Story Case

Mr. Percy Hammond made his usual trip to Chicago to purchase a supply of spring clothing for retail in his store in Newton, Illinois. He went to the wholesale department of Leiber and Sons' Clothing Company. There he selected one hundred men's suits, and gave his check to Mr. Leiber for $1,500, payment in full. Mr. Hammond was in a hurry about the suits, and arranged to call for them in half an hour. When he returned in about forty minutes, he found the house closed to customers, and was told that Leiber and Sons had gone into bankruptcy. He demanded the suits, on the ground that they were his before Leiber and Sons became bankrupt. Mr. Leiber's assignee in bankruptcy insisted that the goods were not yet packed or delivered, and hence were still the property of Leiber and Sons when the doors were closed. Mr. Hammond sued to recover the clothing. Can he recover?

Ruling Court Case. Abraham Vs. Karger, Volume 76 Northwestern Reporter, Page 330

Karger owned certain merchandise. He placed them in charge of one, Birg, to sell for him. Clara Abraham, who was conducting a merchandise business in the same city, decided to purchase the goods owned by Karger. Her father, as her agent, negotiated with Birg with a view of purchasing the merchandise in question. An agreement was reached, a large part of the purchase money paid by Clara Abraham, but the goods still remained in the possession of Birg. A disagreement, subsequently, arose and Karger refused to permit Birg to deliver the merchandise to Clara Abraham. She then brought this action to recover possession.

Karger contended that she was not entitled to possession because no title to the goods had passed.

Per Curiam: "There can be no doubt but that, under the circumstances stated, the title, and the right to possession as well, passed to Clara Abraham, and, if afterwards, they were wrongfully detained, she might maintain replevin for them. When the terms of a sale are agreed upon, and the bargain is struck, and everything the seller has to do with the goods is complete, the contract of sale becomes absolute, as between the parties without payment or delivery, and the property and risk of accident to the goods vest in the buyer." Judgment was given for Clara Abraham.

Ruling Law. Story Case Answer

When goods, which are to be sold, are specified, and are in a deliverable condition, it is presumed that title will pass at once; and this rule applies, even though payment therefor has been postponed, and even though possession of the subject matter of the sale remains with the seller.

The point, in the Story Case, turns upon the question of title and the right to the immediate possession of the clothing. Since Mr. Hammond had chosen the goods, and paid for them, they were "specified." The transaction was closed, Leiber and Sons had but to lay out the suits for Mr. Hammond. The clothing belonged to him.