Butterick Publishing Co. v. Bailey

Granger, J. [331] — I. Noticing first the demurrer to the petition, appellant states the questions to be considered as follows; '“(1) Whether the contract set out [332] in the petition expresses or implies .a sale of goods to Mr. Bailey. (2) Whether any contingency has happened that renders Mr. Bailey liable to pay plaintiff any sum on account of the goods.” A significant feature of the contract is this: That throughout its provisions there are none that justify a conclusion that the patterns are to be taken by defendant, and sold, and the proceeds of the sales to be accounted for to the plaintiff. The agreement was that the defendant should act as special agent in the sale of the patterns; that plaintiff should furnish patterns to a certain amount, and defendant should pay for them one-half in a specified time, and receive a standing credit for the other half, which credit was to bear interest. The meaning of the contract is that defendant should be the agent to sell patterns furnished by plaintiff, he (defendant) to pay for the same, and sell on his own account. While the parties, for certain purposes, treat the relationship as that of principal and agent, the obligations under the contract depend upon its conditions and terms. As we read the contract, patterns furnished by plaintiff, and paid for under the terms of the contract, passed entirely from the right or control of plaintiff, so that it could have no claim thereto, absolute or contingent. The right of return was optional with defendant. While, in the part of the contract providing for its termination, it is stated that when the notice is given all patterns held by party of the second part shall be returned to party of first part, the entire provision on the subject shows that, while plaintiff must receive and pay for them, when properly returned, defendant’s neglect or refusal to return them gave to' plaintiff no right except exemption from paying therefor under the stipulation for a return. There is what is called a contract “on sale or return,” which Judge Story defines as an “agreement by which [333] goods are delivered by a wholesale dealer to a retail dealer to be paid for at a certain rate, if sold by the latter; and, if not sold, to be returned.” Story, Sales, section 249. See 21 Am. & Eng. Enc. Law, 518, and authorities cited. It is thought by appellee that the transaction comes within such a rule, but we think its conditions are different, and indicate more conclusively a sale to the defendant. Except in view of a termination of the contract, there is no right of return in this case, as in the cases contemplated by the rule as to contracts on sale or return; but the contract merely gives the right to return old patterns in exchange for new ones, and the patterns so returned for exchange are designated as “patterns purchased under this agreement.” It is also provided that patterns so returned “shall not be returnable in payment for goods ordered prior to the time of return-.” This provision is significant, and means that patterns of a particular purchase are not returnable in payment of that purchase, but, when returned, they must be exchanged for other patterns. The provision for return in case of a termination of the contract is simply one of a re-purchase by paying a specified sum therefor, and not as a return of property belonging to the plaintiff. This thought has strong support in language used in Warder v. Hoover, 51 Iowa, 491. Parmalee & Hurd received from Warder, Mitchell. & Co. certain “extras” to be sold on commission, with the right to return them if unsold; but they were required to pay for them on delivery In the opinion it is said: “Where the agreement is that goods are to be paid for in cash on delivery, and the goods are delivered, it appears to us-that there is a sale, whether the payment is made or not. The condition, as in this case, that they may be returned if not sold, is a condition that the sellers will re-purchase.” This case is even stronger in support of the transaction being a sale, [334] for there was not only to be a payment for the patterns, but there was no right of return merely because there was no sale. There is nO' right of return in this case except for exchange, only upon a termination of the contract, and then to be paid for by the plaintiff. We think the conclusion that the transaction was a sale is not to be avoided. If there was a sale, the answer to appellant’s second query, whether there is a contingency that renders defendant liable, is, that his acknowledged breach of the contract renders him liable for the credit extended him under the contract; that is, to pay the balance of the purchase price of the patterns received. 2 II. The answer to the petition admits the contract, and that he received the patterns, paying thereon one hundred and fifty dollars, and received credit of one hundred and fifty dollars, as- provided in the contract. It is then alleged that in October, 1894, without fault on Iris part, the stock of patterns was accidentally destroyed by fire, because of which the patterns were not returned. By way of counterclaim the answer pleads the advance payment of the one hundred and fifty dollars, and seeks to recover the seventy-five per cent, thereof to which he would be entitled if he returned the patterns under the contract. A demurrer to both the answer and counterclaim was sustained, and the correctness of the ruling is now for consideration. On this branch of the case reliance seems to be placed on the fact of the destruction of the patterns by fire, so they could not be returned; and the rule is invoked that, where property is taken under an agreement to re-deliver it, and i-t is destroyed without the fault of the one taking it, he is absolved from his obligation; as where one who charters a vessel under an agreement to return it, and it is destroyed without his fault, he is excused from his obligation. Young v. [335] Leary, 135 N. Y. 569 (32 N. E. Rep. 607). See, also, Seevers v. Gabel, 94 Iowa, 75, and Norton & Co. v. Melick, 97 Iowa, 564. This case is far from being in line with those quoted, or applicable to the rule invoked by appellant. In the last-cited case the ownership of the property was reserved to the company with right of possession, and the contract was held to be one of agency. Seevers v. Gabel is a case where property was leased, and presents no such question as this case. Our consideration of the demurrer to the petition practically disposes of this branch of the case. Defendant purchased and owned the patterns. The plaintiff, under certain conditions, was obligated to exchange other patterns for them, and, under certain conditions, tó accept and pay a certain price for them. It is nowhere provided that defendant’s misfortune in the loss of them should create any liability on the part of plaintiff. The judgment will stand affirmed.