Orenstein-Arthur Koppel Co. v. Martin
Orenstein-Arthur Koppel Co. v. Martin
Opinion of the Court
To a judgment in favor of plaintiff for a part only of the property sued for, and nominal damages for its detention, plaintiff was awarded this writ of error. The action is brought to recover possession of 10 two-yard dump cars, 12 four-yard dump cars and 1 Porter dinkey steam locomotive,, sold by plaintiff to defendant Martin on conditional sales contracts.
The alleged error, chiefly complained of, is the court’s directing a verdict for defendant, as to the. 12 four-yard dump cars and engine. Pending the action said Martin was ad
That Martin was adjudged a bankrupt August 7, 1913, and was discharged December 23, 1913, is proven by the record. At the beginning of its suit plaintiff gave bond with security, and required the sheriff to take the property .into his possession; and shortly thereafter the Fidelity & Deposit Company, which was surety for Martin on his construction bond, gave counter bond, and was permitted to retain possession of the 12 four-yard dump cars and locomotive engine. It did not claim the 10 two-yard dump cars. A verdict was found for defendants as to the 12 four-yard cars and engine, and for the plaintiff as to the 10 two-yard cars, on plaintiff’s evidence only, and according to a peremptory instruction by the court; defendant offered no testimony.
In June, 1912, plaintiff, a corporation, doing business in Koppel, Pa., conditionally sold to defendant R. T. Martin, who was then engaged in railroad construction work in Harrison county, W. Va., 12 two-yard dump ears, at the price of $1,466.00, reserving title to itself until they were fully paid for, and took Martin’s notes therefor, payable as follows: $300 on. August 20th, $500 on September 20th, $500 on October 20th, and $166 on November 20th, all in 1912. Finding the ears too small for his purpose, said Martin, in September, 1912, bought from plaintiff 12 four-yard dump cars and 1 dinky locomotive engine, likewise on condition that the title should remain in plaintiff until the purchase price was fully paid. Upon his failure to make- any of the deferred payments, it was expressly stipulated that plaintiff should have
The chief complaint is against the court’s instruction. The court apparently gave it on the theory that the two-yard dump cars were a part of the consideration for the 12 four-yard cars and engine, and that plaintiff had no right to recover both lots of ears; that it was pursuing, in one suit, inconsistent remedies; that, under the conditional sales contract,
But we are not here called upon to determine whether or not the principle announced by the above decisions is the rule of law in this State; there are a few cases apparently holding ,a contrary doctrine. But they seem to be confined to jurisdictions in which conditional sales contracts are regarded in their nature as chattel mortgages. This court has not so regarded them. McGinnis v. Savage, 29 W. Va. 362; and D. H. Baldwin & Co. v. Van Wagner, 33 W. Va. 293. Assuming, therefore, but not deciding that' election of remedies is applicable to conditional sales, and that the pursuit of one remedy is the waiver of another, still the facts proven do not warrant the application of the rule to the case in hand.
Default was made in payment of the note for $694, payable on December 23,1912, at the Empire National Bank of Clarks-burg, W. Va. It had been forwarded by the Bank of Pitts-burg, Pa., to the Empire National Bank of Clarksburg, and was there protested. It is insisted that, by indorsing this note to the Bank of Pittsburg, plaintiff elected to pursue its remedy to collect the purchase price, and is thereby estopped to recover the property. Winton Motor Carriage Co. v. Broadway Automobile Co., 65 Wash. 650, 37 L. R. A. (N. S.) 71, is relied on to support this contention. In that case, as in this, the note was not paid and had to be taken up by the obligee. The court there held that, by the transfer of the note, the. vendor had elected to treat the title to the property as having passed to the vendee. But there the note represented all that was remaining of the purchase price; whereas, in the present case, there were two notes yet remaining in the hands of plaintiff: So that, even if it were conceded that the case cited correctly propounds the law, (which we do ’not, because it is not necessary to a decision of this case), still it would not be controlling here: The transfer, or even collection by suit, of one or more of the notes is not inconsistent with plaintiff’s retention of title as long as he holds any of them. Voluntary payment of all but the last note would not defeat plaintiff’s title until “the full purchase price” was paid. Haynes v. Temple, 198 Mass. 372. In that case there was a conditional sale of horses at the price of $400, for which the purchaser executed his three notes as follows: $200 payable in one month, $100 in two months and $100 in three months, and the horses were then delivered to him. He defaulted in payment of the first two notes, and
Whether or not the unpaid notes should have been tendered to defendant, as a condition precedent to plaintiff’s right to recover the property, is not raised by the pleadings or discussed in briefs of counsel. But, ,as the case is to 'be remanded for a new trial, the question is pertinent. Plaintiff, having elected to retake the property, it follows that defendant is not thereafter liable for the unpaid portion of the purchase money. The authorities so hold, although they are not harmonious in their reasoning. 1 Mechem on Sales, sec. 620. A sufficient reason would seem to be that the reclamation of the property destroys the consideration for the promise to pay, and renders it a nudum pactum. Martin had expressly agreed that, in case of default in payment, he would forfeit whatever amount he had paid, but he was not bound to pay* any notes unpaid at the time of the recaption of the property. On the question, whether a surrender of the unpaid notes is a condition precedent to recovery of the property, there is a dearth of authority. The United States Supreme Court, in Segrist v. Crabtree, 131 U. S. 287, sustaining a charge given by the lower court to the jury to that effect, seems to hold in the affirmative. There nothing appears to have been paid; notes were executed for the entire purchase price of the cattle and horses, and the purchaser defaulted in their payment. The terms of the contract were disputed, and the question, whether the notes were given and accepted as absolute pay
The judgment is reversed, the verdict set aside and the ease remanded for a new trial.
Concurring Opinion
(concurring):
Judges Lynch and Mason and I are firmly of the opinion that, under a contract of the character of the one here involved, surrender of the unpaid notes, or indemnity against liability thereon, if the vendor has negotiated them, is a condition precedent to recovery of the property by judicial process, after default in payment. This view is predicated on our interpretation of the contract as to the intent of the parties, and not on any rule of law or result of legal process. As to rights respecting the unpaid notes the contract is silent. It does not say in terms, whether, after recaption of the property, there shall be any liability on them or not. Here, as in other cases of uncertainty as to intent and purpose respecting a particular, limited and subordinate phase or feature of a contract, it is necessary to consider the general scope and purpose thereof, the situation of the parties and all the circumstances, as well as the reason, equity and fairness of the results. Could it have been the intention of the purchaser that, in the event of failure to pay an installment of the purchase money and consequent loss of the property, he should be required to pay the remaining installments? The inequity of such a result constrains the courts generally to answer in the negative, and to relieve on the ground of failure of consideration. It is just as easy to say there is no liability because the parties never intended it, and no legal rule inhibits adoption of that view. We regard the contract as one providing for a qualified or partial rescission, at the option of the vendor, in ease of default in payment. Under the
This conclusion harmonizes too with a well settled rule of eontsruction. On default, there is right to terminate the contract by a forfeiture clause. That clause forfeits, in terms, only the payments actually made. It does not say the vendee shall lose, in addition to the money actually paid, the sums represented by the .unpaid notes, or any part thereof. Forfeiture clauses are always strictly construed and confined, in their operation and scope, to the letter thereof. Nothing is ,ever added by way of mere intendment. Elliott on Contracts, sec 4111. To say the vendor may hold the notes after recovery of the property and not be able to enforce payment thereof, is to state a contradictory proposition, which, to a mind not versed in legal technicality, would be absurd. And its plausability rests altogether 'upon the theory of a supposed legal rule or principle which makes the parties assent to something by way of forfeiture, that they have not expressed. The contract says nothing about remedies, procedure or legal rules or principles. None of them can be made a part of it otherwise than by addition to its terms, on-the assumption of intention to adopt them.
Contracts are to be so construed as to make them operate justly and equitably, when their terms will permit such an analysis ,and application, and always so as to avoid absurdities and inequitable results, when that can be done without violation of the terms or departure therefrom. Negotiable notes given under a contract of this kind and held by bona fide purchasers thereof, would have to be paid by the maker, and, if he would then have right of recourse upon the vendor,
Reversed1 cm id remanded for new trial.
Reference
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- Orenstein-Arthur Koppel Co. v. Martins.
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