Excelsior Iron Works v. Lee

Grant, J. (after stating the facts; dissenting). Plaintiff’s counsel insist that the contract of sale between it and Mayo on condition that the title remain in plaintiff until the purchase price is paid is binding upon the defendants. They cite authorities from this and Other courts sustaining conditional sales. These decisions are numerous, and need not be cited. The principle is well settled. No prior decision in this court involves facts similar to those of the present case. In former decisions the property had been purchased for use by the vendee under contracts by which he had no authority or right to sell the property. There was always an implied, if not an expressed, agreement that the vendee retain possession. Such are cases of organs, pianos, engines, boilers, reapers, and mowers, and all kinds of machinery designed, intended, and understood to be for the sole and personal use of the vendee until paid for. Ought this rule to be extended to include merchants and manufacturers who sell their merchandise and products to other dealers, who purchase them for the sole purpose of resale ? If it be so held, then no person is safe in buying goods or machinery from retail merchants .and dealers, for he may have his property taken away from him by the wholesale merchants and manufacturers who sold to the retailers. Such a rule finds no support in justice or law. By the contract between plaintiff and Mayo it was expressly understood that Mayo could sell the machines,— that he was to sell them as his own,— and consequently was authorized to receive the purchase price. Plaintiff knew at the time of its contract with Mayo that Mayo had already contracted to sell the machine to the defendants under a contract which, upon its face, showed the right of Mayo 'to sell. If plaintiff fiesired to protect itself from Mayo through the defendants, it should have notified them as soon as it had knowledge of the contract. It had such knowledge at the time the contract was executed. It is now estopped to assert that Mayo had no authority to sell the machine as his own, to receive payment there [504] for, and to assert as a defense the conditional sale to Mayo. The letter of July 26th contained no direction to defendants not to pay Mayo. The reasonable construction to be placed upon that letter is that plaintiff was seeking to protect itself, not as against Mayo, but as against the defendants. Besides, plaintiff could not thus change the terms of their contract with Mayo, unless all parties assented to it. Defendants refused their assent, and insisted upon their contract with Mayo. The judgment should be affirmed. Montgomery, C. J. The contract was clearly good as between the plaintiff and Mayo. In what way has the plaintiff estopped itself to assert it as against defendants ? If we assume that a manufacturer may estop himself from relying upon a reservation of title to property placed in the hands of a middleman, who is expected to make sale of it to purchasers in open market, the question remains whether the facts here will show such a case. When the contract between Mayo and defendants was entered into, the plaintiff was under no obligation to furnish Mayo the machine in question. It was competent for it to contract to furnish such a machine on such terms as were embodied in the contract of April 7th, provided that the plaintiff did no act, and was guilty of no omission, which might mislead defendants. Doubtless, if the plaintiff had permitted Mayo to deal with the machine as his own, it would be estopped. Did it do so? The answer to this question depends upon the construction which we give to the letter to defendants written July 26th. I can discover no ambiguity in 'this letter. Starting out with the understanding that the contract of purchase made by defendants was with Mayo alone, and that such contract contained no reservation of title, the letter is plain. It states that at “the request of Mayo” plaintiff will ship the machine, but adds, “We beg to inform you that this machine is the property of the Excelsior Iron Works until fully paid for; the terms of payment being thirty, sixty, and ninety days [505] from date of shipment.” It was known to defendants that this statement did not accord with the- contract which defendants had made — First, their contract was with Mayo; .second, there was in that contract no reservation of title; and, third, the terms of payment were not those agreed upon with Mayo. It is difficult to see how noticé of plaintiff’s rights could be more plainly stated. The judgment is reversed, and judgment entered for plaintiff. Hooker, Moore, and Long, JJ., concurred with Montgomery, C. J.