Empire Drill Co. v. . Allison

MerriMON, J., (after stating the facts). The statute, (The Code, §1275), provides, that “all conditional sales of personal property, in which the title is retained by the bargainor, shall be reduced to writing, and registered in the same manner, for the same fees, and with the same legal effect, as is provided for chattel mortgages.” *553 Prior to the time when this statute became operative, “conditional sales” of persona] property, that is, sales, whether the contract of sale was reduced to writing or not, in which it was stipulated, that although the property agreed to he sold, was placed in the possession of the bargainee, and used by him, the title to the same should not pass to him, but should remain in, and be retained by, the bargainor, until the bargainee should pay the price agreed to be paid for it, were upheld in this State, as valid against all persons claiming under the bargainee, without registration. Such sales became frequent, and a public grievance. They were the source of much fraud, and many fraudulent practices. The bargainee having possession of the property, and being the apparent owner, easily obtained credit on the faith of it, and when it became necessary to resort to it to satisfy his just debts, he would take shelter behind the bargainor, who retained the title. To cure this evil, the statute cited was passed. The bargainor really retained the title to the property so sold by him, only as a security for the purchase money due him for it. The Legislature, therefore, deemed it just and salutary, that he should be required to reduce the contract of sale to writing, and register the same, just as creditors are required to do, who take the lien created by chattel mortgages. Brem v. Lockhart, 93 N. C., 191. The defendant insists that the agreement set forth in the complaint is, in substance and effect, a contract of conditional sale of the property in question, by the plaintiffs to Baker & Woods, therein named, and as it was not registered as the law required, the property was subject to be levied upon and sold as the property of J. B. Woods, who succeeded to the rights of the firm named. If this construction is well founded, the plaintiffs, it is conceded, cannot recover. The agreement is not skilfully worded, nor does it set forth clearly the precise purpose of the parties to it, but, in our judgment, it appears with reasonable certainty from its scope, tenor, several parts, and terms, that it was their purpose to constitute *554 the firm of Baker & Woods, the agents of the plaintiffs, to sell their drills within the territory specified. The mere recital in the agreement, that the plaintiffs “ bargained with the party of the second part, for the conditional sale” of the property mentioned, did not necessarily imply such sale. Whether there was or not, depended upon the nature and legal effect of the agreement as a whole. It is not sufficient to designate a contract by a certain name to give it a particular effect —it must contain constituent elements for the purpose intended, as well as the name — the former are essential, the name is not. The agreement does not, in terms, purport to convey the drills to Baker and Woods. The phrase, “have bargained with the party of the second part, for the conditional sale,” is awkward, and to ascertain its meaning, must be taken in connection with other provisions bearing upon it, and thus viewed, it implies sales made for the plaintiffs in the way prescribed. It is obvious, that the general purpose of the plaintiffs, was not to sell the drills to the firm, to be used by them for practical purposes, but to put them on the market within a designated territory. Hence, the drills were to be shipped to the firm “to be sold” — not to be used by them, and the absolute title was to pass to the purchaser, whether he paid cash at once, or gave his note for the purchase money. The firm were required to account to the plaintiffs for all proceeds of sales of the property, whether cash, or notes taken, and the notes were to be taken payable to the plaintiffs; and all the cash, notes and accounts were to be theirs. The firm were to receive commissions as agents, in a way specified, and to account to other like agents, if they should sell drills outside of the territory designated. It will be observed, that the firm were not required to pay for the drills shipped to them “to be sold,” they were only required to be guarantors of the notes they might take for the plaintiffs, and they might, in the discretion of the plaintiffs, in a contingency specified, be required to pay for a limited number of drills, *555 but these stipulations were plainly intended to secure caution aud industrious effort on the part of the firm, as agents. These, and other less important provisions and stipulations, determined the character of the agreement, and show that it was intended to, and did in legal effect, constitute Baker & Woods agents of the plaintiffs to sell the drills in controversy. The express reservation of title by the plaintiffs, in the ninth clause of the agreement, was cautionary, and intended to preclude the possible construction that a “conditional sale” to the firm was intended. The Court properly interpreted the agreement. There is no error in the record, and the judgment must be affirmed. No error. Affirmed.