A sold four buses to B. The buses were specific and in deliverable state. The delivery however was to be made in two instalments, each instalment to be paid for on delivery. The buses were destroyed in fire before the delivery date. A filed a suit for the price of the buses. B raised on the plea that the delivery having been postponed the property in the buses did not pass to him. Decide giving reasons.

The Governing Principle: Section 20

Section 20 lays down the primary rule for the passing of property in specific goods: where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer at the time the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed. The section proceeds on the footing that the parties' primary intention, absent any contrary stipulation, is that ownership should shift to the buyer at once upon formation of an unconditional bargain concerning goods already specifically identified and ready for handing over — the postponement of the mechanics of delivery or payment being treated as separate, subsequent matters that do not affect the moment of transfer of ownership itself.

Applying Section 20 to the Facts

On the facts, the four buses were specific goods — they were identified and agreed upon individually, not merely as an indeterminate quantity out of a larger stock — and they were in a deliverable state, meaning they were in such a condition that B, under the contract, would be bound to take delivery of them as they stood, without any further act needing to be done by A to put them into a deliverable condition. The contract between A and B was, on these facts, unconditional — there is nothing to suggest that the passing of property was made contingent upon any condition precedent, such as inspection, testing, or approval. Since both conditions of Section 20 are satisfied — specific goods, in a deliverable state, under an unconditional contract — the property in all four buses passed to B at the very moment the contract of sale was concluded, notwithstanding that delivery was to be made in two instalments and that payment for each instalment was to be made only upon delivery of that instalment.

Instalment Delivery and Deferred Payment Do Not Displace Section 20

B's argument rests on the mistaken premise that because delivery (and correspondingly payment) was postponed and staggered into instalments, property could not have passed until each instalment was actually delivered. This confuses the mechanics of performance with the question of ownership. Section 20 expressly anticipates and rejects precisely this line of reasoning — it states in terms that it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed. The arrangement for instalment delivery and instalment payment is a matter going only to the mode and timing of performance of the contract; it does not convert what is otherwise an unconditional sale of specific, deliverable goods into a conditional one. Had the parties wished to postpone the passing of property until delivery of each instalment, they would have needed to say so expressly or by clear implication — nothing on the facts suggests any such contrary intention was expressed.

Passing of Risk Follows Passing of Property

Since property in all four buses passed to B at the time the contract was made, the risk in the buses likewise passed to him under Section 26, which lays down that, unless otherwise agreed, the goods remain at the seller's risk until property is transferred to the buyer, but once property has passed, the goods are at the buyer's risk whether delivery has been made or not. The buses were destroyed by fire before the delivery date — but since ownership had already vested in B at the point of contracting, this loss falls squarely on B as owner, not on A. A, having done nothing wrong and having a completed, unconditional sale on his hands, is entitled to sue for and recover the price of the goods notwithstanding that they were destroyed before he could physically hand them over.

Distinguishing This from Section 18 Cases

This case must be sharply distinguished from situations involving unascertained goods, where Section 18 requires actual ascertainment before property can pass at all, and where the mere postponement of delivery would leave the goods in a state of continued ownership by the seller until identification occurs. Here, by contrast, the buses were specific, individually identifiable vehicles from the very inception of the contract — there was no process of ascertainment left to be performed. The distinction drawn by the Act between specific goods (Section 20) and unascertained goods (Section 18) is precisely what separates this case from one where a plea of the kind B raises might actually succeed. Since these were specific buses, already earmarked and ready for delivery, Section 20 applies in its full force, and B's plea collapses.

Decision

A succeeds in his suit for the price of the four buses. The property in the buses passed to B at the moment the unconditional contract of sale was made, since the buses were specific goods in a deliverable state, and this passing of property was wholly unaffected by the postponement of delivery into two instalments or by the deferral of payment to the time of each instalment's delivery, as Section 20 expressly provides. The risk of loss, following the property, had accordingly already shifted to B before the fire occurred, and B remains liable to pay the full price notwithstanding the destruction of the buses and his consequent inability to ever take actual delivery of them.

Summary Table