Court Opinion

ID: 4497445
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:15:25.957095+00
Date Added: 2024-06-11T15:04:05.046337
License: Public Domain

Phillips,
concurring: It is a basic principle of the law of sales that, regardless of the purported intention of the parties, no title can pass unless the subject of the sale is ascertained. In Kimberly v. Patchin, 19 N. Y. 330, it is said:
It is a rule asserted in many legal authorities, but which, may be quite as fitly called a rule of reason and logic as of law, that in order to an executed sale, so as to transfer a title from one party to another, the thing sold must be ascertained.
The Uniform Sales Act, enacted into law in several States and asserted to be a codification of the common law as expressed in the decisions of the majority of the state courts, provides:
Section 17.- — -Where there is a contract to sell unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained, but property in an undivided share of ascertained goods may be transferred as provided in section 6.
Section 6. — * * * In the case of fungible goods, there may be a sale of an undivided share of a specific mass, though the seller purports to sell and the buyer to buy a definite number, weight or measure of the goods in the mass, * * *. (Italics mine.)
In 35 Cyc. 293-295, it is said:
Where the sale is of a part of a specific mass the constituents of which are identical in kind, quality, or value, selection is of course unnecessary, * * *. The general rule and that which seems to be supported by the weight of authority is that even when the constituents of the mass are of the same kind, quality, and value, the property in any portion thereof will not pass by a contract of sale unless the portion has been identified by separation. On the other hand there is a line of well considered cases in which the intention of the parties is regarded as the controlling factor, and the rule is laid down that, although the goods sold have not been separated from the mass, the property therein will pass if such was the intention of the parties, * * *.
*581The contract of sale may relate to goods of a particular description hut not part of a specific mass, * * *. Under such contracts the property in the goods does not pass to the buyer until there has been appropriation of specific goods to the contract. (Italics mine.)
In Hatch v. Oil Co., 100 U. S. 124, the Supreme Court said:
Sales of goods not specified stand upon a different footing, the general rule being that no property in such goods passes until delivery, because until then the very goods sold are not ascertained.
Granting the most liberal interpretation possible to the so-called “elevator cases,” which hold that title to fungible goods may. pass without separation from the mass of which they are a part, nevertheless, it seems necessary that to constitute a sale there must be some specification or identification of the particular mass of which the goods sold are a part; otherwise, we have merely a sale of goods by description which may be performed by delivery from any source of the goods described.
An examination of the findings of fact leads me to the conclusion that in the instant appeal we have a sale of goods by description, which sale could be performed by delivery from any source, and that the contract, so far as the findings show, did not relate to any specified mass from which the subject of the sale was to be taken. Certainly the contract does not itself refer to any specified goods or mass of such goods. It appears that, at the time of the sale, the seller did have at hand sufficient goods to perform the contract, but so far as the purchasers are concerned there is no showing that they were aware of this fact or contracted with reference thereto or with reference to such goods. Possibly, if the parties had argued that the sugar sold was part of the stock owned by the seller, wherever situated, this might be a sufficient sale of a fro rata portion of all such sugar, but upon this point we are not called upon to express our opinion, since there is no showing that the contract was made by the parties with reference to such ownership. Apparently the purchasers did not know or care whether they were purchasing a part of any sugar then in the possession of the seller or sugar thereafter to be acquired by it.
The legal effects which follow a sale by description are different from those where identified goods are sold. For example, where a description is the means provided for identifying the goods which are the subject of the contract, if the goods are not like the description no title passes though the parties purported to make an executed sale. On the other hand, if the parties purport to make an executed sale and the goods are identified as being those to which the contract related, title would pass even though the goods do not meet the description. In the present instance, what would the situation have been if it had developed that the sugar owned by the *582seller at the time the contract was made did not meet the description in the contract? I can not believe that the courts would say the the contract had reference to the sugar owned by the taxpayer and that title passed because of that fact. Rather am I inclined to believe that they would hold that the contract referred to sugar by description, that it had no reference to what was in the hands of the seller, and that the seller was bound to deliver, not a portion of his stock on hand, but sugar of the grade required by the contract.
There has been no citation of any authority tending to show that title can pass to goods which are not either specific or part of a specified mass. On the contrary, in each case cited the mass from which the goods were to be taken was specified. In Kimberly v. Patchin, supra, 6,000 bushels of wheat were sold from two piles containing a greater quantity. In that case the court said:
Where the quantity and the general mass from which it is to he taken are specified,, the subject of the contract is thus ascertained, and it becomes a possible result for the title to pass, if the sale is complete in all its other circumstances. (Italics mine.)
But in the instant case the general mass from which it is to be taken is not specified.
In Mackellar v. Pillsbury, 48 Minn. 396; 51 N. W. 222, the court thus states the case:
Cottrell had then on hand in his warehouse between 13,000 and 15,000 Brazilian barrels, and * * * he executed to plaintiff a bill of sale of 12.384 of these barrels. (Italics mine.)
In Gourd v. Healy, 206 N. Y. 423; 99 N. E. 1099, the goods sold were identified as part of a larger quantity in the cellars of Schroeder & Schyler, Bordeaux.
In Pope v. Allis, 115 U. S. 363, the Supreme Court said:
When the subject-matter of a sale is not in existence, or not ascertained at the time of the contract, an undertaking that it shall, when existing or ascertained, possess certain qualities, is not a mere warranty, but a condition, the performance of which is precedent to any obligation upon the vendee under the contract; because the existence of those qualities being part of the description of the thing sold becomes essential to its identity, * * *.
In American Hide & Leather Co. v. Chalkley & Co., 101 Va. 458; 44 S. E. 105, the question was whether title to certain hides had passed so that the plaintiff could maintain an action for the sales price or must sue for damages for breach of the contract. The court said:
The contracts were for the sale of non-specific hides, being agreements merely to sell hides of a particular description. But the specific hides upon which the contracts were to operate had not been agreed upon, and the rule in such case is that the property in the goods does not pass until an appropriation of the specific goods has been made, with the assent of both seller and buyer.
*583It did not appear in that case whether at the time of the sale the seller had on hand sufficient hides to fill the contract, nor does the court inquire. Whether the hides -were on hand makes no difference, for the contract was with reference to hides of a certain description and not hides of a certain ownership, and so in the instant case.
In the instant case it does not appear where the contracts were consummated or where the goods were located which it is claimed were sold. Under these circumstances, we might be justified in applying to the contracts the most unfavorable construction possible under the laws of any State, but it seems preferable to make use of those principles of the law of sales which have most general application throughout the United States. The general rule, as I conceive it, is laid down in Kimberly v. Patchin, supra, and in Anderson v. Read, 106 N. Y. 333; 13 N. E. 292, where the same court says:
The other fact is that there is in the contract no specification, identification or description of the particular property sold. It was simply 1,000 tons of superphosphates. Where the goods were is in no way designated or intimated. They might have been in Europe, Now York, Georgia, or (as was the truth), not in esse, and still every word of the contract have full significance. How is it possible to say that the title to any particular superphosphate passed to the vendee when there is no description or identification of it to be found in the contract, or any reference to it therein made? Suppose the vendors had had 1,000 tons of the goods in their factory in New York, and that after the signing of the contract, a fire had totally destroyed the factory and its contents, who would have had to sustain the loss of such goods? Is there the least ground for claiming that the vendees must suffer it? Make the same supposition, but place the goods at Atlanta, and the same question arises and the same answer must be given. As is said by Comstock, J., in Kimberly v. Patchin, (19 N. Y. 330, at 333) : “It is not only legally but logically impossible to hold property in such things unless they are ascertained and distinguished from all other things, and this, I apprehend, is the foundation of the rule that, on a sale of chattels, in order to pass the title, the articles must, if not delivered, be designated, so that possession can be taken by the purchaser without any further act on the part of the seller.” This was said in a case where the question arose as to the transfer of title to a quantity of grain, a part of a larger quantity in a warehouse, which was designated and identified, and this court held the title passed on the execution of the contract. But when a quantity of oil was sold out of a stock consisting of different large quantities in different cisterns, and at» various warehouses, and the note of sale did not express the quality or kind of oil sold, or the cistern or warehouse from which it was to be taken, and the purchaser did not even know where the particular oil lay which was to satisfy the contract, the court held the title did not pass (White, Assignee v. Wilks, 5 Taunt. 176), and that case is cited with approval in Kimberly v. Patchin (supra).
In Davis v. Budd, 60 Iowa, 144; 14 N. W. 211, where the contract involved the sale of corn of a certain description, the court said:
The question presented is as to whether the corn which the defendant had on hand to the amount of one thousand six hundred bushels, the amount *584called for by the contract, was held from May 20 to July 20 at the plaintiff’s risk, so far as damage from heating was concerned. In considering this question we shall assume, as the evidence tends to show, that there was no lack of care on the part of the defendant. But conceding that he bestowed proper care, we have to say that we think that the risk was not on the plaintiff. The contract is executory. No sale of corn took place. The defendant seems to think otherwise. His defense must be regarded as based upon the theory that, though the contract does not call for a specific lot of corn, nor part of a specific mass, the fact that he had a mass of corn on hand of over one thousand six hundred bushels, the amount called for, and of the requisite quality, and offered to make a delivery of one thousand six hundred bushels from the mass, had the effect to transfer to the plaintiff the title to that amount, and to impose upon him all risk of damage to such corn from heating.
Whether, if the contract had called for a part of a specific mass, the title to such part could under the circumstances be deemed to have passed, we need not determine. As tending to show that the title could not be deemed to have passed, see Scudder v. Worster et al., 11 Cush., 573. As tending to show that it might, see Chapman v. Shepard, 39 Conn., 413, and Waldron v. Chase, 37 Maine, 414. Whatever the true rule may be upon this question, it seems to be conceded that title to part of a mass does not pass before severance, unless the contract relates specifically to such mass.
In the case at bar the contract called merely for corn of a specific quality, and could be performed by the delivery of any corn whatever of such quality.
Unless we are to read into the findings of fact something which is not there, and say, because the seller had on hand a sufficient quantity of goods to perform his contract, that it necessarily follows that the contract related to those goods which were on hand, regardless of the knowledge or intention of the buyers, we must hold that there was no sale of any specified goods, or part of any specified mass of s'uch goods, and that no title passed.
On the facts stated it is impossible to distinguish the contracts of sale here involved from those occurring daily where goods are sold for future delivery, the contracts being entered into without regard to the source from which the goods are to come or to the ownership or lack of ownership of such goods by the person who. “ sells.”
I am satisfied, however, that the taxpayer has established an accounting practice which was consistent and reflected its income. Where such is the case, legal theories should not be applied to a point where, in such a case as we have here, it becomes necessary for the taxpayer to determine at his peril when legal title passes under each contract into which he may have entered. The refinements of the law must sometimes give way to practical considerations, and this I conceive to be the intent of section 212 (b) of the Act.
The instant case impresses me as proper for the application of the section, and I therefore concur in the result which has been reached.