PASSING OF PROPERTY IN THE GOODS
•Lecture 4
•Passing of the property in the goods
•When does the property in the goods pass (unascertained goods)
•No property can pass in unascertained goods which were not appropriated to the contract or purchaser Re London Wine Co [1986]
•In Re Stapylton Fletcher [1994] the court found that the property in the goods had been sufficiently appropriated by segregating the relevant quantity of wine from their general trading stock and placing it into separate storage.
•s 20A of the Sale of Goods Act 1979
•This section gives proprietary remedies to a buyer of goods forming part of a larger bulk (See Re Wait [1927])
•a precondition is that the goods subject to the sale are forming part of an identified bulk, and that the goods had been prepaid or partially paid for
•Cont.
•Unless otherwise agreed by the parties , property in an undivided share In the bulk is transferred to the buyer
•The buyer becomes an owner in common of the bulk s 2A(2)(b)
•The buyer becomes an owner in common, not the sole owner; A further act of physical separation will be necessary before sole ownership is transferred
•20B Deemed consent by co-owner to dealings in bulk goods
•(1) A person who has become an owner in common of a bulk by virtue of section 20A above shall be deemed to have consented to--
•(a) any delivery of goods out of the bulk to any other owner in common of the bulk, being goods which are due to him under his contract;
•(b) any dealing with or removal, delivery or disposal of goods in the bulk by any other person who is an owner in common of the bulk in so far as the goods fall within that co-owner's undivided share in the bulk at the time of the dealing, removal, delivery or disposal.
•When do goods become ascertained?
•When the act of one or both parties or someone designated by them, which will make in accordance with the agreement, the unascertained goods at the time when the contract of sale was made, ascertained.
•Goods might become ascertained without the act of either party- by exhaustion
•s 17 passing of the property
•The intention of the parties is decisive
•Intention can be ascertained in accordance with the terms of the contract, the conduct of the parties and the circumstances of the case.
•s 18: Rules for ascertaining intention
•Section 18 stipulates statutory presumptions for the ascertaining the intention of the parties
•These rules may be rebutted by an evidence to the contrary
•Rule 1
•“unconditional contract for the sale of specific goods in a deliverable state”
(1)Irrelevant for actual possession of the goods, the property passes to the buyer when the contract is made
(2)In Tarling v Baxter (1827), even where payment was to be made a month after the contract was made, the court concluded that the property passed at the time of sale, in so far as nothing remains to be done.
•Cont.
(3)Emphasis must be placed on whether there was an unconditional contract, such as the case of Denannt v Skinner [1948].
(4)the contract is unconditional if there is nothing to prevent the property from passing
(5)The implication is that the risk (unless otherwise agreed) passes to the buyer
•Cont. deliverable state
•“Goods are in a deliverable state within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them”
•Deliverable does not mean ‘packed’ or anything of that kind.
•It is undeliverable if there are things remaining to be done by the seller to the goods before it is in the state in which it is finally delivered to the buyer (Philip Head [1970])
•Rule 2
•“Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until the thing is done and the buyer has notice that it has been done”.
•Rule 3
•“the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price”
•In Turley v Bates (1863) the court said that the conditions of ‘weigh, measure…’ must remain to be done by the seller
•Rule 4
•Goods which are delivered on ‘sale or return’
•(1) property passes to the buyer if he pays the price; or
•(2)retains the goods beyond a reasonable time (Pool v Smith’s Car [1962]); or
•(3) he does an act inconsistent with his being other than the buyer (Kirkham [1897]); or
•(4)a fixed time passed signifying the passing of the property which had been agreed by the parties
•Cont.
•Obviously the parties can declare a different intention; for example the seller might limit the passing of the property to a particular event, such as on payment of the price [Weiner v Gill [1906]
•Rule 5
•Unascertained goods
•‘appropriation has to be more than ‘selecting or setting aside’ the goods for the purpose of complying with the contract
•‘appropriation is understood to mean “an act which is intended and agreed, in terms of the contract, to transfer ownership to the buyer”
•Appropriation must be unconditional it is to pass the property
•Severance of the part sold from the bulk could be said to be unconditional appropriation subject to…
•examples
•The appropriation of 20 hogshead of sugar out of a bulk, where 4 hogsheads were delivered to the buyer, was considered an actual sale (Rohde v Thwaites (1827)
•The act of filling oil of peppermint into glasses which had been supplied by the buyer, was considered an actual sale (Langton v Higgins [1859])
•examples
•Where the goods where mixed with other goods, no property can pass; in Healy v Howlett [1917]
•A problem arises where goods are to be supplied and installed or becomes a fixture; the presumption is that property does not pass until the work is completed
•The appropriating is not unconditional where the seller has not intended unconditional appropriation
•appropriation with the assent of the seller/buyer
•A mere setting apart or selection of the seller’s goods which he expects to use in performance of the contract is not enough for the purpose of Rule 5 (Carlos Federspiel [1957])
•Assent does not necessarily have to be express; Assent can be inferred or implied (Pignataro [1919])
•Passing of the property in the goods
•When does the property in the goods pass (unascertained goods)
•No property can pass in unascertained goods which were not appropriated to the contract or purchaser Re London Wine Co [1986]
•In Re Stapylton Fletcher [1994] the court found that the property in the goods had been sufficiently appropriated by segregating the relevant quantity of wine from their general trading stock and placing it into separate storage.
•s 20A of the Sale of Goods Act 1979
•This section gives proprietary remedies to a buyer of goods forming part of a larger bulk (See Re Wait [1927])
•a precondition is that the goods subject to the sale are forming part of an identified bulk, and that the goods had been prepaid or partially paid for
•Cont.
•Unless otherwise agreed by the parties , property in an undivided share In the bulk is transferred to the buyer
•The buyer becomes an owner in common of the bulk s 2A(2)(b)
•The buyer becomes an owner in common, not the sole owner; A further act of physical separation will be necessary before sole ownership is transferred
•20B Deemed consent by co-owner to dealings in bulk goods
•(1) A person who has become an owner in common of a bulk by virtue of section 20A above shall be deemed to have consented to--
•(a) any delivery of goods out of the bulk to any other owner in common of the bulk, being goods which are due to him under his contract;
•(b) any dealing with or removal, delivery or disposal of goods in the bulk by any other person who is an owner in common of the bulk in so far as the goods fall within that co-owner's undivided share in the bulk at the time of the dealing, removal, delivery or disposal.
•When do goods become ascertained?
•When the act of one or both parties or someone designated by them, which will make in accordance with the agreement, the unascertained goods at the time when the contract of sale was made, ascertained.
•Goods might become ascertained without the act of either party- by exhaustion
•s 17 passing of the property
•The intention of the parties is decisive
•Intention can be ascertained in accordance with the terms of the contract, the conduct of the parties and the circumstances of the case.
•s 18: Rules for ascertaining intention
•Section 18 stipulates statutory presumptions for the ascertaining the intention of the parties
•These rules may be rebutted by an evidence to the contrary
•Rule 1
•“unconditional contract for the sale of specific goods in a deliverable state”
(1)Irrelevant for actual possession of the goods, the property passes to the buyer when the contract is made
(2)In Tarling v Baxter (1827), even where payment was to be made a month after the contract was made, the court concluded that the property passed at the time of sale, in so far as nothing remains to be done.
•Cont.
(3)Emphasis must be placed on whether there was an unconditional contract, such as the case of Denannt v Skinner [1948].
(4)the contract is unconditional if there is nothing to prevent the property from passing
(5)The implication is that the risk (unless otherwise agreed) passes to the buyer
•Cont. deliverable state
•“Goods are in a deliverable state within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them”
•Deliverable does not mean ‘packed’ or anything of that kind.
•It is undeliverable if there are things remaining to be done by the seller to the goods before it is in the state in which it is finally delivered to the buyer (Philip Head [1970])
•Rule 2
•“Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until the thing is done and the buyer has notice that it has been done”.
•Rule 3
•“the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price”
•In Turley v Bates (1863) the court said that the conditions of ‘weigh, measure…’ must remain to be done by the seller
•Rule 4
•Goods which are delivered on ‘sale or return’
•(1) property passes to the buyer if he pays the price; or
•(2)retains the goods beyond a reasonable time (Pool v Smith’s Car [1962]); or
•(3) he does an act inconsistent with his being other than the buyer (Kirkham [1897]); or
•(4)a fixed time passed signifying the passing of the property which had been agreed by the parties
•Cont.
•Obviously the parties can declare a different intention; for example the seller might limit the passing of the property to a particular event, such as on payment of the price [Weiner v Gill [1906]
•Rule 5
•Unascertained goods
•‘appropriation has to be more than ‘selecting or setting aside’ the goods for the purpose of complying with the contract
•‘appropriation is understood to mean “an act which is intended and agreed, in terms of the contract, to transfer ownership to the buyer”
•Appropriation must be unconditional it is to pass the property
•Severance of the part sold from the bulk could be said to be unconditional appropriation subject to…
•examples
•The appropriation of 20 hogshead of sugar out of a bulk, where 4 hogsheads were delivered to the buyer, was considered an actual sale (Rohde v Thwaites (1827)
•The act of filling oil of peppermint into glasses which had been supplied by the buyer, was considered an actual sale (Langton v Higgins [1859])
•examples
•Where the goods where mixed with other goods, no property can pass; in Healy v Howlett [1917]
•A problem arises where goods are to be supplied and installed or becomes a fixture; the presumption is that property does not pass until the work is completed
•The appropriating is not unconditional where the seller has not intended unconditional appropriation
•appropriation with the assent of the seller/buyer
•A mere setting apart or selection of the seller’s goods which he expects to use in performance of the contract is not enough for the purpose of Rule 5 (Carlos Federspiel [1957])
•Assent does not necessarily have to be express; Assent can be inferred or implied (Pignataro [1919])
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