Story Case

The Federal government passed an act forbidding the sale of all injurious, nerve-affecting drugs to any person within the United States. One-eyed "Ruef" of the underworld, often in the hands of the federal agents for smuggling drugs to certain "friends," found the government secret service so annoying that he decided to consult a lawyer, also of bad repute. The advice he received was as follows: "Dear Ruef: The federal act forbids only the sale of drugs; you can live in Detroit and open one of your joints in Windsor, Ontario. (Canada does not prohibit the sale of dope.) Have your friends order from you in Windsor and make your shipments C. 0. D., "buyer 's risk." Can "Ruef" safely follow the lawyer's advice?

Ruling Court Case. United States Vs. Adams Express Company, Volume 119, Federal Reporter, Page 240

The Adams Express Company is a corporation engaged in the business of carrying goods, parcels, and merchandise over certain states. The Dallas Transportation Company is a dealer in spirituous liquors at Dallas, Illinois. The Adams Express Company, acting for the Dallas Transportation Company, delivered jugs containing liquors to various parties in Iowa. The jugs were always shipped cash on delivery. The express company would collect from the purchaser and return the money to the Dallas Transportation Company. The Adams Express Company was indicted in Iowa for selling whiskey there, without having paid license tax as required by law. It was contended by the express company that no sale was ever consummated in Iowa so that it was not within the law referred to.

Mr. McPherson, District Judge, said: "When goods are sold C. 0. D. it is presumed that title to such goods pass at the time and place of shipment, and not at the time and place of delivery. Accordingly, in this case, there was no sale in Iowa by any one. The sale was made in Illinois. The express company was merely an agent to deliver and collect." Judgment was given for the express company.

Ruling Law. Story Case Answer

When goods or merchandise are shipped cash on delivery, the question arises as to when, in such a transaction, the title passes. The general rule in this country is, that in the absence of any express intention to the contrary, title to the goods will pass at the time and place of shipping. The courts proceed upon the theory that the carrier is the mere agent of the seller to call for the goods, and the agent of the buyer to deliver them to him. However, the seller and the buyer may expressly agree that title will pass when the goods are delivered.

The lawyer's advice, in the Story Case, was worth his fee. "Ruef" could ship his drugs from Windsor, Canada, and the title would pass at the moment of shipping to the person ordering. This would, therefore, be a sale not in the United States, but in Canada, and as far as this particular statute is concerned, "Buef" would not transgress it.