Singer Manufacturing Co. v. Converse

Mr. Justice Campbell delivered the opinion of the court. The answer denies that the plaintiff is the owner, or enti [250] tied to the possession, of the machine in controversy. It also denies that the defendants had any knowledge or notice of the plaintiff’s claim thereto when they purchased. The answer, however, must be taken in its entirety. That the plaintiff was once the owner is admitted. The answer further admits that the plaintiff delivered the machine to Redd, and that upon such delivery she executed and delivered to the plaintiff the instrument in writing set out in the complaint. Upon its face this is a lease, and nothing else. But defendants say that the plaintiff did not sign the writing, and therefore the transaction between the plaintiff and Redd did not amount to a lease. Plaintiff’s signature was not essential thereto. It delivered the machine, and thereby performed its part of the contract, and the execution of the writing by Redd alone, and its delivery to the plaintiff, made the same a binding obligation upon her. If, then, this writing correctly evidences the transaction, it was a lease, and the lessee had no authority to sell, or convey title to, the leased property, even to a bona fide purchaser without notice of the lessor’s rights. But the answer further alleges that the transaction as set forth in the complaint was not a lease, but a conditional sale; and that the title did not pass to the conditional vendee until she paid the full purchase price. Nevertheless, the defendants say they are entitled to the property, because, without notice of this claim of the plaintiff, they bought the machine relying upon the indicia of ownership arising from the possession held by said vendee. Whether their claim concerning the nature of the transaction between plaintiff and Redd is based upon their construction of the writing denominated a “ lease,” or whether it is founded upon another and distinct agreement in terms constituting the transaction a sale, is somewhat difficult to determine if we take into consideration merely one or more separate allegations of the answer. But taking the pleading as a whole, and considering that it admits the delivery of the machine by plaintiff to Redd under the terms of the [251] so-called lease, and also alleges that if Redd failed to pay as stipulated the plaintiff is authorized to resume' possession according to the terms of that instrument, and that no claim is made that there was any transaction between the parties relating to the machine other than that evidenced by this writing, it seems that the former supposition is correct, and that the defendants themselves concede that this so-called lease measures the rights of the parties. This is further manifest from the argument of appellee’s counsel and the citation of authorities by them that such a transaction, though under the guise of a lease, is, in fact, a sale. If such be the basis for their claim, the judgment below is wrong, for such a construction of this writing is unwarranted, as there is nothing in its provisions, or on its face, that constitutes the transaction a conditional sale. On the assumption, however, that the sale was a conditional one under a distinct agreement therefor (which we think the answer does not sufficiently make apparent), we still think the court erred in overruling the demurrer. A demurrer admits only such facts as are well pleaded. The answer, it is true, denies that the defendants had any knowledge or notice of the plaintiff’s claim; but the answer, as has been said, must be taken as a whole. True it is that the defendants deny knowledge when their purchase was made; but they admit in their answer that Redd held the property as a conditional vendee with the title still in her vendor till the terms of the sale were complied with, and that such compliance was not had. While, therefore, they deny generally any knowledge by them of plaintiff’s claims of ownership, they specifically aver knowledge of the terms and conditions of the sale. These averments could not have been made had not the defendants known of the conditional sale and its terms. They failed to negative the fact that this knowledge existed when they bought; and while they aver knowledge of the sale and its terms, they apparently seek to escape the consequences thereof by alleging that assurances were given by the conditional ven [252] dee that she had complied with those terms. This they cannot do, for they had notice of facts sufficient to put them upon inquiry that would have resulted in their learning that the payments had not been made. Furthermore, in view of these facts, the allegations of general denial must be given no other or different effect than mere conclusions- of the pleader, and must yield to the other specific allegations of facts which we hold are equivalent to averments of notice. The case, then, is governed by the doctrine laid down in Jones v. Qlark, 20 Colo. 353, which holds that a conditional sale is good as against a purchaser with notice of its terms. We are asked by counsel for appellant in the case before us to establish the general rule said to be enunciated in Harkness v. Russell, 118 U. S. 663, referred to approvingly in the Jones Case, supra, that “in the absence of fraud, an agreement for a conditional sale is good and valid, as well against third persons as against the parties to the transaction,” whether the third persons be bona fide purchasers with or without notice. But as our construction of the answer is that the defendants have failed to show that they were without notice of the plaintiff’s claim, we rest our decision on the doctrine of the Jones Case. What we might say, therefore, as to the general rule contended for by the appellant would be obiter. It follows that the judgment of the district court should be reversed and the cause remanded, and it is so ordered. Reversed.