Do the trees still attached to the ground constitute goods?
Sec 2 of the SOG Act states that goods includes all chattels personal other than things in action and money, and all emblements, industrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under a contract of sale. The trees in the land therefore constitute goods.
What type of goods are they?
The facts state that ‘all the trees which conformed to a certain stated minimum specification would be sold over a 15 year period
Specific goods are goods that are identified and agreed upon in the contract. In this scenario the type of goods to be acquired was agreed upon but there was no physical identification of the trees to be cut in a forest among many other trees of different specification. It is submitted that the goods were unascertained.
The test for ascertaining goods was put forth by Mr. Ojiambo who stated that to ascertain goods one must identify them, set aside and agree upon.
The trees were to be cut over a 15 year period in a forest where there were other trees with other specifications
Sec 18 of the SOG Act states that where there is a contract for the sale of unascertained goods, no property in the goods is transferred until the goods are ascertained. Risk prima facie passes with property[1].
Prof Aatiyah outlines the different types of unascertained goods as;
1. Goods to be manufactured or grown by the seller
2. Purely generic goods
3. An unidentified portion of a specified bulk or whole
It is submitted that the timber goods falls in the 3rd category.
What is the effect of the fact that the defendant had started harvesting the trees?
He had appropriated into the contract that which he had harvested however that which he had not harvested had not been appropriated into the contract. Property in the harvested goods had passed due to appropriation.
In re London Wine Co (Shippers) Ltd 1986 PCC 121[2] a company sold wine to customers while retaining possession of the wine. The customers paid for wine as well as for subsequent storage charges. The sellers gave them certificates of title but there was no actual earmarking or physical segregation of the wines sold to the different customers. The wine company became insolvent and the buyers sought to claim ownership and it was upheld that the wine still belonged to the company.
Re Blyth Ship Building Company 1926 Ch[3] A agreed to build a ship for B. B was to pay for it in installments as the work proceeded. The K[4]provided that on payment of the first instalment everything including the vessel and materials appropriated shall belong to B. B became insolvent before the ship was complete. The CA[5]held that property in the incomplete ship had passed but not for the worked and unworked materials that were lying around but not incorporated into the ship.
Similarly the unharvested, un-segregated timber was still the property of the company when the nationalization took place. Since the buyer had already harvested some timber it should be quantified as against the first instalment.
Further, it should be held that this nationalization frustrated the contract. In the case of Kursell vs Timber Operators and Contractors[6] in this case the buyer had bought trees of a certain dimension from a Latvian forest. Shortly after the purchase, the government nationalized the forest. The court held that the property had not passed to the buyer as the goods had not been ascertained as per section 18.
Case B
Company invested in gold coins. Company kept the gold in mass and never separated it into portions. Company gave certificates of ownership to the investors. Company became insolvent. Investors want to lay a claim in context of insolvency not covered but essential) and need to establish if the hold any proprietary rights.
Sec 18 of the SOG Act states that property never passes in unascertained goods. Sec 19 leads us further to find that property in specific and unspecific goods passes when intended to pass. Sec 20 halts us to the reality that property in specific and ascertained goods passes when the K is made.
The gold bars were still in mass and this shows that they were unascertained. the bars were not physically segregated, identified, agreed upon and set aside as such the investors have no proprietary claims as property never passed to them in law. Refer to the case of In re London Wine Co (Shippers) Ltd 1986 PCC 121 (above).
[1] Sec 18 Sale of Goods Act
[2] Aatiyah Sale of Goods, 12th edn, Pg 334
[3] Aatiyah Sale of Goods, 12th edn, pg 494
[4] Contract
[5] Court of Appeal
[6] 1927 1 KB 298
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