In every complete sale there is a certain moment of time wherein the ownership of the goods by the seller ceases and that of the buyer begins; therein is the transfer of title. When this shall occur depends upon the intention of the parties as determined by rules of construction. But where the rights of third parties as creditors or purchasers are affected by such sale, the positive law may override and defeat such intention.
Goods which are the subject matter of a sale, must belong at each moment of time to buyer or to seller. There must occur a certain definite moment or occasion wherein it can be said that then the title or property passed, defeasibily or absolutely. The goods must be at any given moment either buyer's or seller's (assuming, of course, that no third party has title). Whether this transition takes place and at what moment, is the subject matter of this present chapter. There is, however, another viewpoint made necessary in cases which concern the rights of third persons. A person other than the seller, may, unknown to the buyer, really own the goods or he may have rights which may be so prejudiced by such sale or attempted sale, that the law permits him to defeat or ignore it in the proper proceedings. The subject of the transition or title as between the buyer and seller is discussed in the present chapter. In the following chapter the rights of third parties in respect to such transition are considered.
Title to unascertained goods cannot be transferred.
There may be a contract to sell goods which are at the time wholly unascertained, but the transfer of title cannot take place until the ascertainment.48 Thus if A undertakes to sell B a certain kind of threshing machine out of A's stock of such machines, B does not thereby own any machine until one party has, with the express or implied consent of the other party, selected or appropriated a machine to the contract. Whether title would pass at such appropriation depends on other rules. It is true, of course, that before title passes there will be a right to sue for breach of contract. But after title passes there is a right to the property in the buyer.
It is a mooted question whether title can pass, even when that is the intention, to a part of a mass of fungible goods like wheat, oil, or wine, where there has been no separation of the part from the whole. One argument is that title cannot pass, because it could not be said what part was owned by the buyer, and in case of a destruction of a part of the mass, whether it was his part or another's that had been destroyed. But it is really not necessary to determine this. For the buyer may be considered as an owner in common with the seller and in case of loss each would sustain his proportionate share and this is the better rule.49
48. McLaughlin v. Piatti, 27 Cal. 451; Ellis & Myers Lumber Co. v. Hubbard, 06 S. E. (Va.) 754.
It is every where admitted that if the goods contracted for are not fungible goods, that is, the units are not indistinguishable, title cannot pass until ascertained. Thus if 50 out of 100 logs are sold, it is important both to buyer and seller what particular logs shall be selected as each may differ from the others even though as a matter of fact they may be substantially alike and no title passes unless the sale was intended to be an undivided interest in the whole mass. But where the sale is of wheat in a warehouse, oil in a tank, etc., it ought to be possible to transfer ownership without separation if the parties so intend and that title may be so transferred is now considered the better rule and in accordance with mercantile demands, but the contrary doctrine prevails in some jurisdictions.50
Title to ascertained goods passes according to the intention of the parties.
So long as the goods are unascertained, title cannot pass. If ascertained, the time at which property in the goods shall pass depends on the question of the parties' intention. The law will not declare the buyer to be owner of the goods sooner or later than the parties intended he should become such owner. The difficulty is in discovering such mutual intention. For this purpose the law resorts to certain rules of construction. These rules are not arbitrary or final in nature, but indicate primarily, and unless it otherwise appear, the intention of the parties.
49. Kimberly v. Patchin, 19 N. Y. 330.
50. Scudder v. Worster, 11 Cush. (Mass.) 573.
These rules are framed according to circumstances as they may be, for it is from such circumstances that the intention must be inferred when the parties do not in words express their intention. In usual cases these rules would constitute the true indicia of intention; for that reason they are established as rules. But the intention of the parties to the contrary will overcome the rules.50a
Unless a different intention appears, "where there is an unconditional contract to sell specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment, or the time of delivery, or both, be postponed." 51
If at the time of contract, the goods are ascertained and are then in a deliverable shape, the presumption is that the title is then to pass, though perhaps credit is given and the goods are not yet delivered. This presumption may be overcome by contrary evidence.
Example 20. A says "I will sell you this horse for $50." B says "I will take him" and it is arranged that B shall come the next day and pay for and get the horse, the presumption is that the horse immediately becomes B's.52