Pelton Water Wheel Co. v. Oregon Iron Co.

Mr. Justice Bean delivered the opinion of the court. The court required the defendant to elect upon which of the defenses pleaded in its answer it woiild rely, and this is assigned as error. The defendant answered to the purport: (1) that the conditional vendee boug-ht the machinery on consignment from plaintiff; (2) that the conditional vendee as a matter of fact was not a vendee, but was an agent of plaintiff with the right to collect from the defendant; and (3) that the plaintiff made an outright sale without reservation to the conditional vendee. 1. The third defense is inconsistent with the first and second and it is manifest that all three defenses cannot be true. It was within the province of the trial court to require the defendant to elect upon which of the defenses it would rely. There was no error in so ruling. The main question contended for by counsel for defendant is that as a matter of law the Oregon Iron and Steel Company is not required to pay plaintiff any sum remaining unpaid on the turbine generator. At the close of the evidence defendant moved the court for a judgment of nonsuit and assigns the denial thereof as error. From a reading of all the evidence we are led to believe that the same tended to show the facts substantially as above stated and that the motion for a nonsuit was properly denied. . 2. It appears that the plaintiff manufactured the turbine generator according to plans and specifications and made a contract for sale thereof by which the title was to remain in the plaintiff until the same was paid for. The plaintiff owned the title to the machine and no legal title passed to the Engineering Company; therefore, no legal title thereto passed to the defendant. We do not consider that the question [253] of suretyship arises in the ease, hut rather that of ownership of the turbine in controversy. The original contract clearly and specifically reserves the title to the machine in plaintiff. Defendant approved the contract for the sale and hence must have known of the terms thereof at the time. Nothing has taken place since then to change the relation of the parties or the legal title to the property. 3. It is a fundamental doctrine of the common law that in general no one can transfer a better title to a chattel than he himself possesses: 1 Mechem on Sales, § 154. The universal and fundamental principle of our law is that no man can be divested of his property without his own consent and consequently even an honest purchaser under a defective title cannot hold against the true proprietor: Id., § 155. According to the general rule in order to pass the title to a chattel, as against the seller, there must be a valid, existing and completed contract of sale: 35 Cyc., p. 274. In the case of a so-called conditional sale, or contract to sell, where by the express terms of the agreement the possession of the chattel is to be delivered to the buyer, but the property in it is to remain in the seller until payment of the price, the title to the property does not pass to the buyer until the condition of payment is performed. And where the question is unaffected by statute, the buyer cannot pass title to another even to a bona fide purchaser for value. But although the .title to the property does not pass the buyer acquires a defeasible interest, which before breach of condition he may sell, and which upon performance of the condition becomes perfect. Such a second vendee acquires not only the right of possession and use, but the right to become the absolute owner upon complying with the terms of the contract: Tiffany on Sales, [254] pp. 135-138; 35 Cyc., p. 675 et seq.; Singer Mfg. Co. v. Graham, 8 Or. 17 (34 Am. Rep. 572); Schneider v. Lee, 33 Or. 578 (17 Pac. 269); Christenson v. Nelson, 38 Or. 473 (63 Pac. 648); Johnson v. Iankovetz, 57 Or. 24 (102 Pac. 799, 110 Pac. 398, 29 L. R. A. (N. S.) 709); McDaniel v. Chiaramonte, 61 Or. 403 (122 Pac. 33); Francis v. Bohart, 76 Or. 1-5 (143 Pac. 920, 147 Pac. 755, L. R. A. 1916A, 922); International Harvester Co. v. Bauer, 82 Or. 686 (162 Pac. 856); 1 Mechem on Sales, § 599. 4-7. The casé at hand is not like one where a manufacturer or wholesale dealer ships goods on consignment to a retail merchant to be sold in the ordinary course of trade and turn the proceeds over to the seller. The conditional sale under consideration was made on credit and the contract provided for renewals and extensions. According to the stipulations of the contract to sell quoted above the taking of the promissory note of the Engineering Company by plaintiff for the amount due would’ not be a payment unless so agreed and understood. The, leniency shown in extending the time for payment of the property did not constitute laches or tend to vest the legal title in the conditional vendee. The defendant argues that a conditional sale of property affixed to the realty is void as against a bona fide innocent third party. The burden of proving that the defendant was a bona fide purchaser was upon itself. In this respect the defendant company failed. There was evidence to support the finding of the trial court to the effect that the defendant was not an innocent purchaser, or without notice, and as such finding has the force and effect of the verdict of a jury it cannot be disturbed. In addition to this such claim is not specially pleaded and is not in consonance with the theory of the defendant’s [255] case as demonstrated by its pleading. From a legal standpoint the contract for the reservation of the title in plaintiff under the circumstances of this case would have great weight in determining whether or not the machine had been so attached to the realty as to become a part thereof, or was still a chattel: 1 Jones on Mtgs. (7 ed.), § 431. . The plaintiff acted in good faith in the transaction and concealed nothing from defendant. It seeks to recover only the balance unpaid. At the time the defendant had all the means of knowledge of the true conditions of the sale and title to the apparatus. Its magnanimity in paying the Engineering Company without ascertaining whether the contract which it had approved had been complied with, or taking indemnity from that company in the construction of its plant, if the latter was the case, should not work a hardship upon plaintiff or a forfeiture of its title to the machine: See Van Allen v. Francis, 123 Cal. 474, 478 (56 Pac. 340). The findings of the trial court were supported by competent evidence. Such findings support the judgment based thereon. We find no error in the record and the judgment is affirmed. Affirmed. Mr. Justice McCamant took no part in the consideration of this case.