Bennett Bros. v. Tam

24 Mont. 457 | Mont. | 1900

MR. CHIEF JUSTICE BRANTLY,

after stating the case, delivered the opinion of the Court.

The record does not disclose upon which one of the grounds the motion was sustained. It is therefore incumbent upon us to examine them all, and, if any one of them justifies such action, the judgment and order must be affirmed; for, though several other errors are assigned in plaintiff’s brief, the questions presented by the motion are the only ones pressed upon our attention.

1. We shall most conveniently consider the first and second grounds together. Our attention is thus invited to the nature of the written contract set forth in the statement. The plaintiff insists that it evidences a conditional sale; defendant insists that the sale was absolute, vesting title to the buggy in the purchaser, subject only to a lien in favor of the plaintiff, and that this lien was lost when the property passed into the hands of Fitohett. We think plaintiff’s'construction the correct one. Taking the instrument by its four corners, and deducing from the terms used therein by the parties themselves their intention at the time the contract was entered into, it is manifest that it was the intention of all the parties that the title should not pass to Pittman and Lemon, or either of them, until the purchase price should be fully paid. The payment is a condition precedent to the vesting of the title, the purchaser obtaining no right whatever to, or interest in, the subject of the contract, except to be vested with the title upon the full performance of this condition, and the possession and use of the property until default, or until the vendor exercises its option, upon deeming itself insecure, to declare the purchase price due, and to resume possession. Contracts of this character have been constantly upheld in this state, whether they have assumed the form of conditional sales, as in this instance, or that of a lease with the right to purchase; and it is well settled under our decisions that bona fide purchasers from the person who has possession of property under such a contract obtain no title to it as against the original vendor. This is upon the theory that the purchaser under the contract can convey no better right or title than he himself has. The vendor under such a contract remains the owner, and does not become a mere lienor, and his right to the possession after default, or upon the exercise of his option, is absolute. The case of Heinbockle v. Zugbaum, 5 Mont. 344, 5 Pac. 897, is determinative of the question here involved. It is there held, in substance, that a sale of chattels on condition that the title shall not pass until payment of the purchase price, though possession be delivered, confers no title on the vendee, or a bona fide purchaser from him, until the precedent condition be fully performed. The decision of this case was made after an examination of the decided cases, and by subsequent approval the rule therein stated has become the rule of decision in this Court. (Silver Bow Mining & Milling Co. v. Lowry, 6 Mont. 288, 12 Pac. 652; Miles v. Edsall, 7 Mont. 185, 14 Pac. 701; Goodkind v. Gilliam, 19 Mont. 385, 48 Pac. 548; Sanford v. Gates, Townsend & Co. et al., 21 Mont. 277, 53 Pac. 749.)

It is argued by the defendant that, notwithstanding the rule laid down by these cases, the contract in question is void as to the defendant, because it was never acknowledged and recorded with an affidavit of all the parties attached, as required by the provisions of Article III of Chapter II of Title XIY of the Civil Code, pertaining to mortgages of personal property. Sections 3861 — 3865 of that Code prescribe the requirements necessary to be observed in executing a mortgage, and Section 3861 provides that the omission of these requirements renders the contract void as to the creditors of the mortgagor and subsequent purchasers and incumbrancers of the property in good faith for value. Section 3871 also further provides: “The provisions of the foregoing sections of this article shall extend to all such bills of sale, deeds of trust, and other conveyances of goods, chattels, or personal property, as shall have the effect of a mortgage or lien upon such property. ’ ’ A mortgage, under our Code, is a mere lien (Civil Code, Sec. 3815), and a lien is defined as “a charge imposed in some mode other than by a transfer in trust upon specific property, by which it is made security for the performance of an act’ ’ (Civil Code, Sec. 3730). Examining Section 3871 with this definition in mind, we see at once that it has no reference to conditional sales like the one in question. Such contracts do not have the effect of a mortgage, nor is the situation of the parties with reference to the subject of the contract the same in case of the former as in case of the latter. In case of a conditional sale the absolute ownership remains in the vendor, while the vendee holds possession as a bailee or lessee, as the case may be, determinable by the vendor upon default or abuse of the property by the vendee before that contingency occurs. Under a mortgage contract such as is contemplated by the provisions of the statute referred to, a specific charge is fixed upon the property in favor of the mortgagee as security for the performance of the other stipulations of the contract by the mortgagor, he retaining both the title and possession until default. In the former case the rights of the vendee to the possession of the property are terminated by a resumption of possession by the vendor. Under the mortgage contract, though the mortgagee may take possession, the rights of the mortgagor can be terminated only by foreclosure, or by stipulation of the parties. In each case it is a matter of intention of the parties, and this Court, in laying down the rule of decision in the cases cited, has been guided ,by this intention as expressed by the parties, notwithstanding the provisions of Section 3871, which was among our statutes at the times these various decisions were rendered. (Revised Statutes 1879, Fifth Division, Sec. 905; Compiled Statutes 1887, Fifth Division, Sec. 1549.) The contract under consideration is not, in effect, a mortgage, nor is it void as to innocent third parties; and-it was error in the trial court to so hold.

2. Defendant argues that, though the trial court erred in sustaining the motion on the grounds just noticed, its action, can still be justified upon the third ground stated, and insists that the contract is void because it is in conflict with Section 2243 of the Civil Code, which provides: “Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided in the next section.” Whether the stipulation mentioned comes within this provision or not is a question not necessary to be decided in this case. In any event, the "denunciation is directed at the particular agreement designated by the statute, and leaves the contract otherwise intact, to be enforced according to the intention of the parties, just the same as if this clause had been omitted. If, however, it be conceded that the contract is wholly void, this would not aid the defendant. The plaintiff’s title does not depend upon the contract. It had full title when the contract was made. The title could not pass to Pittman under a void contract. Therefore Pittman acquired no title, and could confer none upon Fitchett. The plaintiff would still be entitled to recover. The statutes regulating the right of redemption have no application to this case, because the plaintiff has never parted with its title. (Sanford v. Gates, Townsend & Co. et al., supra.) Under no view of the question presented by this ground of the motion can the action of the district court be sustained.

3. Nor can its action be sustained upon the last ground stated in the motion. There is nothing in the proof which tends to show that the plaintiff did anything to deceive or mislead Fitchett and Tam, or either of them, to their injury, or that either made purchase of the buggy upon an inducement, real or apparent, held out by any of plaintiff’s agents. True, Fitchett purchased without actual knowledge of the condition of the title, but he got no better right than Pittman had, and Tam obtained no better right than did Fitchett. If plaintiff chose to defer action against Fitchett, and endeavored to induce Pittman to fulfill his agreement, accepting payments from him, after knowledge of the sale to Fitchett, this was an act of grace on its part to the advantage of Fitchett, and he stands in no attitude to complain. (Van Allen v. Francis, 123 Cal. 474, 56 Pac. 339; Hegler v. Eddy, 53 Cal. 597; Quinn v. Parks & Lacy Machinery Co. 5 Wash. 276, 31 Pac. 866.)

4. Finally, defendant insists that the judgment and order of the district court should be affirmed because the proof fails to disclose a formal demand made upon him before this action was begun. There is no merit in this contention. The proof shows that the agent of plaintiff demanded of Fitchett in December, 1896, that he either pay the balance of the purchase price or deliver up the buggy, and that Fitchett then stated that he would do neither, that the buggy was his, and that the only way plaintiff could get it ‘was at the end of two law suits. ’ ’ Under the circumstances this shows sufficient demand. After the statement thus made by Fitchett, any further demand was entirely unnecessary. (Cobbey on Replevin (2d Ed.), Secs. 450, 474; Shinn on Replevin, Secs. 304, 305.)

The judgment and ordér appealed from are reversed, and the cause is remanded for a new trial.

Reversed and remanded.

Mr. Justice Word, being absent, takes no part in this decision.