taining title until the purchase price should be paid, the contract of sale providing that the notes should be signed and sent to the plaintiffs within ten days after the machines were started, and that in default the price should become due. It also contained the following clauses: "The company shall deliver said machines f. at Ottawa addressed to purchaser Station Railway, on or about the 15th day of October, 1899, or as soon after as same are finished and car obtained. . . . The property in the said machines shall remain in the company until full payment of all moneys and interest payable thereunder, all notes, obligations, and securities held by the company, and all moneys and interest payable to the company in respect of repairs and extra supplies and work done on said machines while anything is due hereunder, but the purchaser shall have possession and the right to use the machines at their own risk as to damages, or destruction by fire, or any other cause." The defendant refused to accept delivery and give the notes which were part of the purchase price, or to pay. The plaintiffs started suit, storing the goods at the same time in their warehouse, where delivery was to have been made. The goods were destroyed by fire without fault on the part of the plaintiffs, and the court held that the defendant was liable for the contract price.

III. View that vendor bears loss, Rule stated.

Some courts hold to the contrary, namely, that the loss must be borne by the vendor, basing their decisions on the principle that the loss follows the title; hence, the goods in the possession of the vendee are at the risk of the vendor. And in the event of their destruction, without the fault of the vendee, the latter is not obliged to pay the agreed price.

Alabama. - Stone v. Waite (1889) 88 Ala. 599, 7 So. 117; Bishop v. Min. derhout (1900) 128 Ala. 162, 52 L.R.A. 395, 86 Am. St. Rep. 134, 29 So. 11; Blue v. American Soda Fountain Co. (1907) 150 Ala. 165, 43 So. 709.

California.

Waltz v. Silveria

(1914) 25 Cal. App. 717, 145 Pac. 169.

Georgia. Randle v. Stone (1886) 77 Ga. 501; Glisson v. Heggie Bros. (1898) 105 Ga. 30, 31 S. E. 118; Mountain City Mill Co. v. Butler (1899) 109 Ga. 469, 34 S. E. 565; Commander Mills Co. v. Schafer (1915) 144 Ga. 37, 85 S. E. 1036; Whigham v. Hall (1911) 8 Ga. App. 509, 70 S. E. 23; Hill v. Fryer (1925) Ga. App.

126 S. E. 885. Compare Wells v. Fay E. Co. (1915) 143 Ga. 732, 85 S. E. 873; Klein & Son v. Vandiver (1919) 24 Ga. App. 290, 100 S. E. 654.

Massachusetts.-Swallow v. Emery (1873) 111 Mass. 355. See also Weed v. Boston & S. Ice Co. (1866) 12 Allen, 377.

Reason and application of rule.

In Glisson v. Heggie Bros. (1898) 105 Ga. 30, 31 S. E. 118, the court said: "It is a well-settled rule of law that where property is sold with the condition that the title is to remain in the vendor until the purchase price is paid, unless otherwise stipulated, the risk is on the seller, and in case of loss of the property without fault of the buyer, no action can be maintained for the purchase price." It appeared therein that a horse sold conditionally died before payment of the price and while title was still retained by the seller.

In Randle v. Stone (Ga.) supra, which was an action on a note given for the purchase price of an engine and boiler, the title to which was reserved by the vendor, and which were destroyed by fire while in the actual possession of the defendant before the maturity of the note, the court held that the loss fell on the vendor. Jackson, Ch. J., said: "The only question in the case is, Who had title when the fire occurred, if the articles were burned without fault in Randle?

. . The owner must suffer the loss, if there be no fault in the actual possessor, who is a bailee. This court

has substantially ruled the same point in analogous cases, not on reservation of title on contract, as here, but on the reservation the statute (Code, § 1593) makes before title passes to certain products of the soil; thus, recognizing the principle that in case of destruction by fire, the loss must be met by him who has title."

In Commander Mills Co. v. Schafer (1915) 144 Ga. 37, 85 S. E. 1036, the court said, in an official headnote: "This case is controlled in principle by the decision in Mountain City Mill Co. v. Butler (1899) 109 Ga. 469, 34 S. E. 565. (a) It was there ruled that 'the breach, by a purchaser, of a contract to pay a draft for the price of goods and remove the same from a railroad depot, the title to the goods remaining in the seller until such draft should be paid, did not involve the purchaser in liability to the seller for loss occasioned by the destruction by fire of the goods in the depot.' This ruling was not changed by the addition of the words, and more especially is this so when the seller's agent for the collection of the draft extended the time of the payment thereof until the day upon which the fire occurred.' An examination of the entire opinion in the case will show that the ruling was not made to depend upon the words last quoted, but that they furnished an additional reason to support the judgment. (b) The decision above cited was concurred in by the entire bench of six justices; and the request to review and overrule it is denied."

In Swallow v. Emery (1873) 111 Mass. 355, it appeared that the plaintiff sold and delivered to the defendant two horses and a wagon. The price was to be a gross sum for the whole property, and payable in labor. The articles were to remain the property of the plaintiff until the whole amount should be paid. After the payment, the plaintiff was to give the defendant a bill of sale. One of the horses died, without any fault on the part of the defendant. It was held that the loss of the horse was the plaintiff's loss, and disabled him from performing the contract on his part,

and that he would not be entitled to receive the gross sum for the rest of the property.

To the same effect, see Whigham v. Hall (1910) 8 Ga. App. 509, 70 S. E. 23, wherein it appeared that a mule sold conditionally died before payment was made by, and title was passed to, the vendee.

In Waltz v. Silveria (1914) 25 Cal. App. 717, 145 Pac. 169, it appeared that a safe was destroyed by fire while in the possession of the vendee, without fault on his part. In an action to recover the unpaid balance, under a contract of conditional sale, it was held that, in the absence of an agreement to the contrary, the risk accompanies the title to property, and that where there is a mere agreement to sell, and title has not passed, the loss falls on the vendor.

In Cobb v. Tufts (1884) 2 Tex. App. Civ. Cas. (Willson) 141, it appeared that the plaintiff had sold the defendant a soda fountain, taking the defendant's notes for the purchase price. In the notes it was expressly stipulated that the title to the property should remain in the plaintiff until the notes were paid. The property was delivered to the defendant, and without fault on his part was destroyed by fire. In a suit by the plaintiff upon the notes, the defendant pleaded the destruction of the property as above stated, and it was held, on general exception of the plea, that it was a good plea of failure of consideration, and the judgment was reversed because the court below had sustained plaintiff's general exception to it.

In the reported case (HOLT MFG. CO. v. JAUSSAUD, ante, 1312), it is held that the conditional vendor, rather than the vendee, of a harvester machine, must bear the loss where the vendee is not at fault and has no legal title in the property.

In Bishop v. Minderhout (1900) 128 Ala. 162, 52 L.R.A. 395, 86 Am. St. Rep. 134, 29 So. 11, it appearing that the parties had stipulated that the piano sold should remain the property of the vendors, and subject to their direction, the court declared its ad

herence to the rule that the loss follows the title.

It was held in Stone v. Waite (1889) 88 Ala. 599, 7 So. 117, that the loss fell on the conditional seller where merchandise was destroyed by fire before all the necessary calculations had been made to ascertain the ultimate price.

It was said by way of dictum in Weed v. Boston & S. Ice Co. (1866) 12 Allen (Mass.) 377, that the effect of a conditional sales contract entered into by the parties was to leave the title in the vendors and at their risk.

However, in Wells v. Fay & E. Co. (1915) 143 Ga. 732, 85 S. E. 873, a recovery of the price of property conditionally sold was permitted, notwithstanding the destruction of the property by fire, on the ground that it did not appear that the vendee was without fault on the bare fact of destruction being shown.

So, where the conditional vendee of a diamond stud lost it while in bathing, it was held that he was properly held liable on failure to prove that he was not at fault, and thus relieved of liability. Klein & Son v. Vandiver (1919) 24 Ga. App. 290, 100 S. E. 654.

Possession in third person.

In the absence of special stipulation as to the risk of loss, the loss of cattle purchased conditionally falls on the vendor, even though they are in the custody of a third person at the time of the sale. Hill v. Fryer (1925) Ga. App., 126 S. E. 885.

Effect of express agreement.

In spite of the view taken in certain jurisdictions that a conditional vendor suffers the loss incident to the destruction of the property, it is held in those jurisdictions that, if the parties to the conditional sale agreement expressly contract as to where the loss shall fall, the liability is governed by the agreement. Kentucky Wagon Mfg. Co. v. Blanton-Curtis Mercantile Co. (1913) 8 Ala. App. 669, 62 So. 368, writ of certiorari denied in (1914) 185 Ala. 671, 64 So. 1018; Boyer v. Ausburn (1879) 64 Ga. 271; Whigham v. Hall (1911) 8 Ga. App. 38 A.L.R.-84.

509, 70 S. E. 23; Moon v. Wright (1913) 12 Ga. App. 659, 78 S. E. 141; McKinney v. Battle Bros. (1913) 13 Ga. App. 255, 79 S. E. 92; Avery & Co. v. Middlebrooks (1914) 142 Ga. 830, 83 S. E. 944; Adams v. Walker (1920) 24 Ga. App. 646, 101 S. E. 815. See also Hoobler v. International Harvester Co. (1914) 185 Ala. 533, 64 So 567.

Thus, in Kentucky Wagon Mfg. Co. v. Blanton-Curtis Mercantile Co. (Ala.) supra, the action was for the payment of part of the purchase price of goods sold conditionally by the following agreement: "The title to and ownership of all goods which may be shipped under this contract shall be your property until all of my, or our, indebtedness to you shall have been paid in money; but nothing herein contained shall release me, or us, from making payment as herein agreed. Your responsibility ceases when goods are receipted for in good order by transportation company." It appeared that the goods were destroyed by fire while in the vendee's possession. The appellate court, in holding the vendee to be liable, said: "These provisions, especially the one first quoted, evidence a distinct agreement that the reservation by the payee. of the notes of title to the goods conditionally sold was not to have the effect of releasing the maker of the notes from its liability on them. the transaction, the maker of the notes acquired such an interest in the property for the price of which they were given that its destruction by fire did not amount to an entire failure of the consideration supporting the notes. It was so far vested with all the incidents of ownership, except the title, as to be enabled to deal with the property as the owner of it, to dispose of it for its own profit, subject only to the right of the payee to the proceeds of sales made until the notes should be paid. For all practical purposes it was the owner as completely as if it had acquired the title and had mortgaged the property to secure the purchase-money notes. The retention of title by the payee of the notes was but a form of security. The

By

vendee in the conditional sale, by giving a note by which the purchase price was unconditionally promised to be paid, and by assenting to a stipulation which provided that the retention of title by the vendor should not have the effect of releasing the vendee from the obligation to make payment as agreed, deprived itself of the right to escape liability on the notes by showing that the property for the price of which they were given was destroyed by fire before the notes were due. That it was the understanding of the parties that the vendee was to assume such risk of loss after the property was delivered to it is also indicated by the other provisions of the contract above referred to. Boyer v. Ausburn (1879) 64 Ga. 271."

In McKinney v. Battle Bros. (1913) 13 Ga. App. 255, 79 S. E. 92, the action was on a promissory note given for the purchase price of a mare, which had died without fault on the vendee's part. The note reserved the title to the animal until the price was paid, with a stipulation that in case of loss or damage to the animal it should become the property of the vendee, and also stipulating that the sellers did not insure the life, soundness, or work of the animal. Holding the vendee to be liable, the court said: "We think that the judge correctly held that the death of the mare was the loss of the buyers, and not of the sellers. Under the provisions of the Civil Code, § 4123, the principle stated by counsel for the plaintiffs in error, and which it is insisted the court erred in not presenting to the jury, that where property is sold and delivered and title is not to pass until payment in full of the purchase money, and the property is destroyed or dies, all without fault of the vendee, the loss must fall on the vendor,-is a correct general rule. However, an exception to this rule may be created in any case by an express contract under which the buyer, and not the seller, assumes the risk of loss. In our opinion that is precisely what occurred in this case."

In Boyer v. Ausburn (Ga.) supra, it was held that by special contract

the conditional vendee of a horse had bound himself to pay for the horse, whether it was dead or alive at the time payment fell due.

It was held in Moon v. Wright (1913) 12 Ga. App. 659, 78 S. E. 141, that the conditional vendee of live stock should bear the loss by death, where the contract specially bound the purchaser to stand such loss.

It appeared in Adams v. Walker (1920) 24 Ga. App. 646, 101 S. E. 815, that without fault of the conditional vendee of a mule it died before payment of a note given, and while title was still in the vendor. The contract provided as follows: "It is fully understood and agreed between the parties hereto that said S. N. Adams makes no warranty, either express or implied, as to the soundness, health, or habits of said property, but the maker thereof assumes all risk in reference thereto, and shall not be entitled to an abatement of the amount of this note for any reason whatsoever." The court, in holding that the vendee assumed the risk, said: "The outstanding thought in the first clause is the negation of warranty as to the soundness, health, and habits of the mule, and it seems more reasonable to believe that the next clause is merely an amplification of the first, whereby the matter of warranty is more fully set out, the parties saying, in effect: "The seller does not warrant the soundness, health, or habits of the mule, and the buyer assumes the risk as to those things.' The contracting parties may, if they so desire, particularize the loss the buyer is to suffer, or, they may, without specifying any particular liability assumed by the buyer, use such

general and

general and comprehensive expressions as will cause all loss to fall upon the seller. It appears to the court that the expression, 'and [the maker] shall not be entitled to an abatement of the amount of the note for any reason whatsoever,' was intended to cover, and did cover, the loss of the mule by death before the purchase money was paid and while it was in possession of the buyer."

In Avery & Co. v. Middlebrooks

(1914) 142 Ga. 830, 83 S. E. 944, the court, in holding the vendee liable, in an action on a note given to secure the purchase price of machinery under a contract of conditional sale, said: "E. E. Middlebrooks and J. M. Middlebrooks gave to Avery & Company a promissory note for the purchase price of certain machinery. It was stipulated in the note that the title should not pass until payment of the purchase money; and that, on failure to pay it at maturity, the seller might take possession of and sell the property, apply the proceeds to the payment of the debt, and pay over the balance, if any, to the purchaser. The instrument then proceeded: 'And further, we, makers and indorsers, hereby guarantee [the sellers] against any damage to the said machinery by fire whilst in the possession of the undersigned, and also agree to keep the same insured for at least one half of the purchase money for the benefit of the [sellers].' Suit was brought on the note. On the trial it was conceded that the machinery had been destroyed by fire before the suit was brought. The presiding judge directed a verdict for the defendants. A motion for a new trial was overruled and the plaintiffs excepted. By the Civil Code (1910), § 4123, it is declared: 'Where the property is sold and delivered, but title is not to pass until payment in full of the purchase money, and the property is lost, dam

aged, or destroyed without the vendee's fault, he is entitled to rescission of the contract or to an abatement in the price, unless it is otherwise agreed in the contract of sale.' In Randle v. Stone (1886) 77 Ga. 501, the general rule applied, and it was not 'otherwise agreed.' By agreement such loss may be made to fall on the purchaser. The exact question is as to the effect of the provisions in the contract under consideration. Did they make the loss fall on the buyers or the sellers? The buyers guaranteed the sellers against any damage to the machinery by fire while in the buyers' possession. It could hardly be that they intended to make the loss fall on the sellers, so that the latter could not collect the note, and then raise a separate and distinct liability on the part of the buyers to the sellers, growing out of the guaranty against damage to the machinery by fire. The contract is to be considered as a whole. The language as to guaranteeing the sellers against loss by fire is to be construed in connection with its context and the apparent purpose for which it was em ployed. So considered, there can be little doubt that it was 'otherwise agreed in the contract of sale,' so that loss by fire should fall on the buyers instead of the sellers."

In Whigham v. Hall (1911) 8 Ga. App. 509, 70 S. E. 23, the purchaser, by special contract, assumed the risk. R. E. LaG.