Puffer Manufacturing Co. v. Dearman

Whiteield, O. The decision of this ease pivots upon the single legal inquiry whether the instrument in question evidences a conditional sale with a reservation of title as mere security for the debt, or a lease with all the incidents of a lease. There are several cases in our reports construing instruments, written in different terms, however, from the instrument here involved, as conditional sales, operating as mere security for the purchase price. See Ross-Mehan Co. v. Pascagoula Ice Co., 72 Miss. 615, 18 South. 364, and the authorities therein cited. But the instrument here is very radically different from the instruments construed in those cases. The case which controls this case is the case of Nobles v. McCarly, 61 Miss. 456. The instrument there was in the following words: “This agreement, made and entered into by and between W. A. Moore, agent for James Haley, of the first part, and R. F. Swilly, of tire second part, to-wit: The party of the second part agrees to pay W. A. Moore sixty dollars for the rent of a place known as the ‘Haley Place’ and now occupied by said Swilly, as rent for the year 1882, and one hundred dollars for each of the years 1883-4-5, this to be placed on Swilly’s note for six hundred dollars, due and payable one day after date, as a credit. It is agreed and understood this one hundred dollars for each year is to be collected as rent. Hpon the prompt and full payment of said note and interest on or before the 1st day of January, 1886, the party of the first part agrees and hereby [633] binds himself and his heirs to- make said Swilly a warranty deed -to said place. When the above amounts have been paid as agreed, then this bond to be void; otherwise to remain in full force. “[Signed] W. A. Moore.” And the court, in construing that instrument, said: “Our interpretation of the contract between Moore, as agent -of Haley and Swilly, is that the latter became a tenant, obliged to pay rent as stipulated, with the right to have the title to the land in fee on payment of the note for $600 and interest, and the rent he might pay was to go as credit on the- purchase money. There was nothing forbidden by law in this arrangement, and the relation of landlord and tenant existed between the parties.” The instrument in this case is in the following words: “Lease. ■“The Puffer Manufacturing Company, Manufacturers of Soda and Mineral Water Apparatus, Extracts and Supplies. “Boston, Mass., January 6th, 1908. “Know all men by these presents, that I, W. A. Dearman, of Purvis, state of Mississippi, have hired, leased and received of Puffer Manufacturing Co., a corporation duly established by law and having its usual place of business in the city of Boston, in the county of Suffolk, commonwealth of Massachusetts, for the term, to wit, five years, ten and 25/100 months, ending December 1, 1913, subject to the conditions herein stated, the following described chattels and goods: “One Constellation style soda and mineral water draft apparatus, numbered 396, consisting of Knolville and Italian marble dispensing counter with return, and II syrup jars and lifts, Onyx draft stand with four draft arms and light fixtures, work board and two sinks, 2 rubbish chutes, fruit board, fruit ■drawer, automatic tumbler washer, cracked ice basin and bottle rings, towel rail, corrugated drainers, 2 ice cream cabinets and packers, cooler box, coolers, leaders, pipes and all appurtenances [634] thereto, Back fixtures consisting of refrigerator base with wood superstructure and mirrors and light fixtures, marble refrigerator slab, one style four Faithful carbonatar numbered 13.54 with pump, cylinder, regulator, gauges, valves, pipes and connections, six wire chairs, manufactured by the said Puffer 'Manufacturing Co., and numbered as above; and I do promise and agree with the said Puffer Manufacturing Co., its representatives and assigns, to pay it or them for the possession and reasonable use thereof, for said term, the sum of one thousand seven hundred and seventy-five ($1,775.00) dollars, as rent, to be paid, fifty ($50.00) dollars cash, and the balance in the installments set forth in the several obligations given by me therefor as follows : [635] with interest from date hereof at the rate of six per cent, per annum, and until such payment shall keep the said goods and chattels insured against fire in the sum not less than one thous- and seven hundred and seventy-five dollars, in’ the name of the said Puffer Manufacturing Co., as owners, and for the-benefit of said Puffer Manufacturing Co., and the said W. A. Dearman. “And it is provided that the lessee will pay all tax assessed on this property. And i't is provided that said property hereby leased is not to be removed from the premises where now located, number 109 Maple street, in said Purvis, Mississippi, nor the interest of the lessee under the lease to- be transferred without the consent .of the said Puffer Manufacturing Co. in-writing thereto first obtained. And it is further provided that, upon full payment of the several obligations aforesaid, all claims- and title to said property on part of said Puffer Manufacturing Co., shall cease, and the whole title shall vest in the lessee as owner; but upon any breach of the provisions of this lease, especially upon failure by said lessee to pay the several obligations or either of them as they become due, and payable, then this lease, and any and all claim or right on the part of said lessee under the same, or to the further use and possession of said property, shall be hereby terminated at the option of the lessor, 'and the said Puffer Manufacturing Co., or its representatives, may thereafter at any time enter the premises where-said property may be and resume the possession of the same without any process of law or hindrance from the lessee, and such of the aforesaid obligations as mature after said Puffer Manufacturing Co., have resumed possession of said property shall be taken and held to be void and returned to the lessee-upon demand, but the obligations then due and unpaid shall’ remain in full force and effect. And it is mutually understood by both parties to the lease that said lessee has not the option636 of terminating this lease at his pleasure, but shall retain the said goods and chattels for the length of time specified, and pay all the said obligations as they mature. “Said obligations are not to be taken as a payment for said .goods and chattels under any law in any state, but only as evidence of the amount to- be paid in order that the lessee may •become owner of the property. “Witness my hand and seal this 26th day of February, 1908. “W. A. Dearman. [Seal.]” Each of the notes is in the following words, except as to dates, etc.: $33.35. . Boston, Mass., January 6th, 1908. “May 1, 1908, after date, I promise to pay to the Puffer Manufacturing Co., or order, thirty-three and 35/100 dollars, with interest at six per cent., 'as per a lease to me of certain goods of this date. Value received. Payable at -. [Bank No. 4,260.] “This obligation is not to- be taken as a payment of the property leased in connection hereAvith, under any laAV in any state, but only as evidence of a certain amount to be paid in order that the lessee may become OAvner of the property leased.' No. 1. Due May 1, 1909. W. A. Dearman. Address: Purvis, Miss.” Indorsed: “W. A. Dearman. May 1, 1908.” The appellant company has exhausted legal ingenuity in making this instrument express a contract of lease and nothing else. Having done so, the appellant must abide by the consequence -of the contract, Avhich he has thus carefully and expressly made a lease, and a lease only. This instrument must be held to be •a lease, and not a conditional sale. To hold otherwise would not be to construe the contract as actually made, but to make a new contract for the parties. This Ave cannot do. The appellant could not thus clearly and explicitly make a contract a [637] lease, and nothing else, and then, when the subject of the contract, a soda fountain, is destroyed by an accident never contemplated by the terms of the contract, to-wit, a cyclone, seek to change the contract from a lease to a conditional sale, and thus seek refuge, as in a storm pit, in a forced construction of it as a conditional sale, in order to escape loss which, as landlord, the appellant must bear. Per Curiam. The above opinion is adopted as the opinion of the court, and for the reasons therein indicated the judgment of the court below is ajjiryned.