within a certain time. Our treatment of the law of Sales will take us into all this subject matter.

The term "sales," it will thus be seen, is used in two ways: first, in a general way, to cover both the executory transaction wherein title does not yet pass and the executed transaction wherein it does, and also in a more limited way, to distinguish the latter transaction from the former. It will hereafter be used in both senses, as the context will indicate.

The term "conditional sale" is correctly used to describe two situations. The first is that situation in which one transfers the ownership of goods to another upon a provision that the ownership shall come back and revest in him if he, the seller, does something within a certain time, or providing the buyer does something or fails to do something within a certain time.

The usual transaction, however, which this term is used to describe, is the familiar one in which one transfers the possession of goods to another but provides that title shall not vest in the other until the purchase price is paid or some other act done. The title is retained for purposes of security. Selling goods on the installment plan and providing that the title shall remain in the seller until the last installment is paid is a familiar example.

Sec. 2.

SALES DISTINGUISHED FROM BARTERS OR EXCHANGES. A barter or exchange consists in a transfer of goods, or a promise to transfer goods, by one person to another in consideration of a like act or promise on the part of the other.

There is little value in distinguishing, for our purposes, between barter and sale except to indi

cate the nature of the consideration. Technically, a sale is for a price, that is to say, for money or a promise to pay money while a barter is an exchange of chattels. Where the term "sale" is used in a broad sense it includes barter. Thus in a Massachusetts case a saloon keeper was indicted for unlawfully selling liquor. He had in fact bartered it for gain. But the Court sustained a charge against him for selling liquor contrary to law.2

Sec. 3. SALES

DISTINGUISHED FROM GIFTS. A gift is a transaction wherein one person for no consideration, that is, gratuitously, transfers to another ownership in property.

There is a fundamental distinction between a gift and a sale. One is a purely gratuitous act, whereas the other is contractual in nature, imposing obligations enforceable in the courts. A promise to make a gift is unenforceable; if broken there is no remedy. If the gift is made, the giver parts with whatever title he had and no more. In fact, if he have creditors hindered or delayed from the collection of their claims by such gift, such creditors may have it set aside as a transfer which is fraudulent as to them. But a sale may in many cases give a better title than the seller himself had. That subject is discussed more at length hereafter. And even an insolvent debtor may sell his goods to a purchaser in good faith (subject, of course, to the lien of such mortgages, judgments, etc., as may be of record and in force).

2. Commonwealth v. Clark, 14 Gray (Mass.) 367, and see Mechem on Sales, Secs. 13 to 18.

a

Sec. 4. SALES DISTINGUISHED FROM BAILMENTS. Whether a transaction which involves change in possession of goods effects a transition of ownership and therefore constitutes a sale, or does not effect such transition and therefore constitutes a bailment, depends, as between the parties, upon their intention, as determined by the usual rules for the construction of contracts.

In the majority of cases there is little difficulty in determining whether one who holds goods holds them as bailee for the owner or as purchaser from him. Yet the question may arise where an owner gives possession of his goods to another and it is disputed whether he simply gave the possession and not the title, or whether it was meant that ownership should also pass; as where A who is a wholesaler of typewriters places 100 of his machines with B, a retailer, and it is disputed whether he has sold to B on credit or retained title; or, where one delivers leather to another to be made into shoes, and it is a question whether the same leather must be made into the shoes or whether other leather might be chosen. A bailment exists whenever one comes into the possession of goods that belong to another. A sale involves a transfer of ownership; a bailment involves the separation of the ownership from the possession. Where one parts with the possession of goods which he owns under an agreement that those same goods, either in the same or altered form, are to be returned, or disposed of according to his order already given or to be given, the transaction is a bailment. If the agreement does not contemplate such return, but contemplates that the recipient of the goods either must or may return some equivalent for them, the transaction is a sale

or barter and not a bailment. Thus if A delivers to B a quantity of leather which B is to manufacture into shoes for A this is a bailment. But if B is to pay a monetary value for such leather, or if he is to return shoes made out of other leather, or if he has the privilege of returning shoes made out of other leather the transaction is a sale or barter and not a bailment. In the event of loss of the leather or damage to it by fire or other casualty without B's fault, the damage must in the first case fall upon A, because it is his property which is destroyed or damaged, and he cannot call for the delivery of any shoes; in the other cases the damage would be upon B, because it is his property which is lost or damaged, and B must still live up to his agreement, or pay damages for its breach.

And so where one sends goods to another on consignment to be sold or disposed of for the benefit of the sender, title does not pass and the recipient is not owner, but bailee. Thus if A, a wholesale manufacturer of wagons, sends 50 of these to B for him to sell upon commission, returning all unsold wagons, this is a bailment and B has no ownership in the wagons; he sells them as A's agent. B is a bailee and not a purchaser.3

We have stated that in order to constitute a bailment the party receiving the goods must be obliged to return those same goods, either in the same or an altered form; still we have an apparent exception in the case of those goods which are described as fungible. Fungible goods are those goods which are composed of indistinguishable

3. In re Columbus Buggy Co., 142 Fed. Reporter, 159; Mechem on Sales, Sec. 43.

parts or units, so that the distinction of one part from the others is a matter of no moment and no unit or part has, or in the nature of the case can have, any value over another. If such goods are delivered to a bailee under an agreement that he may mix them in a bin, tank or warehouse with goods of like quality and return a similar quantity to the depositor, the transaction is accounted a bailment, upon the theory that it is practically an agreement to return the same goods. Such goods include grains, flour, oil, etc., but not logs, chairs, etc., which may be alike as a matter of fact but are not necessarily so.

Thus A puts grain in B's public granary, understanding that B will store the grain in bins that contain grain of like character. B is a bailee and not the owner of such grain. If ten parties have deposited wheat with him which he has put in the same bin, it is his duty to keep that quantity on hand to satisfy the demand of the depositors.1

4. Yockey v. Smith, 181 Illinois Reports, 464; Mechem on Sales, Sec. 25 ff.

(A bailment, as the text states, exists whenever the owner of goods is entitled to their return, either in the same or altered form. Bailments have been classified into three sorts: those for benefit of bailee, as where goods are borrowed; those for benefit of bailor, as a gratuitous keeping; those for the benefit of both, which is the usual bailment. Bailments are also classified into exceptional bailments, as those of common carriers, innkeepers, etc., where the bailee is an insurer, or practically so, of the safety of the goods; and ordinary bailments, in which the bailee is chargeable only with a fair degree of care.)