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While the foregoing may be an explanation of the difference in the rules there is no clear evidence in the decisions that it is, and the English cases certainly are not consistent in treating the Statute as designed primarily to prevent perjury. Probably the best that can be said of any rule as to what constitutes a contract of sale within the meaning of the Statute is that “This rule may not be logical—very likely it is not, as an original proposition; but that it is the rule established by the authorities there can be no doubt."925
-Massachusetts Rule.--The Massachusetts courts have taken a position often called “the Massachusetts rule," between the extremes of the English rule and that of New York. They follow the New York rule to the extent of holding that the primary purpose of the agreement is what makes it a contract of sale, or otherwise, and, therefore, that not all contracts are within the Statute merely because they contemplate ultimately a change of ownership of a chattel. On the other hand, Massachusetts does not go so far as New York in requiring that the chattel sold be in existence at the time of the contract. Even if the seller has contracted to manufacture the chattel, it will be a contract of sale within the Statute if it is a chattel that the seller would normally have made for the general market. Thus in Gardner v. Joy26 the defendant had contracted to make and deliver to the plaintiff 100 boxes of candles at an agreed price. The defendant was to make the candles subsequently to the agreement. It does not positively appear that he was in the candle manufacturing business, but apparently the candles were such as were normally made for general market. The court held it to be a contract of sale.27 So, also, in Lamb
25—Evans V. Winona Lumber Co., 30 Minn. 515.
26–9 Metc. (Mass.) 177.
27-Compare, as to the difference in the New York rule, Par
sons v. Loucks, 48 N. Y. 17, where a contract by a manufacturer of paper to make and deliver a certain amount of book-paper was held a contract for work and labor because the subject matter was not in existence at the time of the contract.
v. Crafts, 28 a contract by a tallow manufacturer to make and deliver a quantity of refined tallow prepared from the raw material was held a contract of sale, the court saying, “Where a person stipulates for a future sale of articles which he is habitually making and which, at the time, are not made, or finished, it is essentially a contract of sale, and not a contract of labor; otherwise when the article is made pursuant to the agreement.29
But, on the other hand, if the article contracted for is not an article that would normally have been made for the general market, the contract is not one of sale, even though it intends the transfer of title to the article. Thus in Mixer v. Howarth30 the plaintiff was a manufacturer of buggies. At the time of the contract he had on hand the nearly finished body of a buggy. He contracted with the defendant to finish this body and to line it with cloth selected by the defendant. In addition to the fact that it was to be lined according to the defendant's desires, there was some evidence that the plaintiff would not have completed it at all that year except for the defendant's order. This was held to be a contract for work and labor and not a contract for sale.
This decision is not entirely reconcilable in spirit with the rule just quoted as laid down by the same judge, Chief Justice Shaw, in Lamb v. Crafts31 a few years later. A buggy would seem to be a thing habitually made by a buggy-manufacturer, unless the difference is in the mere agreement to line it with the kind of cloth the buyer wanted. The fact is that the Massachusetts rule, while even more definite than the New York rule both in statement and in the consistency with which courts follow a definite idea, has, like the others, a border line of cases where the application is uncertain. As the court itself expresses the matter, “It is true that in 'the infinitely various shades of different contracts' there is some practical difficulty in disposing of the questions that arise under that (17th) section of the Statute. But we see no ground for holding that there is any uncertainty in the rule itself.1982
28—12 Metc. (Mass.) 353.
29—Compare with Gerli v. Metzger & Co., 99 N. Y. S. 858, 51 Misc. 46, where a contract to furnish
“tussah"-a wound and twisted
30—21 Pick (Mass.) 205.
-Rule of Other States. The rest of the states follow, though with an occasional inconsistency, one or another of these three rules. In some states one or the other rule has been declared effective by Statute.
Exchanges.---The distinction between a "sale" and an “exchange", which has been so clearly made by the courts in regard to statutes prohibiting the “sale” of intoxicating liquor33, is not recognized in connection with the Statute of Frauds. A contract to pass the title to chattels is a contract of sale, within the meaning of the latter statute, regardless of whether the consideration is reckoned in terms of money or not.34
32-Goddard V. Binney, 115 Mass. 450. Accord, that a contract to manufacture a chattel not such as the maker would naturally man. ufacture for general trade is not a contract of sale, Smalley v. Hamblin, 170 Mass. 380.
33—Ante, p. 3.
34–In Gorman v. Brossard, 120 Mich. 611, the contract was to deliver curb stone in consideration of the cancellation of a debt. This might well have been held to be such a consideration as would make the agreement one of sale, but the court treated it as a con. tract of barter and exchange and quoted with approval from Browne on the Statute of Frauds, "con
tracts of barter are regarded, so far as the statute of frauds is concerned, as contracts of sale.” Citing Dowling V. McKenney, 124 Mass. 478; Kuhus v. Gates, 96 Ind. 66, and Rutan v. Hinchman, 30 N. J. L. 255.
Bennett v. Hull, 10 Johns. (N. Y.) 364, apples in exchange for liquors; Franklin v. Matoa Gold Mining Co., 158 Fed. 941, 16 L. R. A. (n. s.) 381, contract to trans. fer shares of stock in return for services.
Contra, Spinney V. Hill, 81 Minn. 316, contract to transfer shares of stock in return for sery. ices.
Other Contracts.-Contracts which do not contemplate the transfer of title between the parties thereto are not contracts of sale within the Statute, even though they relate to and their subject matter involves a contract of sale between one of the parties with some one else. Thus a contract whereby two persons agree to cooperate in selling the property of one of them to a third person is not itself a contract of sale.85 Likewise, a contract whereby one person authorizes another to buy goods for him, as his agent, is a contract of agency and not a contract of sale.36
Mortgages of personal property, although in a certain legal usage they are said to pass the title to the mortgagee, seem to be held not to be contracts of sale within the meaning of the Statute.
A contract as part of a contract of sale, to “rescind” the sale, or to take back title in case the buyer becomes dissatisfied, is not itself a contract of sale.88
35—Bogigian 7. Harsanoff, 186 Ma88. 380.
36—Wiger v. Carr, Wis., 11 L. R. A. (n. 8.) 650; Kutz v. Flersher, 67 Cal. 93; Hatch v. McBrien, 83 Mich. 159; Frank v. Murray, 7 Mont. 4; Stover v. Flack, 41 Barb. (N. Y.) 162.
The fact that part of the contract relates to something else than a sale does not prevent the contract from coming within the Statute, Atwater V. Hough, 29 Conn. 508, 79 Am. Dec. 229; Pitkin v. Noyes, 48 N. H. 294.
37–Mower v. McCarthy, 79 Vt. 142, 7 L. R. A. (n. s.) 418, an oral mortgage was held effective, but the Statute was not referred to; Bogigian v. Hassanoff, 186 Mass. 380, 71 N. E. 789.
38—Schaefer v. Strieder, 203 Mass. 467; Hilliard v. Weeks, 173 Mass. 304; Hankwitz v. Barrett,
143 Wis. 639; Trenholm v. Kloep. per, 88 Neb. 236.
The real reason why such a con. tract is not covered by the Statute is not altogether clear. The authorities just cited indicate that it is considered as not being a contract of sale. Other decisions, however, indicate that it might, as a whole, be a contract of sale pri. marily within the Statute, but that it has been taken out of the Statute through the buyer's receipt and acceptance of the goods. Gurwell v. Morris, 2 Cal. Ap. 451, 83 Pac. 578; Armstrong v. Orlen, 220 Mass. 112; Freemont Carriage Co. v. Thomsen, 65 Neb. 370.
This latter idea is strengthened by the fact that a contract to take back goods sold, standing as an entirety by itself, may be a con. tract of sale. Karrer v. Madden, 152 Wis. 646.
Subject Matter. If it has been determined that a contract is a contract of sale, within the meaning of the Statute, the question then arises whether it is a contract for sale of the particular things specified in the Statute. The original Statute covered sales of “goods, wares or merchandises." This is also the language of many of
" the state statutes. Other statutes read, “goods, chattels, or things in action." Still others include "personal property."
-Incorporeal Property. - Under the expression “goods, wares, or merchandise," there has been considerable question as to whether anything but corporeal property is included. Stock certificates, promissory notes, and similar evidenciary documents of debts or rights in action, are themselves tangible things. But it has generally been held that transactions relating to such things, although in words they purport to deal with the certificate, or the note, etc., really relate to the "right" represented by the
‘ corporeal certificate, note, etc., and therefore are essentially contracts for the transfer, or whatever it may be, of the intangible right. Consequently it is in relation to contracts for the sale of shares of stock, promissory notes, etc., that the question, whether such incorporeal things are goods, wares or merchandises, has chiefly been before the courts.*
In England the rule is that such things are not goods, wares or merchandises. 39
In the United States, however, some statutes, as noted, specifically include "things in action," or "personal
39—Duncuff v. Albrecht, 12 Sim. In Knight v. Barker, 16 M. & W. 189; Bradley v. Holdsworth, 2 M. 66, a contract for sale of stock was & W. 422; Tempest v. Kilner, 3 held not exempt from the stamp C. B. 249; Bowlby v. Bell, 3 C. B. tax as were contracts for sale of 284; Watson v. Spratley, 10 Ex. goods, wares and merchandise. 222; Humble v. Mitchell, 11 E. & E. 205.
*See Uniform Sales Act, Section 4, 76 "Goods".