275 N.W. 681 | Minn. | 1937
May 22, 1935, plaintiff's assignor, McNeal Motor Sales Company, sold on conditional sale contract an automobile to one Emanuelson. A down payment left a balance of $650 payable in monthly instalments, the buyer giving his promissory note therefor. Both *211 note and contract were assigned to plaintiff. January 2, 1936, the buyer being in default on several instalments, plaintiff commenced action for their recovery and twice garnished his wages. January 18 Emanuelson sold the car to defendant and went into voluntary bankruptcy three days later. February 5, 1936, plaintiff dismissed its action for the overdue instalments, released the garnishments, and later brought this suit in replevin. The court first found for plaintiff and ordered judgment for return of the car or its value. Subsequently, on motion, the trial court reversed itself and ordered judgment for defendant. From that order this appeal was taken.
The first and correct decision below was on the ground that mere suit for the purchase price did not constitute an election to treat the sale as absolute and thus bar the seller's right to repossess. The second and erroneous order was for the stated reason that this court had on many occasions said that "merely suing for the price constitutes an election." See Keystone Mfg. Co. v. Cassellius,
The question presented is whether the commencement of an action by the seller to recover the purchase price, promised him absolutely by the buyer under a conditional sale contract, is, as an election of remedies, a bar to the subsequent exercise of the right of repossession, also unconditionally reserved, with the title, to the seller until all the purchase price is paid him.
The decision law generally, as well as locally, on that question is in a condition nothing short of a mess of irreconcilable contradiction. Some of its conclusions rest too much on mere assertion rather than reasoned argument. The digests and text books (see, for example, 12 A.L.R. 503; 56 A.L.R. 238; 55 C.J. 1269-1271; 24 R.C.L. 482-484) show the general condition. Locally, one runs into the fog in comparing Holmes v. Schnedler,
In the Flynn case,
As to its conventional subject matter, the name "conditional sales contract," while not altogether a misnomer, is misleading. The contract is unconditional in that both parties, seller and buyer, are bound absolutely. The only condition is that title shall not pass until all the purchase price is paid.
If the thing sold be real estate rather than chattels, no one calls the contract conditional. The usual contract for deed, similar in all respects save subject matter and the consequent need for a deed from vendor to vendee when the latter has fully performed, is never considered conditional. All such agreements are conditional only insofar as the intended result depends on full performance. As contracts, they are in fact absolute. They are executory only with nothing about them of the peculiar, difficult, or abstruse save as lawyers and judges make them so.
Put in their proper category of executory contracts, and they are nothing more, much if not all of the difficulty disappears that has arisen solely from the judicial creation of the anomalous category of "conditional sales contract." That characterization will be of utility rather than difficulty only as it is understood to embrace one sort of executory contracts for the sale of personal property, with nothing of condition not present in other contracts when full performance is postponed by the contract itself. *213
Much of the decision law tacitly ignores the basic fact that there is nothing illegal, and ordinarily none of the equivocal, about a conditional sales contract. The intention of the parties, therefore, as expressed in their words, which are but the voice of their purpose, should be effectuated. That purpose is plain. It is that the seller has an absolute right that each deferred payment be made as promised, and that until the whole price is paid the title will remain his. The promise of each payment is the absolute obligation of the buyer. If he pays voluntarily, it cannot affect the situation other than to reduce the unpaid purchase price. That being so, why should the seller's attempt by legal means to compel payment have any effect upon the existing contractual status? Why should an action for an instalment of the price, or an unpaid judgment for the same, have an effect upon the contractual status at the time being that does not attend payment of the debt sued for or evidenced by the judgment?
The contract is, not that the seller shall keep the title until he sues for the price or gets a judgment, but that it shall remain in him until he gets his money. Is it not then to defeat rather than effectuate plainly expressed contractual intention to decide that the seller's suit for the price or a piece of it transfers title to the buyer? It has been so held. Frisch v. Wells,
Returning to the analogy of executory contracts for the sale and conveyance of land, we hold that the vendor has his ordinary action on the contract for an unpaid instalment of the purchase price. Benjamin v. Savage,
Where is the inconsistency between the seller's action for the purchase price and his later attempt to repossess for nonpayment? Both rights are given him unconditionally by contract. Therefore, his demand for the money, however pressed legally, is wholly consistent with his claim to the title until the whole price is paid. That point being clear, as it must be upon any real examination of essentials, there disappears the element of inconsistency of remedies upon which all the cases opposed to our present holding proceed.
As Mr. Justice Holmes said in White v. Solomon,
"We are not to construe equities into the contract, but to carry it out as the parties were content to make it. If a man is willing to contract that he shall be liable for the whole value of a chattel before the title passes, there is nothing to prevent his doing so, and thereby binding himself to pay the whole sum."
If a creditor in the ordinary case has a lien to secure his debt, the invariable rule is that judgment for the debt does not merge or destroy the lien. John Hancock Mut. L. Ins. Co. v. Meester,
Perhaps many a decision has been motivated by the feeling that conditional sales contracts are harsh. So they are in some of their operations. But so long as we judges function in our proper sphere of adjudication and keep out of that of legislation, with which we have no official concern, it is not for us to attempt the creation of artificial remedies for the harshness. In this state the legislature has taken some notice of the situation by L. 1931, c. 339 (3 Mason Minn. St. 1936 Supp. §§ 8363-1 to 8363-5) giving the buyer a species of right of redemption as against the seller's remedy of repossession.
What we consider the correct conclusion is nowhere better expressed or more solidly buttressed than in Ratchford v. Cayuga County C. S. W. Co.
"The question depends for its answer upon the law of election of remedies. Where two inconsistent remedies, proceeding upon irreconcilable claims of right, are open to a suitor, the choice of one bars the other. But, to have that effect, the remedies must be inconsistent. We find no inconsistency here. The contract says that title is to remain unchanged till the price is paid in cash. The vendor had the right to receive the price, and brought an action to get it. The judgment preserves the obligation of the vendee's promise to make payment, but puts it in another form. There is no inconsistency between an attempt to get the money, and a reservation of title if the attempt is not successful. In asserting title the vendor does not treat the contract as void in its inception." *216
The New York court of appeals frankly recognized, as we do, the existence of much eminent authority disagreeing with its conclusion.
Feeling that the reasons above indicated, without more, are compelling, we leave the matter. The cases are collected at 12 A.L.R. 503; 56 A.L.R. 238; 55 C.J. 1269-1271; 24 R.C.L. 482-484. Necessarily, what we have said requires that Holmes v. Schnedler,
The order under review must be reversed with directions for reinstatement of the first decision below, that in favor of plaintiff.
So ordered.