Story Case

Alex Johnson, a fruit grower, entered into an oral agreement with Martin Boynton, whereby Johnson agreed to sell and Boynton agreed to buy, for the sum of $2,000, the 1914 crop of pears which should grow in Johnson's ten-acre orchard, To secure the agreement, Boynton made a deposit of $100. Boynton, subsequently, refused to complete the transaction and Johnson was forced to sell at a loss. Johnson sues Boynton for the difference between the price which he received and the price which Boynton agreed to pay. Boynton contends that, although he made a payment in earnest to bind the agreement, this was not sufficient to take the case out of the Statute of Frauds, since fruit growing on trees is not goods, wares or merchandise. Is Boynton's contention correct?

Ruling Court Case. Tisdale Vs. Harris, Volume 20, Pickering Reports, Massachusetts, Page 9

James Harris, the owner of stock in the Collins Manufacturing Company, contracted to sell 200 shares to Samuel Tisdale, at $10.80 per share. Soon after the contract was agreed upon, the corporation made a declaration of dividends. The amount due upon the 200 shares by way of dividends was $300. Tisdale brings this suit to recover the $300. Harris contended that the contract of sale was unenforcible, because it was not in writing, as required by the Statute of Frauds. The following section was relied upon by Harris in support of his contention:

"No contract for the sale of goods, wares, or merchandise for the price of $33 or more shall be allowed to be good, except the purchaser shall accept part of the goods so sold, and actually receive the same or give something in earnest to bind the bargain, or in part payment, or that some note or memorandum in writing of the said bargain, be made and signed by the parties to be changed by such contract, or their agent, thereunto lawfully authorized."

By Tisdale it was contended that shares of stock were not goods, wares, or merchandise, and so not within the statute.

Mr. Chief Justice Shaw said: "There is nothing in the nature of stocks or shares in companies, which in reason or sound policy should exempt contracts, in respect to them, from those reasonable restrictions, designed by the statute to prevent frauds in the sale of other commodities. On the contrary, since these companies have become so numerous, so large an amount of the property of the company is now invested in them, and since the ordinary indicia of property, arising from delivery and possession, cannot take place, there seems to be peculiar reasons for extending the provision of this statute to them." Judgment was given for Harris, since the transaction was not in writing, yet within the statute.

Ruling Law. Story Case Answer

The ordinary Statute of Frauds provides that no contract for the sale of "goods, wares, and merchandise" shall be good, unless made in a certain specified manner. The first question to be determined is what constitutes "goods, wares, and merchandise." One might expect that the statute would apply only to tangible personal property. But the meaning of these words has been extended to cover the sale of almost all kinds of personal property, whether tangible or intangible; thus, the sale of stock in a corporation, bills and notes, and other choses in action are regarded as goods, wares, and merchandise within the meaning of the statute.

So also the courts have generally extended the meaning of the words "goods, wares, and merchandise" to include crops of fruit. The fruit may be sold when in an intangible form, or in other words, when potentially in existence, without a written contract, if some other evidence of the sale is given, as required by the Statute of Frauds. Generally, it is not difficult to determine what is personal property within the meaning of the words, "goods, wares, and merchandise," but the cases of bills and notes, fruit, ice, sold while on the land before being cut, trees, etc., raise some cause for uncertainty. Bills and notes, however, as has been stated above, stocks, and other choses in action, and crops of fruit, are personal property within the meaning of the statute. In the case of ice there is a variation in the view of different jurisdictions. Some courts consider it part of the real estate, others consider it personal property within the meaning of the statute. Trees, when sold standing in the ground, are usually considered as part of the real estate, but the intention of the parties may alter this. In doubtful cases, the parties should ascertain the attitude of the particular jurisdiction in which the transaction takes place.

In the Story Case, judgment would be given for Johnson, since his deposit of $100 made the contract good under the statute.