into the market and buy them." 1 The case of Bryan v. Sect. 5. Lewis (1826) upon which he founds, and also the earlier case of Lorymer v. Smith3 (1822), were judgments of Lord Tenterden (Abbot, C. J.), who thought such a transaction a wager and therefore illegal. In the later case of Hibblewhite v. M'Morine 5 (1839) the cases referred to were clearly overruled." But though "future goods" may form the subject of an agreement to sell they cannot be made the subject of a sale so as to pass the property.7 In this respect, therefore, the section is merely declaratory of the common law of England. GOODS WHICH HAVE 6. Where there is a contract for the sale of specific Sect. 6. goods, (a) and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void. (d) NOTES. (a) "Specific goods." Defined Sect. 62 (1). The section does not apply to goods described generically. Genus nunquam perit. (b) "Without the knowledge of the seller." See Coм. infra, p. 32. (c) "Perished." Altered in committee from "ceased to exist.” The latter phrase is the one usually employed in the decisions, e.g. in Couturier v. Hastie 8 (1856). (d) "At the time when the contract is made." Sect. 7 deals with the case of goods perishing after the contract, but before the risk passes to the buyer. 1 Bell on Sale, p. 16. Bell's work on Sale was written in 1843, but he appears not to have noticed Hibblewhite v. M'Morine decided four years earlier. 2 Ry. and Moo. 386. 3 1 B. & C. 1. 4 The strong opinion Lord Tenterden expressed appears to have been gradually formed in his mind, and was no doubt confirmed by the effects of the unfortunate mercantile speculations throughout the country about that time."-Per Parke, B., on Hibblewhite v. M‘Morine (1839), 5 M. & W. 452 55 M. & W. 452. at p. 462. Bell himself throws doubt upon Bryan v. Lewis.-Bell's Prin., Sect. 128, note. 7 Lunn v. Thornton (1845), 3 C.B. 379, where a contrary argument was negatived by the Court. See also Langton v. Higgins (1859), 28 L.J. Ex. 252; Moakes v. Nicholson (1865), 19 C.B. N. S. 290; Benjamin on Sale, p. 361. 8 7 H.L. Cas. 673. Sect. 6. Couturier v. Knowledge of parties. Partial loss. (e) "Void." The word corresponds to the Scottish "null ab initio." See NOTE (a), Sect. 23 post, p. 114. COMMENTARY. This section is founded on Couturier v. Hastie1 (1856), where a sale of corn at sea was contracted in London, but it was afterwards found that the cargo, having got heated, had been sold at a foreign port before the date of the contract. A court of seven judges, and afterwards the House of Lords, unanimously found the London contract void, holding, in the words of Lord Chancellor Cranworth, that "what the parties contemplated was an existing something to be sold and bought." The case further shows that it is not essential to the application of the rule that the goods perish physically, if they cease to answer the description in the contract. The corn continued to be called by that name, but it was no longer the specific cargo intended by the parties. Knowledge on the part of the seller that the goods he professes to sell have perished will very properly subject him to a claim for damages. The contract in that case is not void in the sense of freeing both parties. The section, however, does not refer to the buyer's knowledge, or state what the effect would be in the having only partially perished. was that in the case of partial the seller did not, the sale was good, and the buyer was obliged to pay the full price, while in the event of total loss the sale was altogether void.3 There seems no room here for a similar distinction. event of the subject of sale The rule of the Roman law loss, if the buyer knew and When the goods sold have partially perished the only question seems to be, whether the subject of sale continues to answer the description in the contract. If not, it ceases to be the specific article sold. Pothier thought that in 17 H.L. Cas. 673. 2 Digest, 18. 1. 57. 3 Ibid. 18. 1. 15. pr. But see Mackintosh's Roman Law of Sale, p. 106, where it is suggested that the rule as to partial loss extended to total loss. 4 This may be deduced from the converse proposition that if the thing sold continues to answer the description, the sale is good. In Barr v. Gibson (1838), 3 M. & W. 390, a ship sold while at sea had, previous to the contract, and unknown to the parties, been stranded. It was held that the of performance. every case of partial destruction the buyer should have the Sect. 6. option of either abandoning the sale, or of claiming the part preserved at a reduced price,' but this suggestion, though adopted in France and embodied in the French Code, forms no part of the law of England 3 or Scotland. Impossibility of performance is probably the true basis upon which the Impossibility avoidance of the contract proceeds, but impossibility is not removed by a part remaining possible, nor can fulfilment of a part of a contract be said to be the fulfilment of the contract itself. If performance is impossible, the fact should operate in favour of an innocent seller as well as in favour of a buyer; both parties should be bound or neither. A difficulty may be suggested where specific goods, Partial desubject to two or more contracts of sale, are found to have been partially destroyed. If, for instance, the seller has more con subject of sale was still extant as a ship, though it might be a total loss in the sense of an insurance policy. In certain circumstances the buyer may be bound to communicate to the seller the benefit of an insurance effected by him-Gillespie v. Miller, Son, and Co. (1874), 1 Ret. 423. 1 Contract de Vente, No. 4. 2 Art. 1601. 3 Chalmers on Sale of Goods Act, p. 17. + So far as sale is concerned, no very direct authority either in England or Scotland can be cited for the non-application of the French rule, though an analogy may be found in the law as to leases-Pollock on Contract, 6th ed. p. 393; Stair, i. 15. 2 and 3; Ersk. ii. 6. 41; Bell's Prin. Sect. 1208. In England Barr v. Gibson (1838), 3 M. & W. 390, is sometimes cited as authority, but is not directly in point. Perhaps Geipel v. Smith (1872), L.R. 7 Q.B. 404, is a better illustration. While it related to an excepted risk in maritime law, the principle seems of general application. It was held that where the principal part of a contract becomes impossible by an excepted risk, the parties (i.e. both parties) are discharged from performing any other part which remains possible. (See Pollock on Contract, 6th ed. pp. 404, 408.) The leading American text-writers are, however, inclined to adopt the French rule as applicable both to England and Scotland. Kent, referring to Pothier and the Code Napoleon, says: "I presume the principles contained in the English and American cases tend to the same conclusion, provided the inducement to the purchase be thereby materially affected" (Com. ii. 469). Story says: "If the thing sold be only partially destroyed at the time of the sale, the buyer may either abandon the contract or he may take the thing at a proportional reduction of the price, according to the terms of the original bargain" (Sale, Sect. 184). Two English decisions are cited as authority by both authors, but neither supports the law as stated. Curtis v. Hannay (1800), 3 Esp. 82, merely illustrates the well-recognised English rule as to warranty set forth in Sect. 11 of this Act, while Farrer v. Nightingal (1798), 2 Esp. 639, if it has any relation to this subject, is adverse to the proposition set forth. Story further states that the law of Scotland is the same as that of the Code Napoleon, and cites M. P. Brown on Sale, Sect. 134, but Brown merely sets forth the Roman law, -adding in a note that "the rule now adopted in France seems conformable to equity." D struction where two or tracts. Sect. 6. Sect. 7. GOODS PERISH ING BEFORE SALE BUT AFTER AGREE MENT TO SELL. 100 boxes of raisins in a particular warehouse, 50 of which he sells to A and 50 to B without definite apportionment, if it turns out that 40 out of the 100 have perished, is the seller free from both contracts or either of them? Analogy points to both contracts being void, though each separately is capable of fulfilment. The further question, however, arises, whether, in the case supposed, the goods are really specific so as to come within this section. goods, 7. Where there is an agreement to sell() specific and subsequently the goods, without any on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is thereby avoided. (b) "Specific goods," i.e. "goods identified and agreed upon at the time a contract of sale is made." Sect. 62 (1). (c) "Fault" means wrongful act or default. Sect. 62 (1). (d) "Before the risk passes the buyer." Compare Sect. 1 (4) with Sect. 20, and see Sect. 18, Rules 2 and 3. (e) "Avoided," i.e. becomes or is made void. The Scottish term "reduced" is analogous, but it implies a formal decree of a Court. See NOTE (a), Sect. 23 post, p. 114. COMMENTARY. The rule here, as in the previous section, applies only to specific goods. In Sect. 6 the goods were the subject of a "sale" under which, had they not previously perished, both property and risk would have passed to the purchaser; here, the goods, though specific, are subject only to an "agreement to sell," under which the risk has not passed. The section will apply to the cases specified in Sect. 18, Rules 2 and 3, and also to any case where the parties have agreed to alter the prima facie rule by postponing the passing of the risk. It will be observed that, although the word "sale" is inadvertently used in the rubric, it is not the sale but the Sect. 7. The leading case upon which the rule of this section is founded is that of Howell v. Coupland (1874), where the subject of sale was 200 tons of a special class of potatoes, grown on particular lands. The potatoes having afterwards suffered from blight, so that the seller was only able to deliver 80 tons, he was held to be under no obligation as to the remainder. This judgment was founded on Taylor v. Caldwell (1863), where an important general principle was laid down in these words: "In contracts in which the performance depends on the continued existence of a given. person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance." 5 The Price. 8.-(1.) The price (a) in a contract of sale may be Sect. 8. ASCERTAIN fixed by the contract, or may be left to be fixed in MENT OF PRICE. manner thereby agreed, or may be determined by the course of dealing between the parties. (2.) Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case. 1 Sect. 1 (3). 3 L.R. 9 Q. B. 462, 1 Q.B. Div. 258. 2 Sect. 20. 4 3 B. & S. 826. 53 B. & S. at p. 839.-Per Blackburn, J. As to the effect of the subject of sale having only partially perished, see Com., Sect. 6, ante, p. 32. |