, as is gathered from l. illud, ff. de periculo, et commodo rei vendit. and they teach, Less. l. 2. cap. 21. dub. 12. num. 96. Sylvester v. emptio, quaestione 3. Molina loc. cit. Fagundez num. 4. Bassaeus num. 23.

THIRD, if it has been so agreed in the contract; this is taken expressly from l. in venditione, ff. de per. et com. rei vend. and they teach, Molina loc. cit. Fagundez num. 6. Bassaeus loco cit.

FOURTH, when the thing is confiscated on account of the crime of the seller. Thus the authorities cited above hold.

FIFTH, if the seller in contracting said something whereby the buyer would believe the thing to be durable. Likewise if the seller knew the thing would not last, and did not warn the buyer, l. si vina, ff. de pericul. et commod. rei vend. See Molinam loc. cit. Fagundez num. 8. Bassaeum loc. cit.

I ASSERT second, that if the sale be made in genus, as the Jurists say, or if the thing sold be indeterminate, as the Theologians say — for instance, if from his flock ten sheep, from the herd two cows, without designating them — the flock or herd perishing, it perishes to the seller; Less. l. 2. cap. 21. dub. 11. num. 97. Molina loc. cit. Fagundez num. 10. cap 47. It is clear from Leg. In ratione, §. diligenter, ff. ad l. Falcidiam, and Leg. Incendium, Cod. si certum petatur.

The REASON is, because from such a purchase the buyer has acquired only the right that ten sheep be delivered to him, but no right in particular.

They commonly ADD third: when some thing to be measured is sold whole and entire, as this whole cask of wine, this whole granary of wheat, this whole cask of oil, for a certain number of regali for every measure: if they perish before they are measured, they perish to the seller; but once measured, to the buyer; Less. l. 2. cap. 21. dub. 12. num. 97. Molina loc. cit. and others with Fagundez num. 12.

However, Baldus, and Paulus de Castro ad l. 2. C. de per. et com. rei vendit. hold that such a sale is to the body, not to the measure, except when certain measures are sold by deceit or by the heap; and therefore it perishes to the buyer even before measurement. Others reject this, with Fagund. num. 12. and others there, and Bassaeo, num. 13. Yet Fagund. himself fights with himself, as I shall say, quaest. 13.