Herring-Marvin Co. v. Smith

Mr. Justice Wolverton, after stating the facts in the foregoing terms, delivered the opinion. The sufficiency of the complaint is challenged by objections to the introduction of evidence intended to establish defendant’s liability. It is unnecessary to take note of the demurrer, as the act of answering over brings us to this point, and the complaint must be tested by its sufficiency after verdict. 1. The first criticism is that the contract sued on, as shown by the complaint, is not a contract with the plaintiff, but with the Hall’s Safe & Lock Works, a different and distinct concern. There was a tendency in the evidence, however, to show that plaintiff, or the corporation designated as the Herring-Hall-Marvin Company, is the parent concern, and that Hall’s Safe & Lock Works is the name given to a sort of repair shop located at San Francisco, which is but a branch of the plaintiff’s, without separate organization, and that the order was given to the plaintiff in the name of the latter. This fact, if it be such, which was a matter for the jury to determine, might have been stated more explicitly in the complaint, and, being — 319 — so stated, it would undoubtedly contain a good cause of action in favor of the plaintiff. But there is an allegation that defendant made, executed, and delivered the instrument to plaintiff, which, by taking note of the manner in which it is addressed, is inferentially an allegation that the Hall’s Safe & Lock Works is the same organization as the plaintiff, and we think is sufficient after answer. 2. The question of larger moment is whether the contract is one of leasing or a sale. The court treated it as a conditional sale, and the trial was conducted upon that theory. In this the defendant assigns error. If a lease, no title to the property passed to the defendant, and plaintiff pursued an inapt procedure in causing it to be attached and procuring an order in the judgment for its sale. If a sale, we have incidentally to determine whether plaintiff has adopted an appropriate form of action under its theory of the case. It is of but little consequence what name may be given to the paper, whether lease or sale. Its real character is to be determined by the legal effect of its conditions, that is, the ruling or prevailing intention of the parties, to be gathered from the language employed. The form of the instrument is not controlling. There is a direct undertaking on the part of the defendant to pay to the order of the plaintiff $321, denominated “rent,” in six equal payments of thirty days each. At the expiration of the time, if the monthly rent has been paid, the company agrees for $1 to sell; but it is further provided that, if any month’s rent shall remain unpaid for thirty days after it becomes due, the company may retake possession, retain the rent paid, and terminate the lease, and that the defendant shall thenceforth have no claim on the company or safe; that the defendant shall keep the property insured for its value at his own expense, and in the event of fire the contract shall be a lien upon the policy for the amount — 320 — that may at the time be due, and shall .pay interest upon all deferred payments. Now, if a lease, why is there a definite sum named to be paid eventually, and why is it stipulated that when said sum is paid a sale will be made for the nominal sum of $1? A leasing can be accomplished by much less indirection than this. Again, if a lease, why the stipulation that if any rent shall remain unpaid for thirty days the company may retake possession, retain the rent, and terminate the lease, and that thereafter the defendant shall have no claim upon the company or the safe ? In an ordinaryleasing, and one suggested by direct business methods, the rent is a consideration that belongs to the lessor as of course, and no stipulation that he may retain it is necessary. Nor was there the least necessity for the provision that defendant should thenceforth have no claim upon the property. And, further, a lessee ordinarily can have no insurable interest in the subject of the lease, as he has absolutely no property therein. This contract, however, treats him as acquiring an interest in proportion as the amount paid stands to that agreed to be paid. These provisions are wholly inconsistent with the idea of a lease, but of themselves, and especially when read in connection with the other stipulations entered into by the parties with reference to the subject of their dealings, clearly manifest an intention to effect a sale, not absolute and irrevocable, but conditional, the vendor giving possession, but reserving the title until the consideration or purchase price is fully paid. Nor can the terms “rent,” “monthly rent,” and “lease” operate to mask the purpose, and make the contract anything else than such as the real and true intendment of the parties has made it. This view is not one of first impression with this court. In Singer Mfg. Co. v. Graham, 8 Or. 17 (34 Am. Rep. 572), the company, through its agent, took from one Morgan what purported on its — 321 — face to be a contract of hiring or leasing of a sewing machine, at $10 per month, but stipulated with Morgan that when $65, the value of the machine, was paid, it should belong to the latter. Speaking of this contract, the court, through Mr. Chief Justice Kelly, said: “It was only a conditional sale, accompanied by the possession, which Morgan was permitted to retain until the condition was broken.” Other contracts of a similar nature have been so construed by this court: Rosendorf v. Baker, 8 Or. 240; Schneider v. Lee, 33 Or. 578 (17 Pac. 269). Authorities elsewhere are abundant in support of this construction: Quinn v. Parke & Lacy Mach. Co. 5 Wash. 276 (31 Pac. 866); Loomis v. Bragg, 50 Conn. 228 (47 Am. Rep. 638); Hine v. Roberts, 48 Conn. 267 (40 Am. Rep. 170); Singer Mfg. Co. v. Cole, 4 Lea, 439 (40 Am. Rep. 20); Sumner v. Gottey, 71 Mo. 121; Singer Sewing Mach. Co. v. Holcomb, 40 Iowa, 33; Murch v. Wright, 46 Ill. 487 (95 Am. Dec. 455); Lucas v. Campbell, 88 Ill. 447. We hold, therefore, that the trial court was not in error in treating the contract in controversy as a conditional sale, but it was in its nature executory until performance. 3. Now, as to the'form of the action brought in the case at bar. The common, and perhaps the most natural, remedy of the seller upon default, is to declare the buyer’s right under the contract forfeited, and take proceedings to recover the property. But this is not the only remedy. Where a party has agreed to purchase and pay for the property, and has or is entitled to possession until default, the seller may have choice of one of four distinct remedies, among which he may waive a return of the property, treat the contract as executed on his part, and recover from the buyer the agreed price : 1 Mechem, Sales, §§ 613-615, 619 ; Bailey v. Hervey, 135 Mass. 172; McRea v. Merrifteld, 48 Ark. 160 (2 S. W. 780); Smith v. Barber, 153 Ind. 322 (53 N. E. 1014). This disposes of counsel’s first proposition. IS Or. — 21. — 322 — 4. The second pertains to defendant’s motion for a non-suit. In this three contentions are made, of which we will examine two. It is argued: First, that there is no proof of plaintiff’s organization under the laws of California. The complaint shows an allegation of incorporation in New Jersey. The answer is a denial of plaintiff’s organization in California. The organization in New Jersey is therefore admitted. 5. It is argued: Second, that there was no proof of a delivery of the safe on board a car at La Grande. Plaintiff’s testimony shows that the safe was shipped from Hamilton, Ohio, on June 5, 1901, and that defendant countermanded his order or contract by wire on June 12th. According to an allegation in the complaint, the safe arrived in La Grande, Oregon, on June 20th, so that by plaintiff’s own showing there was a countermand of the order before the arrival of the safe at its destination, and the question is whether the testimony will support the cause of action presented by the complaint. Where a contract is executory, a party has the power, if he choose, to interdict performance by an explicit direction to that effect, and in such case he subjects himself to an action sounding in damages for a breach of the contract, and none will lie on the contract itself as for sale and delivery: 2 Mechem, Sales, §§ 1091, 1092 ; Unexcelled Fire - Work Co. v. Polites, 130 Pa. 536 (18 Atl. 1058, 17 Am. St. Rep. 788); Collins v. Delaporte, 115 Mass. 159; Butler v. Butler, 77 N. Y. 472 (33 Am. Rep. 648); Moline Scale Co. v. Beed, 52 Iowa, 307 (3 N. W. 96, 35 Am. Rep. 272); Danforth v. Walker, 37 Vt. 239, 40 Vt. 257; Clark v. Marsiglia, 1 Denio, 317 (43 Am. Dec. 670); Gibbons v. Bente, 51 Minn. 499 (53 N. W. 756, 22 L. R. A. 80). 6. There is a stipulation in the contract “for safe de- • livery on cars at La Grande.” The trial court was of the opinion, however, that, from a survey of the whole instru — 323 — ment, a delivery to defendant ivas effected by delivery to the carrier at Hamilton, Ohio, to be shipped to defendant at La Grande, and that the contract became executed so far as the plaintiff was concerned; hence that he was entitled to recover under the-action as brought. We cannot accede to this construction. The writing directs the plaintiff to ship “via best route,” it is true, but plaintiff necessarily had to pay the freight in the first instance, for defendant’s undertaking is to pay freight on arrival, not to the carrier, but to plaintiff, and the undertaking is “for safe delivery on cars at La Grande,” thus indicating plaintiff’s responsibility for safe transportation of the property to destination. All this goes to show unmistakably that the carrier became the agent of .the plaintiff, and not of the defendant, and that a delivery could not be effected until the plaintiff had fully performed by having the safe on the car at La Grande. Mr. 'Benjamin says: “Where the vendor is bound to send the goods to the purchaser, the rule is well estabished * * that delivery to a common carrier, a fortiori, to one specially designated by the purchaser, is a delivery to the purchaser himself; the carrier being, in contemplation of law in such cases, the bailee of the person to whom, not by whom, the goods are sent; the latter, when employing the carrier, being regarded as the agent of the former for that purpose. If, however, the vendor should sell goods, undertaking to make the delivery himself at a distant place, thus assuming the risks of the carriage, the carrier is the vendor’s agent”: Benjamin, Sales (7 ed.), § 693. This doctrine finds supportin 21 Am. &Eng. Ency. Law (1 ed.), 528-530; Dunlop v. Lambert, C. & F. R. *600; Devine v. Edwards, 101 Ill. 138; Murray v. Nichols Mfg. Co. (City Ct. N. Y.) 11 N. Y. Supp. 734; Miller v. Sumerset C. P. & Lum. Co. 21 Ky. Law Rep. 424 (51 S. W. 615). No delivery of the safe was had, therefore, prior to defendant’s countermand or renunciation of the order or con — 324 — tract. While a delivery had been made by plaintiff to the carrier before the countermand, it was only a delivery to its own agent to cany out its undertaking to deliver on a car at La Grande, and the contract was still in an executory state and unfulfilled, so far as it was concerned, leaving the defendant free to interdict further performance. Plaintiff’s action, therefore, could not be for the purchase price, but only for special damages for a refusal to receive •the safe on its arrival on the car at La Grande. The complaint not having been drawn nor the action prosecuted upon this basis, the nonsuit should have been allowed. The judgment of this court will be, therefore, that the judgment of the trial court be reversed and the cause remanded, with directions to allow th.e nonsuit. Reversed.