A difficult question has arisen where labor has to be expended on the thing sold before the contract is executed, and the property transferred, as to whether the contract is for the sale of goods within the seventeenth section, or for work and labor, and therefore enforceable if to be performed within a year, so as not to be within the fourth section. The decisions on this question are not in accord.
In England it is held that the contract is for a sale of goods if it contemplates the ultimate transfer of the property in a chattel. "If the contract be such that it will result in the sale of a chattel," it was said in the leading English case, "the proper form of action, if the employer refuses to accept the article when made, would be for not accepting. But if the work and labor be bestowed in such a manner as that the result would not be anything which could properly be said to be the subject of sale, then an action for work and labor would be the proper remedy."11
The English rule has been followed to some extent in this country,12 but in most jurisdictions it has been rejected.13
In some states it is held that a contract for the sale of something which the seller ordinarily makes and sells in the course of his business is a contract for the sale of goods, and not for work and labor, though he may not have the goods on hand, but may have to manufacture them; but, if the goods are not such as he ordinarily makes, and have to be specially manufactured for the buyer, the contract is for work and labor.1* This is commonly called the Massachusetts rule and has been so generally adopted that it is sometimes referred to as the American rule.
10 Baldey v. Parker, 2 Barn. & C. 37. See "Frauds, Statute of," Dec. Dig. (Key-No.) § 85; Cent. Dig. § 141.
11 Lee v. Griffin, 1 Best & S. 272. See "Frauds, Statute of," Dec. Dig. (Key-No.) § 88; Cent. Dig. §§ 147-153.
12 Pratt v. Miller, 109 Mo. 78, 18 S. W. 965, 32 Am. St. Rep. 656; Burrell v. Highleyman, 33 Mo. App. 183. See "Frauds, Statute of," Deo. Dig. (Key-No.) § 83; Cent. Dig. §§ 147-158.
13 See cases cited post, notes 14, 15.
By the New York rule, which also prevails in a few other states, a distinction is made between goods in existence when the contract is made and goods that have to be manufactured, and it is held that when the chattel is in existence the contract should be deemed one of sale, even though it may have been ordered from a seller who is to do some work upon it to adapt it to the uses of the purchaser. Such a rule makes but a single distinction, and that is between existing and nonexisting chattels.15
In some states this question is regulated by special provisions of the statute.16