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different interpretation may be adopted by the State courts after such rights have accrued." It is said that " It is said that "as the very object of giving to the national courts jurisdiction to administer the laws of the States in controversies between citizens of different States was to institute independent tribunals which it might be supposed would be unaffected by local prejudices and sectional views, it would be a dereliction of their duty not to exercise an independent judgment in cases not foreclosed by previous adjudication." Arthur M. Alger.
THE RISK OF LOSS AFTER AN EXECUTORY CONTRACT OF SALE IN THE
N the English and American law of sales of personal property there is curiously little discussion in regard to the risk of property before transfer of title. It was assumed without discussion that the maxim res perit domino was of universal application, and this bare assertion has sufficed to fix the law.2 In the absence of agreement to the contrary, the risk is with the seller, though the property be identified, till the moment when title is transferred. If the property is destroyed or injured before that time, the buyer cannot be compelled to pay the price,3 and if he has paid the price in advance, it may be recovered. It is well understood, however, that the parties may, by special agreement, fix
1 It is curious that this maxim of the Roman law should be quoted in our law chiefly in a class of cases to which it did not apply in the Roman law.
2 In Noy's Maxims, c. xlii. it is said: "If I sell my horse for money, I may keep him until I am paid, but I cannot have an action of debt until he be delivered, yet the property of the horse is by the bargain in the bargainee or buyer; . and if the horse
die in my stable between the bargain and the delivery, I may have an action of debt for my money, because by the bargain the property was in the buyer." It will be observed that the case here supposed is a sale with a lien for the price. As the dependency of mutual promises in any executory bilateral contract was little understood before the present century, and the question whether impossibility is so far an excuse for non-performance of a dependent promise, that the counter promise must nevertheless be performed, has been settled still more recently, it is obvious that only modern decisions have much value in this discussion. In Rugg v. Minett, 11 East, 210, it was taken for granted that risk attends title, and the only discussion related to the question whether title had in fact passed. So clear is the law that it is hardly formally stated by so acute a writer as Benjamin. The only statement he makes is a casual one, without citation of authorities, in § 308.
8 Calcutta Co. v. De Mattos, 32 L. J. Q. B. 322, 335; Tillson v. United States, 129 U. S. 101; Hays v. Pittsburgh Packet Co., 33 Fed. Rep. 552; Jones v. Pearce, 25 Ark. 545; Crawford v. Smith, 7 Dana, 59; Brown v. Childs, 2 Duv. 314; Lingham v. Eggleston, 27 Mich. 324; Hahn v. Fredericks, 30 Mich. 223; Wilkinson v. Holiday, 33 Mich. 386; Slade v. Lee, 94 Mich. 127; Drews v. Ann River Logging Co., 53 Minn. 199; Fairbanks v. Richardson Drug Co., 42 Mo. App. 262; Towne v. Davis (N. H.), 22 At. Rep. 450; Terry v. Wheeler, 25 N. Y. 520; Kein v. Tupper, 52 N. Y. 550.
Logan v. Le Mesurier, 6 Moo. P. C. 116; Stone v. Waite, 88 Ala. 599; Joyce v. Adams, 8 N. Y. 291; Williams v. Allen, 10 Humph. 337. The citations in this and the preceding note might easily be increased.
the transfer of the risk at a different time from the moment when the title passes.1
Thus far it has been assumed that the buyer was not in default at the time of the accident. If the buyer was in default, the seller has several remedies against him. He is generally allowed to treat the goods as the buyer's, and sue for the price, or he may retain the goods and sue for damages for breach of the contract. If he takes the first course, he becomes a bailee, and if a loss. occurs without his fault the buyer must bear the loss; if the latter course, the loss falls on the seller. If the seller has not indicated which course he intends to pursue, the loss would probably fall on him, since the former remedy is the more unusual, and it would not be assumed that the seller was holding the property for the benefit of the buyer unless he had indicated it in some way.2
The law in regard to risk in sales of personal property is thus generally settled, and though without discussion, yet probably correctly and in accordance with the intention of the parties. There are a few cases, however, where there is a conflict of decision. Suppose the seller delivers the property to the buyer with the agreement that the seller shall retain title until the price is paid, - the ordinary case of conditional sale, and before the time for payment the property is destroyed. This sort of transaction has become very common of late years, and not infrequently the buyer gives a promissory note containing the statement that the note is given for a specified chattel, the title of which is to remain in the seller until the note is paid. Should the loss fall on the seller because he holds the legal title?3
1 Inglis v. Stock, 10 App. Cas. 263; Martineau v. Kitching, L. R. 7 Q. B. 436; Castle v. Playford, L. R. 5 Ex. 165; 7 ib. 98; Alexander v. Gardner, 1 Bing. N. C. 671; Fraganov. Long, 4 B. & C. 219.
2 See Neal v. Shewalter, 5 Ind. App. 147, where the loss was thrown on the sellers because they "did not place themselves in the position of bailees for the " purchasers.
In Top v. White, 12 Heisk. 165, this question arose in regard to slaves which had been delivered with an estate under a contract of sale, but the title had been retained. Before the contract was fulfilled the slaves were emancipated. It was held that the purchaser must pay the price, the court saying (at p. 190): "In the application of the maxim, property perishes to the owner, I understand by the owner not the party who has the naked legal title, but the party who is the beneficial equitable owner." So makers of promissory notes such as those described have been held liable, though the property which has the consideration of the note perished before its maturity. Burnley v. Tufts, 66 Miss. 48; Tufts v. Wynne, 45 Mo. App. 42; Tufts v. Griffin, 107 N. C. 47. Contrary decisions are Randle v. Stone, 77 Ga. 501, and Arthur v. Blackman, 63 Fed. Rep. 536 (North Dist. of Washington).
In Swallow v. Emery, 111 Mass. 355, such a note was held not to be a negotiable
In order to determine the proper answer to this question, it is necessary to consider the legal position of the parties to an executory contract for the sale of personal property. Only personal obligations are created. The purchaser acquires no jus in rem, and the owner" may, in defiance of his contract, sell to some third person and give him a perfectly good title, even if that third person had notice of the prior contract." It is necessary also "to point to a distinction, which, although a fine one, seems nevertheless to be a clear one, between contracts which are intended to operate as sales at some future time, and contracts which are intended to operate merely as promises to sell. It is the difference which exists between an agreement that the property shall pass on the happening of some future event without anything further to be done by either party in that behalf, and an agreement by which one party promises that on the happening of some event he will then transfer the property."2 It is comparable to the difference be
promissory note because, as the court said, if the consideration perished before maturity, the maker would not be liable. The note was therefore not an absolute promise. A similar decision, based on the same reason, was made in Sloan v. McCarty, 134 Mass. 245. On the other hand, in Chicago, &c. Co. v. Merchants' Bank, 136 U. S. 268, such a note was held negotiable, and the argument of the Massachusetts cases was expressly denied, the court saying that the maker would be bound to pay the note even though the property for which it was given perished by accident before maturity of the note. Other decisions holding such notes negotiable, and necessarily involving, though not stating, the same conclusion, are Howard v. Simpkins, 69 Ga. 773; Mott v. Havana Bank, 22 Hun, 354; Heard v. Dubuque Bank, 8 Neb. 10; Newton Wagon Co. v. Diers, 10 Neb. 284; W. W. Kimball Co. v. Mellon, 80 Wis. 133. It was held that such notes were not negotiable, but for reasons not affecting the question under consideration, in Killam v. Schoeps, 26 Kan. 310; South Bend Works v. Paddock, 37 Kan. 510; Wright v. Traver, 73 Mich. 493; Third Bank v. Armstrong, 25 Minn. 530; Minneapolis Harvester Works v. Hally, 27 Minn. 495; Stevens v. Johnson, 28 Minn. 172; Deering v. Thom, 29 Minn. 120; (but see Aultman v. Olson, 43 Minn. 409); Dominion Bank v. Wiggins, 21 Ont. App. 275.
1 Blackburn, Contract of Sale, 2d ed., p. 244.
2 Ibid., p. 247. The passage continues: "In the latter case the property does not pass until he does not sell the thing, although the event may have happened, and such a contract at law creates merely a personal obligation to pass the property, and that at law will not create any real right or jus in rem. In equity, however, the vendee is in a better position, and such a contract would, when the event had happened, give him a good equitable title to the goods against all persons, excepting any one who, in the mean time and bona fide, may have had the property transferred to him." The leading case illustrating the rule in equity is Holroyd v. Marshall, 10 H. L. C. 191. See also Collyer v. Isaacs, 19 Ch. D. 342; In re Clarke, 36 Ch. D. 348; Morris v. Delobbel-Flipo,  2 Ch. 352, and other cases therein referred to. In the United States this doctrine of equity is generally followed (Am. & Eng. Cyc. of Law, vol. iii. pp. 183, 184, vol. xxi. p. 472) but not universally. Blanchard v. Cooke, 144 Mass. 207. It will be observed that the question can only arise in equity when the contract of sale is one of which equity
tween the present purchase of property in remainder expectant on the death of A., and an executory agreement to purchase the same property upon the death of A. It seems obvious that, in the first class of cases, where the buyer intends the present purchase at the moment of entering into the agreement of a future right, the loss should fall upon the purchaser.1 A third case arises where the agreement is that the buyer shall at once receive all the incidents of ownership except the bare legal title which is retained as security. It is this last case that is illustrated by a sale with delivery of possession and retention of title till the price is paid. Obviously the buyer has every right of ownership consistent with the seller's retention of security for the price. That security is the measure of the seller's right. The transaction is exactly the same in legal effect as a transfer of title and a mortgage back for the price, and the intent of the parties is the same. No further act on the part of the seller is expected to take place at a future day. By refusing to receive the money due he could not repudiate the transaction, rendering himself liable to a personal action alone.2 The trans
will take cognizance, and that the vendee's equitable title arises at the time when, by agreement, he was to have the legal title.
1 Dowdy v. McLellan, 52 Ga. 408. In this case it was held that the maker of a promissory note given for a reversionary interest in slaves was not relieved from liability by the emancipation of the slaves. Such cases are rare in sales of personal property.
2 In Carpenter v. Scott, 13 R. I. 477, 479, speaking of such a sale, the court said: "Under it the vendee acquires not only the right of possession and use, but the right to become the absolute owner upon complying with the terms of the contract. These are rights of which no act of the vendor can divest him, and which, in the absence of any stipulation in the contract restraining him, he can transfer by sale or mortgage. Upon performance of the condition of the sale, the title to the property vests in the vendee, or, in the event that he has sold or mortgaged it, in his vendee or mortgagee, without further bill of sale. Day v. Bassett, 102 Mass. 445, 447; Crompton v. Pratt, 105 Mass. 255, 248; Currier v. Knapp, 117 Mass. 324, 325, 326; Chase v. Ingalls, 122 Mass. 381, 383."
In Chicago Railway Equipment Company v. Merchants' Bank, 136 U. S. 268, 283, while referring to notes each of which contained a statement that it was given for personal property the title to which should remain in the payee until the note was paid, Harlan, J., who delivered the opinion of the court, said: "The agreement that the title should remain in the payee until the notes were paid . . . is a short form of chattel mortgage. The transaction is, in legal effect, what it would have been if the maker, who purchased the cars, had given a mortgage back to the payee, securing the notes on the property until they were all fully paid. . . . The suggestion that the maker could not have been compelled to pay if the cars had been destroyed before the maturity of the notes, is without any foundation upon which to rest. The agreement cannot properly be so construed. The cars having been sold and delivered to the maker, the payee