Payne v. Parker

Eletcher, J., delivered the opinion of the court in response to the suggestion of error. The learned circuit judge gave a peremptory instruction to find for the appellee upon the following state of facts: One Little, late in thé year 1906, became Payne’s tenant, and moved upon his plantation. At the time Little owned two mules, upon which a third party held a trust deed for about $135. It appears that Mr. Payne had been advised by his attorney that personal property could be sold conditionally and the title thereto reserved to the vendor, and that the lien so reserved would be superior to any subsequent incumbrance by the conditional purchaser. Payne testifies that he acted in the transaction upon the idea that such an arrangement was a convenient, safe, and economical method of securing his debt, since it would obviate the need for recording fees and other expenses. Little was anxious for his landlord to take up the debt, and desired a fur [385] ther advance of $50 in cash. Thereupon Payne and Little entered into an agreement by 'which Little was to sell Payne the mules for $185 and Payne was to immediately resell the property to Little and reserve the title. This was done; the entire transaction resting in parol. Subsequently Little mortgaged the property to W. M. Thompson & Son by a trust deed, in which Parker is substituted trustee. The former trust deqd, which was paid by Payne, was satisfied, so that, when Thompson & Son took their security, no incumbrance against the property appeared of record. It is shown that Little, with Payne’s knowledge, obtained supplies from Thompson & Son throughout the year, and, indeed, Payne admits that he encouraged Little to buy from Thompson all the supplies he needed; that, to use his own phrase, he said to Little that “he missed it in not going and loading up on him.” ' We have no disposition to depart from the rule, now thoroughly established in this state, that personal property may be sold with verbal retention of title, and that the claim of the vendor to the purchase money will prevail over the claim of subsequent grantees. But we cannot hold as a matter of law that Payne ever actually owned the mules here in controversy. The whole transaction must be examined. The mules were not purchased from Payne in the first instance. They were bought from one Lawson. The sole purpose of the alleged sale to Payne was that title might momentarily vest in him for the purpose of an instantaneous resale, in order that the relation of the vendor and conditional purchaser might exist. The whole transaction might well be considered as nothing more than a verbal mortgage — an effort to substitute for a trust deed a pretended sale and resale, whereby innocent purchasers and incumbrancers would be defrauded. If this transaction is to be upheld, chattel mortgages will disappear. All borrowers upon personal property as security will simply agree with the lender to make a sale, accompanied by constructive delivery of the property, and buy the property back in the same transaction. [386] We bare here an illustration of a most flagrant wrong committed to tbe manifest injury of an innocent supply merchant. It is true that, under tbe previous decisions of this court, one taking a trust deed upon personal property must see to it that tbe person from whom tbe property was purchased has not reserved tbe title, or that be has been paid; but be cannot be defeated by constructive sales and resales, bad between persons who in reality sustain no other relation than that of creditor and debtor. We will not push tbe doctrine one inch further than it has already gone. In order for tbe seller to enforce bis claim, be must be in fact tbe owner of tbe property, and make a bona fide sale thereof to a bona fide purchaser, by which sale tbe actual possession of tbe property shall be in truth changed. Tbe peremptory instruction should have been given for tbe appellant, and not for tbe appellee. Tbe suggestion of error is sustained, tbe former judgment vacated, and tbe cause reversed and remanded. Reversed and remanded.