Kent says it is only one mode of binding, the bargain, and giving the buyer a right to the goods on payment; 2 Corn. 495; it is a token or pledge passing between the parties by way of evidence or ratification of the sale. . . . It is mentioned in the statute of frauds, and in the French code, as an effi dent act; but it has fallen into very general disuse in modern times, and seems rather to be suited to the manners of simple and unlettered ages, before the introduction of writing, than to the more precise and accu rate habits of dealing at the present day. It was omitted in the New York Revised Statutes; id. (14th ed.) 495, n. (b). That it has fallen into disuse is true as to the giving of earnest in its ancient, strict, and techni cal sense, and its having fallen into disuse has been attributed the tendency to treat earnest and part payment as meaning the same thing, though the language of the stat ute of frauds implies that the former is something to bind the bargain while no part payment can be made until the contract has been closed ; Benj. Sales § 189.
One definition is : "Specifically, in law, a part of the price of goods or service bar gained for, which is paid at the time of the bargain to evidence the fact that the negoti ation has ended in an actual contract. Hence it is said to bind the bargain." Cent. Diet. And another is: "Something given by a buyer to a seller by way of token or pledge to bind the bargain; a part or portion of goods delivered into the possession of the buyer at the time of the sale as a pledge or security for the complete fulfilment of the contract ; a handsel." Encyc. Diet. And the latter authority illustrates the function of earnest as evidence of the conclusion of the contract by the Scotch law which holds a party who resiles, to fulfil the contract as well as to forfeit the earnest paid.
It is sometimes said that the question whether the earnest shall count as part of the price or wage depends on the intention of the parties, which, in the absence of di rect evidence, will be inferred from the pro portion which it bears to the whole sum. Int. Cyc. "If a shilling be given in the pur chase of a ship or of a box of diamonds, it is presumed to be given merely in evidence of the bargain, or, in the common way of speaking, is dead earnest; but if the sum be more considerable it is reckoned up in the price." Ersk. Inst. b. iii. tit. iii. § 5.
Another writer considers "that the origi nal view of earnest in England was, that it was a payment of a small portion of the price or wage, in token of the conclusion of the contract ; and as this view seems to have been adhered to, the sum, however small, would probably then be counted as a part payment." Sto. Sales 216.
It has been a mooted question whether at common law either earnest or delivery was necessary to perfect a sale of chattels; in a case where it was objected that because there was neither, there could not be a re covery for the breach of a parol contract of sale, it was said : Earnest paid is not neces sary to complete a parol contract of sale ; when made, it only prevents the vendor, un der any circumstances, from rescinding the contract without the assent of the vendee ; and this by common law, and not by any statute ; Hurlburt v. Simpson, 25 N. C. 236.
It has been much discussed whether the giving of earnest has any effect to pass the title to the property sold ; and in earlier cases of the sale of specific chattels it was so held; Shep. Touchst. 224; 5 Term 409; 7
East 558; Noy, Max. 87-89 ; 2 Bla. Corn. 147; but see the analysis of these authorities; Benj. Sales § 355. It is said by this learned writer on the subject, that there is no case in which this has been held when a complet ed bargain, if in writing, would not have altered the property ; id. § 357; and it is con cluded that the true legal effect of earnest is simply to afford conclusive evidence of a bargain actually completed with the mutual intention that it should be binding on both ; and whether the property has passed in such cases is to be tested, not by the fact that earnest was given, but by the true nature of the contract concluded by the giving of earn est ; id. Hence with respect to the remedy of the seller, if the buyer refuse to take the property sold, the law of earnest, properly speaking, is not concerned; but it is to be treated as in the case of contracts otherwise legally evidenced. See 2 Kent, Com. Lacey's ed. 496, note 51 ; SALES.
To constitute earnest to bind the bargain something must be paid or given. An in stance is reported where, the buyer having drawn a shilling across the palm of the seller and returned it to his own pocket, according to a custom alleged to exist in the north of England, it was held that the statute was not satisfied ; 7 Taunt. 597. This has been said to be the only reported case; Benj. Sales § 191; but it has been held that money left in the hands of a third person as a forfei ture is not sufficient ; Howe v. Hayward, 108 Mass. 54, 11 Am. Rep. 306; much less a de posit of a check ; Jennings v. Dunham, 60 Mo. App. 635 ; Noakes v. Morey, 30 Ind. 103. The three cases last cited are usually refer red to in connection with the subject of earnest. In the Massachusetts case, the question was as to the recovery of money de posited as a forfeiture, which it was argued was earnest to bind the bargain in case of a refusal to take the goods, and the court said that earnest, as used in the statute of frauds, was part payment. On the strength of this case a text-writer on the law of that state adopts the statement as a definition of earn est; Usher, Sales Per. Drop. § 113. So an authoritative writer on the statute of frauds uses the terms, earnest and part payment, as interchangeable, and discusses the ques tion of when earnest must be paid mainly, upon New York cases, although in that state the exception is confined to part payment, the "giving something in earnest" being omitted; Reed, Stat. Fr. § 226. While, there fore, the clear and philosophical definitions of the nature and effect of earnest cited from Benjamin on Sales unquestionably com mend themselves as better satisfying the ap parent purpose of the statute to designate two distinct acts, It must be admitted that they are constantly referred to by American courts and writers as alternative expressions of the same thing. Consequently the cases cited in text-books as laying down rules asi to earnest are usually found, on examination, I to be 'in fact cases of part payment, and they must be so read. This use of the words, interchangeably, makes unavoidable a refer ence to the cases just referred to, especially since the word earnest, in addition to what has been indicated as its real signification, has, in this country, certainly, an acquired meaning too general to be disregarded.