Kentucky Wagon Manufacturing Co. v. Blanton-Curtis Mercantile Co.

62 So. 368 | Ala. Ct. App. | 1913

WALKER, P. J.

— In the case of Bishop v. Minderhout & Nichols, 128 Ala. 162, 29 South. 11, 52 L. R. A. 395, 86 Am. St. Rep. 134, it was held that the payee of a note given for goods conditionally sold and delivered to the maker under an agreement that the title thereto should remain in the payee until the purchase price had been paid could not maintain an action on 1he note, when the goods for the price of which it ivas given were, without the fault of the maker, destroyed before the note was due. We are aware of no rule of law which would *671forbid the parties to such a transaction to stipulate against tbe destruction of the goods being given such, an effect. And we think that this was done in the instant case. The note sued on was given for part of the purchase price of a lot of wagons, wagon parts, and articles for wagon repairs shipped to the maker of the note on the payee’s acceptance of a written order, made by the maker of the note filling out a form of order which provided for the giving of notes for the stipulated purchase price, and contained the following provisions: “The title to and ownership of all goods Avhich may be shipped under this contract, as well as of all other goods shipped by you to me, or us, on subsequent orders, shall remain in you, and their proceeds in case of sale 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. * *” “Should I, or we, become insolvent, execute an assignment or chattel mortgage, sustain loss by fire, transfer property, or close out business, or in case of death of any member of the firm, or failure to carry out any of the conditions of this contract, then, and in any such event, all obligations provided for in this contract, or arising therefrom, shall become due and payable at once, or at any time thereafter at your option. “Your responsibility ceases when goods are receipted for in good order by transportation company.” 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.

It is suggested in the brief of the counsel for the ap-pellee that the destruction of the articles by fire before the note was due had the effect of a failure of consideration for the note. This suggestion cannot be ap-*672proyed. By 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 for their payment. — Steele v. State, 159 Ala. 9, 48 South. 673. The acquisition by the maker of the notes of such a beneficial interest in the property for the price of which they were given constituted a valid consideration to support an unconditional agreement on its part to pay the price and to assume the risk of the destruction of the property.

The 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 o nthe notes by showing that the property for the price of which they were given Avas destroyed by fire befo.re the notes were due. That it -was the understanding of the parties that the vendee Ayas to assume such risk of loss after the property Avas delivered to it is also indicated by the other provisions of the contract above referred to . — Boyer v. Auhburn, 64 Ga. 271. The conclusion folloAvs that the trial court was in error in its finding and judgment.

Reversed and remanded.