Underwood Ltd v Burgh Castle Brick and Cement Syndicate

Facts

• The sellers agreed to sell a condensing engine, described as free on rail in London.
• The engine was bolted down and embedded in a concrete floor at the sellers' premises.
• To deliver it the sellers had to detach it, dismantle it in part, and load it on a railway truck.
• During the process of loading the engine was damaged by a fall.
• The buyers refused to accept the damaged engine.
• The sellers contended that property had already passed and the buyers must bear the loss.

Issue

1. Whether property had passed to the buyers at the time of the damage, given that the seller still had to detach and load the engine.

Held

• The Court of Appeal held that property had not passed and the sellers bore the loss. A deliverable state means such a state that the buyer would be bound to take delivery of the goods. An engine still bolted into a concrete floor, requiring detachment and loading by the seller, was not in that state. Since the seller was bound to do something further to put the goods into a deliverable state, the rule now found in S.21 applied and property remained with the seller, and with it the risk under S.26.

Ratio Decidendi

The passing of property in specific goods is presumed to be postponed while the seller has outstanding work to perform in preparing them for delivery. Until that work is done and the buyer notified, the buyer cannot be required to accept the goods, so the parties cannot be taken to have intended property to pass.