Scull v. Reiley

Opinion by Mr. Justice Drew, In this action in assumpsit, the learned court below, after having sustained the questions of law raised by the affidavit of defense in the nature of a demurrer, directed judgment to be entered in favor of defendant; and from the entry thereof plaintiffs have taken this appeal. From an examination of the statement of claim and the accompanying exhibits, it appears that on May 23, 1929, George R. Scull, Anna B. Scull and Robert S. Scull entered into an agreement whereby they rented, or conditionally sold, to Henry B. Reiley, defendant, the plant of the Somerset Herald, a weekly newspaper of general circulation, and the job printing business conducted in connection therewith, at a total rental or consideration of $30,000, of which $5,000 was paid upon *531 execution of the contract, and the balance agreed to be paid in annual instalments during the period of four years. On January 12, 1933, defendant being in default as to all instalments, with the exception of the initial payment of $5,000, the parties entered into a new contract, substantially in the same form as that of the original agreement, but superseding and in substitution therefor, whereby the property was relet, or conditionally resold, to defendant for the sum of $25,000, payable in annual instalments during the period of three years, and interest on the sum of $25,000 from May 23, 1929. On June 17, 1936, George E. Scull and Anna B. Scull having died and defendant having defaulted in the payment of all instalments and interest provided for in the second agreement, a third contract was executed by Eobert S. Scull and the representatives of George E. Scull and the heirs of Anna B. Scull. This latter agreement, being also intended as a novation for the prior contracts, provided for the reletting, or conditional reselling, of the property to defendant for the sum of $25,000, playable in instalments during a further period of three years from the date of this latter contract, as follows: the amount of $7,500 each for the first and second years, payable $625 per month, and $10,000 for the third year, payable $750 per month for the first ten months and $1,250 per month for the remainder of that year, and interest payable presently at the rate of 5% on the sum of $25,000 from May 23, 1929, the date of the original contract. This agreement, as well as the prior ones, contained, inter alia, a provision that title to the property was to remain in the lessors, or sellers, until the entire amount of the rental, or purchase price, and the additional sum of $1, was paid, at which time they agreed to execute and deliver to defendant a bill of sale for the property; and also provided that in case of default, the lessors, or sellers, had the right to repossess the property and to recover damages for any injury to it, together with any expenses *532 incurred by them in recovering possession, as well as the “rental”, which, under the express terms of the agreement, includes the interest on the sum of $25,000, to the time of repossession. Each agreement, when executed, was entered in the Conditional Sales Docket in the office of the Prothonotary of the Court of Common Pleas. On August 21, 1936, defendant having defaulted in the payment of the July and August instalments of $625 each, as well as in the interest due on the sum of $25,000, plaintiffs repossessed themselves of such part of the machinery and equipment pertaining to the business as remained of that which had been delivered to the defendant on May 23, 1929, and gave written notice to him that unless the property was redeemed within ten days, it would be sold at public sale and the defendant held responsible not only for the costs and expenses of retaking and sale of the property, but also for the balance of the “rental” due. The defendant did not redeem the property and it was sold at public sale for the sum of $10 to the highest bidder, the Somerset Trust Company, for the use of all plaintiffs. Thereafter the plaintiffs filed a statement of claim and defendant, without answering the averments thereof, filed an affidavit of defense raising questions of law. The learned court below sustained the questions so raised, on the ground that the statement of claim showed upon its face that the plaintiffs by repossessing the property availed themselves of an alternative remedy provided by the agreement, whereupon all rights of action thereunder determined as of the date of the exercise of such right. With this interpretation of the contract of June 17, 1936, we cannot concur. In determining this controversy we deem it needless to decide whether the contract of June 17, 1936, was intended as a lease or as a conditional sales agreement, since the principle of law involved is applicable whether it be one or the other. While it is well settled, as in *533 dicated by the cases cited by the learned court below, that where an agreement is drawn in the alternative and gives the lessor, or seller under a conditional sales contract, the right either to repossess the property upon default, or to collect the rental, or the unpaid purchase price, such lessor, or seller, can either collect the amount due under the terms of the agreement in affirmance thereof, or rescind the contract and repossess the property, but he cannot do both: Campbell etc. Co. v. Hickok, 140 Pa. 290, 296; Scott, to use, v. Hough, 151 Pa. 630, 634; Road Roller Co. v. Schlimme, 220 Pa. 413, 419; Star Drilling Mach. Co. v. Richards, 272 Pa. 383, 385; nevertheless, it is equally well established, as shown by other cases cited by the learned court below, that if it is plainly expressed in the contract, as was done in the instant case, or is a necessary implication from its terms that these remedies are cumulative, then the lessor, or seller under a conditional sales contract, can repossess the property, as well as collect the rental, or unpaid purchase price: Seanor & Bierer v. McLaughlin, 165 Pa. 150, 156; Ketcham v. Davis, 31 Pa. Superior Ct. 583, 585. In Rome S. & S. Station v. Finch, 120 Pa. Superior Ct. 402, the agreement provided in case of default for the repossession of a motor truck and also for the collection of the instalments of rental. There the court said (p. 407) : “The judgment in such event must be restricted to the instalments of rental due and unpaid at the time the plaintiff redelivered the truck in response to the owner’s demand.” Paragraph 5 of the agreement here under consideration provides: “It is agreed that if default shall be made by the Buyer at any time in the payment of any instalments of rent or interest . . ., the said tenancy shall forthwith cease and determine, at the option of the Sellers, and it shall be lawful for them to retake and repossess themselves of said property as though the same had never been rented. Upon any determination of this agreement, the Sellers shall have the right to *534 collect rental, at the rate hereinbefore agreed upon, up to the time of repossessing themselves of the property and to recover damages for any injury which may have been done to it, as well as for any expenses or costs incurred by them in recovering possession thereof.” (Italics added.) Under this clause of the contract, by which the rights of the parties are fixed and which is the law as to them, it is obvious that they have expressed, in as clear language as could be used, that the remedies in case of default were to be cumulative, and therefore, although plaintiffs have repossessed the property, they are still entitled to collect the “rental” due to the time of repossession, i. e., the two monthly instalments of $625 each, and the interest, on the sum of $25,000 at five per centum per annum from May 23, 1929, to June 17, 1936, the date of execution of the third contract, as well as interest on the two monthly instalments from the time each became due and payable to the date of retaking of the property. The obvious intent of the parties, ascertained from a careful study of the entire agreement, was that the agreed “rental” for the property was the sum of $25,000 (payable in monthly instalments) and interest on that amount from May 23,1929 (payable forthwith). Therefore, when, by paragraph 5 of the contract they provided that in case of default “Sellers shall have the right to collect rental ... up to the time of repossessing . . . of the property” (Italics added), they clearly and definitely expressed an intention for the collection of both sums which were due at the time of retaking; that is the interest on the sum of $25,000 from May 23, 1929, and for the two monthly instalments of $625 each. While the contract does provide for damages for any injury which may have been done to the property and for any expense incurred by the plaintiffs in recovering possession thereof, no such damages are recoverable, since there is no allegation whatever contained in the statement of claim that the property was damaged or *535 that plaintiffs suffered any expense in securing repossession. Furthermore, no recovery can be had for the loss alleged to have been suffered on account of the resale of the property after its repossession, since the contract does not so provide. For the reasons herein set forth, the assignment of error must be sustained. Judgment reversed, and record remitted for further proceedings consistent with this opinion.