SALES: THE CONTRACT 1. Definition.—A sale is a contract by which one party gives a thing to the other for a price in money, which the latter puts himself under obligation to pay. Benjamin defines sale as a transfer of the absolute or general property in a thing for a price in money.
That there may be a valid sale there must be: (a) Parties competent to contract.
(b) Mutual assent.
(c) A thing, the absolute or general property in which is transferred from the seller to the buyer.
(d) A price in money paid or promised.
The difference between the absolute and general property in the thing sold may be explained in a few words. In the theory of the law, there may be in a sense two owners of a thing, one of whom has the gen eral and the other a special property in it. The transfer of the special property is not a sale of the thing.' Thus a factor in New Orleans bought a cargo of corn, with his own money, on the order of a London correspondent. He shipped the goods for account of his correspondent, wrote letters of ad vice to that effect, sent invoices to the correspond ent, and drew bills of exchange on him for the price; but he took bills of lading to his own order, and in dorsed and delivered them to a banker, to whom he sold the bills of exchange. This transaction was held to be a transfer of the general property to the London merchant, and therefore a sale to him; and a transfer of a special property to the banker by the delivery to him of the bills of lading, which represented the goods.' Benjamin gives as a further illustration the case where goods are delivered in pawn or pledge; the general property remains in the possession of the pawnor (which he may transfer to a third person, subject to the rights of the pawnee), and a special property is transferred to the pawnee.
2. Distinguishing features.—A sale must be dis tinguished from a contract or promise to sell. If A sells a certain horse outright to B, of course there is a binding contract of sale; but if A merely promises to sell a certain horse to B, no sale has taken place, and the title to the horse is not vested in B—the title remains in A. B's right is demand that the sale be made absolute. Hence an agreement to
sell becomes a sale, when the time elapses or the con ditions are fulfilled, subject to which the property in the goods is to be transferred. The price must be in money, which is either paid or promised. If goods be merely exchanged between the parties, there is no sale, but a barter. If a man does a piece of work and he receives in consideration thereof certain goods, there has been a transfer of the general and absolute prop erty in the goods, but no sale has taken place. So also if a person transfers certain goods or things to another, and receives no consideration in return, there has been a gift and not a sale. There may be a transfer of the possession of property, but not of the ownership, in which case there is a bailment.
3. Parties to a contract of sale.—The general rule is that the parties to a sale must be competent to con tract, and to transfer and acquire property. Only the owner of the thing or his authorized representa tive can give a title, and thus transfer the ownership ; otherwise the buyer gets no better title than the seller. Thus if A buys a watch from B which B has stolen or found, A may pay the full value and be in good faith, but he cannot claim that he is the owner as against the true owner who seeks to recover; nor could A make a valid sale of the watch to some other person.
The rule apparently does not apply to money which is stolen. If it is paid over by the thief to other parties who have given value in good faith, they cannot be compelled to repay it; nor would the rule apply to ne gotiable instruments which are payable to bearer or indorsed in blank, if the person who has signed them has been guilty of negligence which has rendered the wrongful appropriation more easy. But where a blank acceptance was stolen from the desk of the signer and filled up, it was held that he was not liable to a holder in due course, that is, to a person who took the bill for value before maturity, and without any knowledge of the facts. The signer was not guilty of negligence, and had not intended that his signature should befused without his knowledge and without de livery of the instrument by him.