that it does

of "earnest," could be more effective in altering the property than
the payment of the entire price. It is therefore submit- Submitted
ted that the true legal effect of earnest is simply to af- not.
ford conclusive evidence that a bargain was actually completed
with mutual intention that it should be binding on both; and that
the inquiry 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 the earnest. (x)
(x) [See Groat v. Gile, 51 N. Y. 431; v. Adams, 4 Selden, 291; Jennings v.
Nesbit v. Burry, 25 Penn. St. 208; Joyce Flanagan, 5 Dana, 217.]

STANFORD LAW LIBRARY

converted

§ 358. AFTER an executory contract has been made, it may be Executory converted into a complete bargain and sale by specifying agreement the goods to which the contract is to attach, or in legal into bar- phrase, by the appropriation of specific goods to the congain and sale by tract. The sole element deficient in a perfect sale is thus subsequent appropria- supplied. The contract has been made in two successive stages, instead of being completed at one time; but it is none the less one contract, namely, a bargain and sale of goods. As was said by Holroyd J. in Rohde v. Thwaites, (a) "The selection of the goods by one party, and the adoption of that act by the other, converts that which before was a mere agreement to sell into an actual sale, and the property thereby passes." (b)

tion.

(a) 6 B. & C. 388.

Claflin v.
Boston &
Lowell R.
R. Co.

(b) [In Claflin v. Boston & Low. R. R. 7 Allen, 341, the evidence showed that the plaintiffs agreed to buy a quantity of oil, not precisely determined, but within certain limits at a fixed price, to be delivered in Boston; and the owners of the oil agreed to sell it to them. The specific quantity not being settled, nor the

oil itself separated and distinguished, this did not constitute a complete sale, but only a contract to sell. But in pursuance of this contract the owners of the oil sent a quantity by railroad to Boston, consigned to themselves, a part of it being also directed to the care of A. Cushman. They notified the plaintiffs that they had sent it, and gave an order for its delivery to the order of one of them, and the plaintiffs paid for

vendor is priate the goods.

to appro

The only difficulty that can arise on this question is, in cases where
the vendor only has made the subsequent appropria- When
tion. If it has been agreed that the purchaser shall se-
lect out of the bulk belonging to the vendor, it is not easy
to raise a controversy, but the cases in which the ablest
judges have been much perplexed are those where the vendor is,
by the express or implied terms of the contract, entitled to make
the selection. A very common mode of doing business is for one
merchant to give an order to another to send him a certain quan-
tity of merchandise, as so many tons of oil, so many hogsheads of
sugar. Here it becomes the vendor's duty to appropriate the
goods to the contract. The difficulty is to determine what consti-
tutes the appropriation; to find out at what precise point the
vendor is no longer at liberty to change his intention. It is plain
that the vendor's act in simply selecting such goods as he intends
to send cannot change the property in them. He may lay them
aside in his warehouse, and change his mind afterwards; or he
may sell them to another purchaser without committing a wrong,
because they do not yet belong to the first purchaser, and the
vendor may set aside other goods for him. It is a question of law
whether the selection made by the vendor in any case is a mere
manifestation of his intention, which may be changed at his pleas-
ure, or a determination of his right conclusive on him, and no
longer revocable.

§ 358 a. [A. and B. stored grain in C.'s warehouse, and by the warehouse receipts each was entitled to get a given quantity of wheat, but not the identical wheat delivered. The Waddell v. grain of different owners was mixed in the warehouse. Macbride. A. and B. agreed to load D.'s vessel with grain, and gave proper orders to that effect to C. C. told the captain that he was shipping all of A.'s wheat first. It was held that this amounted to

it. Hoar, J. said: "There was thus an agreement of the parties that this oil should be the property of the plaintiffs; it was sent to the place at which, by the contract, it was to be delivered, and the order upon the freight-bill entitled the plaintiffs to the possession. Nothing more was to be done by the vendors. They had made the delivery which the contract required, and we can have no doubt that it completed the sale, and vested the

property in the vendees." Hyde v. La-
throp, 2 Abb. N. Y. App. Decis. 436.
See Thompson v. Conover, 3 Vroom (N.
J.), 466; Crawford v. Smith, 7 Dana,
55, 61; Gough v. Edelen, 5 Gill, 101;
Chapman v. Searle, 3 Pick, 38; Colt J.
in Merchants' National Bank v. Bangs,
102 Mass. 291, 295; Coleman v. Mc-
Dermot, 5 U. C. C. P. 303; Macpherson
v. Fredericton Boom Co. 1 Hannay (N.
B.), 337.]

an appropriation by C. and that the property in the grain so first shipped passed to A. (b1)]

Rule as to determination of election.

§ 359. The rule on the subject of election is, that when, from the nature of an agreement, an election is to be made, the party who is by the agreement to do the first act, which, from its nature, cannot be done till the election is determined, has authority to make the choice, in order that he may be able to do that first act, and when once he has done that act, the election has been irrevocably determined, but till then he may change his mind. (c) For example, suppose A. sell out of a stack of bricks one thousand to B., who is to send his cart and fetch them away. Here B. is to do the first act, and cannot do it till the election is determined. He therefore has authority to make the choice, but he may choose first one part of the stack and then another, and repeatedly change his mind, until he has done the act which determines the election, that is, until he has put them in his cart to be fetched away; when that is done his election is determined, and he cannot put back the bricks and take others from the stack. So, if the contract were that A. should load the bricks into B.'s carts, A.'s election would be determined as soon as that act was done and not before.

Point of time at which property passes.

§ 360. It follows from this, says Blackburn J., that where from the terms of an executory agreement to sell unspecified goods the vendor is to dispatch the goods, or do any thing to them that cannot be done till the goods are appropriated, he has the right to choose what the goods shall be; and the property is transferred the moment the dispatch or other act has commenced, for then an appropriation is made finally and conclusively by the authority conferred in the agree ment, and in Lord Coke's language, "the certainty, and thereby the property, begins by election." (Heyward's case, 2 Coke, 36.) (d) But however clearly the vendor may have expressed an

(b) [Waddell v. Macbride, 7 U. C. C. P. 382; Coffey v. Quebec Bank, 20 U. C. C. P. 110, 555.]

(c) Heyward's case, 2 Co. 36; Com. Dig. Election; Blackburn on Sales, 128; [Lynch v. O'Donnell, 127 Mass. 311.]

d) [In Merchants' National Bank v. Bangs, 102 Mass. 291, 295, Colt J. said: "When, from the nature of the agreement, the vendor is to make the appropriation,

When title vests where vendor is to appropriate.

then, as soon as any act is done by him identifying the property, and it is set apart with the intention unconditionally to apply it in fulfilment of the contract, the title vests, and the sale is complete. Thus the delivery of goods to the buyer, or his agent, or to a common carrier, consigned to him, whether a bill of lading is taken or not, if there is nothing in the circumstances to control the effect of the transaction, will be sufficient. If the bill of lading, or

intention to choose particular goods, and however expensive may have been his preparations for performing the agreement with those particular goods, yet until the act has actually commenced, the appropriation is not yet final, for it is not made by the authority of the other party nor binding on him. (e)

of the au

§ 361. A review of the authorities will show the subtle distinction to which this subject gives rise, and the infinite Review diversity of circumstances under which its application thorities. becomes necessary in commercial dealings. The considerations that govern it are rendered still more complex when the vendor, although appropriating the goods to the contract by dispatching them, still retains control by taking the bills of lading or other documents of title in his own name, in order to secure himself against loss in the event of the buyer's insolvency or refusal to pay. The decisions in cases where the vendor, although appropriating the goods, has reserved expressly or by implication a special property in them, will be separately examined, after disposing of those which are free from this element of controversy.

son.

§ 362. In 1803, in the case of Dutton v. Solomonson, (f) it was treated as already settled law that where a vendor de- Dutton v. livers goods to a carrier by order of the purchaser, the Solomonappropriation is determined; the delivery to the carrier is a delivery to the vendee, and the property vests immediately. And in the United States the law is established Law in the to the same effect. (g)

other written evidence of the delivery to the carrier, be taken in the name of the consignee, or be transferred to him by indorsement, the strongest proof is afforded of the intention to transfer an absolute title to the vendee." See Hatch v. Lincoln, 12 Cush. 31, 33-35. It was agreed between Ferguson and Wilson that Ferguson should make certain timber for Wilson and mark it as it was made, and that it should be delivered as fast as it was made Dunning v. to the agent of Wilson; and that when so marked and delivered it should become the property of Wilson. The timber was all made for Wilson and was marked for him; part of it was delivered, and all brought out of the woods and taken possession of by Wilson, and sold to a third party. It was held

Gordon.

Delivery

to carrier.

United
States.

that the failure of Wilson to send out an
agent to accept every part as it was made
did not prevent the passage of the title as
fast as the timber was made and marked.
Dunning v. Gordon, 4 U. C. Q. B. 399.]

(e) Blackburn on Sales, p. 128. The
accuracy of this statement of the law was
attested by Erle J. in Aldridge v. Johnson,
7 E. &. B. 885, 901; 26 L. J. Q. B. 296;
[Coffey v. Quebec Bank, 20 U. C. C. P.
110, 555.]

(f) 3 B. & P. 582, per Lord Alvanley C. J.

(g) Krulder v. Ellison, 47 N. Y. 36; [Arnold v. Prout, 51 N. H. 587, 589; Garland v. Lane, 46 Ib. 245, 248; Woolsey v. Bailey, 27 Ib. 217; Smith v. Smith, Ib. 244, 252; Putnam v. Tillotson, 13 Met. 517; Stanton v. Eager, 16 Pick.