event, there is not necessarily a wager, e. g., the contract for the sale of next year's crop of a particular orchard (y). The test is whether each party under the contract may either win or losewhether each will win or lose being dependent on the future uncertain event; and also whether the contract is mutually, i. e., on both sides, a wagering contract (z). The acquisition of which depends upon a contingency.-This sub-section, like the last, is subject to the law with regard to wagering contracts preserved by s. 61 (2) (3). S. 5 (1). S. 5 (2). “The civilians held that an expectation dependent on a chance Venditio spei. might be sold. . . . The rule itself is correct in principle, and might be exemplified by supposing a sale by a pearl fisherman of any pearls that might be found in oysters already taken by him, and which had thus become his property. Such a contract would not be a bargain and sale at common law, but would be a valid executory contract, binding the buyer to pay the price, even if no pearls were found; for, as was said by Chief Baron Richards, in Hitchcock v. Giddings (a), "If a man will make a purchase of a chance, he must abide by the consequences ” (b). In the above case the contingency, on which the acquisition of the goods by the seller was dependent, was the finding of the pearls in the oysters. or 66 on The sale of a chance, as defined above, must be distinguished Goods sold "to arrive" from other cases (which also illustrate this sub-section) where goods are sold "to arrive" or on arrival." In the latter class arrival.” of cases, the presumed intention is not that the buyer shall take the risk, but primâ facie that the contract shall be void as against both parties if the contingency does not happen. The rules applicable to such cases may be thus summarized. They are set out more at length by Mr. Benjamin (c) :— A contract for the sale of goods to arrive, or on arrival, by a particular vessel by a certain time, or otherwise, does not, in the absence of a contrary intention (d), import a warranty on the part of the seller that the goods shall so arrive: but the contract is deemed to be dependent upon the double contingency (e) of the arrival, in the ordinary course of navigation, within the time (y) Per Bramwell, L.J., in Borrowman v. Free (1879), 4 Q. B. D. at p. 692. (2) Per Hawkins, J., in Carlill v. Carbolic Smoke Ball Co., [1892] 2 Q. B. 484. (a) (1817), 4 Price, 135. (b) Benj. p. 87. See also per Lord Campbell, in Hanks v. Palling (c) pp. 565, 566, where the cases (d) Hale v. Rawson (1858), 4 C. B. N. S. 85. (e) Johnson v. Macdonald (1842), 9 M. & W. 600, S. 5 (2). S. 5 (3). limited therefor, if any, of the vessel with the goods contracted for (f) on board. And the contingency of the arrival of the goods is probably fulfilled by the arrival of the goods contracted for, though not consigned to the seller, nor under his control (g); and is not fulfilled by the arrival of similar goods (not being the ones contracted for) consigned to third persons (h). This on the ground that (in the former case) the seller may buy the goods from the third person; and also that the seller should have guarded against such an impossibility in fact. In a contract for the sale of goods to arrive, a stipulation that the seller shall declare the name of the vessel is a condition precedent to the liability of the buyer (i). ILLUSTRATIONS. 1. A. agrees to sell B. all the oil on board the T. on arrival, delivery not to exceed a certain date. The T. arrives with the oil later. A. is not liable for non-delivery of the oil, nor would B. be bound to accept it. Alewyn v. Prior (1826), R. & M. 406. 2. A. agrees to sell B. the cargo of 400 tons, per the M., of Aracan Necrensie rice, provided the same were shipped on his account. The M. arrives with another description of rice. A. is not liable for nondelivery, as the particular description of rice contracted for did not arrive. Vernede v. Weber (1856), 1 H. & N. 311 (k). 3. A. agrees to sell to B. fifty cases of East India tallow, to be paid for fourteen days after landing, on the safe arrival of the C., then alleged to be on her passage. The C. arrives without any tallow. A. is liable to B. for non-delivery, as the contract was made contingent only on the arrival of the ship, the provision for payment only fixing the time if the goods arrived. Hale v. Rawson (1858), 4 C. B. N. S. 85. The seller purports to effect a present sale of future goods.-"In relation to things not yet in existence, or not yet belonging to the seller, the law considers them as divided into two classes, one of which may be sold, while the other can only be the subject of an agreement to sell, of an executory contract. Things not yet existing which may be sold are those which are said to have a potential existence; that is, things which are the natural product or expected increase of something already belonging to the seller. A man may sell the crop of hay to be grown on his field, the wool to be clipped from his sheep at a future time . . . and (f) And of the quality contracted for: Vernede v. Weber (1856), 1 H. & N. 311; Simond v. Braddon (1857), 2 C. B. N. S. 324. 69. (g) Fischel v. Scott (1854), 15 C. B. (h) Gorissen v. Perrin (1857), 2 C. B. N. S. 681. (i) Reuter v. Sala (1879), 4 C. P. D. 239; Graves v. Legg (1854), 9 Ex. 709. (k) Cf. with this case Simond v. Braddon, supra, where a warranty was intended; and in America, Dike v. Reitlinger, 23 Hun. 241. the sale is valid. But he can only make a valid agreement to sell, Mr. Benjamin goes on to show that the agreement will become a valid sale if the seller, after the goods come into existence, does some act giving effect to the transaction, or if the buyer take possession under a licence, that is to say, interveniente novo actu, some new act or conveyance to give life and vigour to the declaration precedent " (m). 66 The law previously to this Act may therefore be summed up as follows: (1.) Goods in potential existence may be presently assigned or sold (n). (2.) Other future goods cannot be presently assigned or sold at law; but in equity an assignment for value of such goods will pass an equitable interest in them when they come into existence, if they can then be sufficiently identified (o). (3.) The property in goods in (1) above, passes when the goods "are extant " (n), i. e., in existence. (4.) The property in the goods in (2) passes at law when the seller does some act of appropriation, or the buyer takes possession under a licence (p). Under sub-s. 3, a present sale of future goods is said to operate as an agreement to sell only, and no distinction is made between one class of future goods and another. But when would such an agreement become a sale; that is, what is the time that is to elapse, or the conditions that are to be fulfilled, subject to which the property is to pass? Under ss. 1 and 55, the parties may of course make any conditions they please. With regard to future goods not having potential existence, there seems no reason why the rules previously applicable should not continue to apply (being preserved by s. 61 (2)); and the property would pass by the "novus actus interveniens" of the seller, or the (1) Benj. pp. 82, 83. See Lunn v. Thornton (1845), 1 C. B. 379, and other cases in Benj. ibid. (m) Bacon's Max. reg. 14. (n) Grantham v. Hawley (1603), Hob. 132, followed in Petch v. Tutin (1846), 15 M. & W. 110; Bac. Ab. Grant D. (3). (0) Tailby v. Official Receiver (1888), 13 Ap. Ca. 523; Joseph v. Lyons (1885), 15 Q. B. D. 280. (p) Lunn v. Thornton (1845), 1 C. B. 379. S. 5 (3). S. 5 (3). Goods which have ceased to exist. S. 6. buyer's taking possession under a licence as already pointed out, and the equitable be thus turned into a legal title (q). It seems doubtful how far the character of goods as having a potential existence would now be recognized on the question of the transfer of the property. If it is, the property would pass as soon as the goods are "extant " (r), the contract until then being an "agreement to sell" under this sub-section. 6. Where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void. "Perish" is Specific goods are defined in sect. 62 (1). not defined in the Act, but it is apprehended that the goods would perish, not only if they were physically destroyed, but also had ceased to exist in a commercial sense, i.e., with their identity destroyed (s). "As there can be no sale without a thing transferred to the purchaser in consideration of the price received, it follows that if at the time of the contract the thing has ceased to exist, the sale is void. These cases are sometimes treated in the decisions as dependent on an implied warranty by the vendor of the existence of the thing sold: sometimes on the want of consideration for the purchaser's agreement to pay the price. Another, and perhaps the true ground, is rather that there has been no contract at all, for the assent of the parties, being founded on a mutual mistake of fact, was really no assent; there was no subject-matter for a contract, and the contract was therefore never completed" (†). In cases under this section "it is not so much the impossibility of performance that is regarded as the original nonexistence of the state of things assumed by the contracting parties as the basis of their contract. The main thing is to ascertain, not whether the agreement can be performed, but what was in the true intention and contemplation of the parties" (u). Cases where the goods sold perish after the contract are dealt with in the following section. (9) Per Brett, M.R., in Hallas v. Robinson (1885), 15 Q. B. D. at p. 291. (r) Grantham v. Hawley (1603), Hob. 132. (s) See per Parke, B., in Barr v. Gibson (1838), 3 M. & W. at p. 400. (u) Poll. on C. (5th ed.) p. 399. ILLUSTRATION. A. agrees to sell to B. a specific cargo of goods then supposed to be on its way from Bombay. At the date of the contract the cargo, unknown to both parties, had heated, and had been sold by the master. The contract is void. Couturier v. Hastie, (1856) 5 H. L. C. 673. S. 6. but after 7. Where there is an agreement to sell specific Goods perishing goods, and subsequently the goods, without any fault before sale on the part of the seller or buyer, perish before the agreement risk passes to the buyer, the agreement is thereby avoided. Cases under this section fall under the principle that from the nature of the case the parties must be presumed to have contemplated the continued existence of a specific thing. When that thing perishes the contract of sale is avoided by virtue of an implied condition subsequent excusing performance. Had the goods not been specific, the ordinary principle of law would apply, i.e., that impossibility of performance would not have excused. It will be seen from the judgment in Howell v. Coupland (v), that goods are sufficiently specific if they are the produce of specific land, though not in existence at the date of the contract. It is apprehended that the definition of "specific goods" in sect. 62 (1), does not modify the law on this point. "Where, from the nature of the contract, it appears that the parties from the beginning must have known that it could not be fulfilled, unless, when the time for the fulfilment of the contract arrived, some particular specified thing continued to exist, so that when entering into the contract they must have contemplated such continued existence as the foundation of what was to be done; then, in the absence of any express or implied warranty that the thing shall exist, the contract is not to be considered a positive contract, but subject to the implied condition that the parties shall be excused in case, before breach, performance becomes impossible from the perishing of the thing without the default of the contractor" (w). "No doubt there is a distinction in the present case [i.e., as compared with that mentioned in s. 6], that the potatoes, the things contracted for, were not in existence at the time the contract was entered into. But can that make any real difference in principle? Supposing the potatoes had been full grown (v) (1876), 1 Q. B. D. 258. (w) Per Cur. in Taylor v. Caldwell (1863), 3 B. & S. 826. to sell. S. 7. |