5 to the bailee, although it is still a bailment if the thing to be returned, is returned in an altered form. As for instance a delivery of wheat to be manufactured into flour, the miller to return to the party delivering, a barrel of flour, for every four and one quarter bushels of wheat delivered to the miller, is a bailment. An oft quoted distinction is that made by C. J. Bronson, in the case of Mallory vs. Willis in which he says: "When the identical thing delivered, although in an altered form is to be restored, the contract is one of bailment, and the title to the property is not changed; but when there is no obligation to restore the specific article, and the receiver is at liberty to return another thing of equal value, he becomes a debtor to make the return, and the title in the property is changed; it is a sale." The following transaction, following the rule, was held to be a sale; the manufacturers of certain music boxes, supplied a music box with a slot attachment to one Westphal on the following terms, the music box was to be delivered and remittances for it were to be made out of the weekly earnings of the box, at the rate of two dollars a week, if the box did not earn this much the payment at the rate of two dollars a week was to be paid in any event. When the sum of two hundred and fifty dollars was paid in, then Westphal was to own the machine. The contract also stated that in case there was a default in any of the weekly payments, the whole amount was to become due and payable, or the music box company might at their election refund half the payments made, and reclaim the music box. The fact that the price to be paid is to be fixed at a later date would not make the delivery of grain a Foster vs. Pettibone, 57 Am. • Westphal vs. Sipe et al., 62 III., Dec., 530. I Mallory vs. Willis, 4 N. Y., 85. 111. bailment. The courts have repeatedly held that where grain is delivered to a warehouseman on the understanding that the person receiving it may take from it at his pleasure and appropriate it to his own use, and that the identical grain or grain of like quality was not to be returned, but that the money value thereof was to be ascertained by the market price on the day the depositor should choose to fix, the transaction is a sale and not a mere bailment.' But where there is a delivery of thing on trial to be used and if the trial is satisfactory, there exists an option to purchase; the delivery of the thing is a mere bailment and not a sale. Such a bailment would develop into a sale on the bailee exercising his option to purchase by signifying his acceptance, or the acceptance might be implied, by the act of the person to whom the thing is delivered, in retaining the thing an unreasonable length of time, beyond the time limited for the trial." It is to be borne in mind that in any close case where the language of the contract is ambiguous, the court will be guided by the real intention of the parties and not altogether by the use of certain words that might alone indicate either an intention to make a sale, or bailment, or something else.10 SECTION 3. SALE DISTINGUISHED FROM MORTGAGE. It is of frequent occurrence, that a difficulty arises in determining in a given case, where the possession of the goods are delivered by one, to another, where an indebtedness exists on the part of the person delivering the goods, in favor of the person who receives the goods, whether the delivery of the goods is in consideration of the cancellation of the debt, in whole, or in part, or Lonergan vs. Stewart, 55 Ill., 44. Hunt vs. Wyman, 100 Mass., 198. 10 Irons vs. Kentner, 51 Iowa, 88. whether the goods are delivered as a security, to the creditor for the existing indebtedness. If the debt is satisfied it is a sale, if the debt is not satisfied it is a mortgage or pledge." The retention of the evidence of indebtedness, such as a bond, or note by the creditor, would raise the presumption that the indebtedness remained unsatisfied, and that a pledge was therefore intended. If the conveyance extinguishes the debt, a subsequent or contemporaneous stipulation in the interest of the debtor, securing to him the right to repurchase ought not to be construed to the creditor's prejudice. Such a transaction is not to be construed a mortgage, it is a conditional sale.12 "It is a necessary ingredient of a mortgage," said C. J. Marshall, "that the mortgagee should have a remedy against the person of his debtor. If this remedy really exists, its not being reserved in terms, will not affect the case. But it must exist in order to justify a construction which overrules the express words of the instrument." 13 Where a sale is made which carries with it the right of repurchase in the vendor, unless the vendee could also compel repayment, it will not be held to be a loan on the security of the goods so transferred, it is an absolute conveyance.1 It remains with the court, in any case, to say what the contract means, where the contract is in writing and the facts are not in dispute, this raises a question of law. Where the parties are not agreed on the facts, the question is then one for the jury.15 A sale is so much like a chattel mortgage that a word on chattel mortgages is of value. 11 Smith vs. Beattie, 31 N. Y., 542; 12 Turner vs. Kerr, 44 Mo., 429. 14 Glover vs. Payne, 19 Wendell, 518. 15 Crosby vs. Delaware & Hudson Canal Co., 119 N. Y., 334. A chattel mortgage as defined, is a conveyance of personal property to secure the debt of the mortgagor, which being conditional at the time, if the condition be not duly performed, the whole title vests absolutely at law in the mortgage.16 A chattel mortgage was unknown to the Common law." The usual form of the chattel mortgage is a bill of sale with a defeasance clause, but any form of words indicating that the intention of the parties is that the property is conveyed for a security is in proper form.18 As far as third parties are concerned if they have notice that the instrument purporting to be a bill of sale is a mortgage, it will be treated as such,19 but as to innocent third persons who have been deceived by the form of the instrument, it will be held to be what it purports to be, and will be enforced as such where their rights are involved.20 Parol evidence is admissible to show that what purports to be a bill of sale is a mortgage.21 SECTION 4. SALES DISTINGUISHED FROM CONSIGNMENTS TO SELL. A mere consignee of goods, that are to be sold on a commission for the owner, is a factor, and the representative, or agent of the owner. The title remains in the consignor. And it has been held that a sale does not take place, but that it is only a consignment for sale, where the owner delivers goods to be sold at a price fixed by the owner and to be paid for at a rate agreed upon by the consignee at a date agreed upon.22 On the other 10 Wright vs. Ross, 36 Cal., 414. 17 Blystone vs. Burgett, 68 Am. Dec.. 658. 18 Mervine vs. White, 50 Ala., 388. 19 Wright vs. Wright, 2 Litt. (Ky),9. 20 Morgan vs. Shinn, 15 Wall. (U. S.), 105; Henderson vs. Mayhew, 2 Gills (Ind), 393. 21 National Ins. Co. vs. Webster, 83 Ill., 470; Mfrs. Bank VS. Rugee, 59 Wis., 221; see also Purington vs. Akhurst, 74 Ill., 490. 22 Andenreid vs. Betteley, 8 Allen, 302. hand, where goods are shipped to be paid for as sold, but at all events to be paid for in twelve months it is an absolute sale.23 So in the case where a consignee is invested with possession in a thing, to pass title as in himself, where the possession is held under an understanding with the owner, that as between themselves, no title is to pass until the thing is paid for, it was held that no title passes until payment was made.24 The owner of the goods left on consignment with another, who is invested with all the indicia of ownership, could not assert his ownership or title in the goods as against a purchase from the consignee, who bought in good faith, even though he bought under terms contrary to the way the agent was instructed to sell by the owner. SECTION 5. SALES DISTINGUISHED FROM GIFTS. A gift of property to be valid, in any case, must be by actual delivery and acceptance of the thing given.25 The law will however, presume acceptance of a beneficial gift where the recipient is unable because of lunacy or infancy to make an acceptance.26 The actual delivery and acceptance of the goods, on the other hand is not necessary to the validity of a sale unless they are specially made a part of the terms of the contract. With gifts, delivery, is an all necessary element, and even where goods have been turned over to another with instructions to deliver to adonee named. The owner may recall the gift before delivery is actually made to the donee.27 A gift of property being without consideration of a valuable nature, cannot be made if the donor thereby divests himself of property, in a way that would preju 23 Fish vs. Benedict, 74 N. Y., 613. 27 Picot vs. Johnson, 14 Ill., 342; see also Pinkslay vs. Starr, 149 N. Y., 432. |