Bankston v. Hill

Cook, J., delivered the opinion of the court. A. Hill and wife, appellees, purchased from Mr. Will Counts an automobile, and to evidence a part of the purchase price executed notes aggregating two thousand nine hundred and thirty-five dollars. The payment of these notes was secured by a deed of trust on forty acres of land belonging to the appellees, and also by a reservation in the notes of title to the automobile. These notes and the deed of trust were transferred and assigned to the appellant. Afterwards the appellant exhibited — 292 — her bill of complaint in the chancery court of the second district of Coahoma county, seeking a personal decree against the defendants for the balance due on these notes, and also seeking to foreclose the lien of the deed of trust, ■ and also to enforce the lien created by the reservation of title in the notes. The defendants answered the bill and made their answer a cross-bill, seeking the cancellation of the deed of trust. Upon the final hearing the chancellor entered a decree dismissing the bill of. complaint, and granting the relief prayed for in the cross-bill, and from this decree, this appeal was prosecuted. The facts disclosed by this record are substantially as follows: The appellees having failed to pay the notes, about the 1st of January, 1922, the appellant, accompanied by her husband, W. L. Bankston, went to the home of appellees and took the automobile and carried it to her home in Tunica, Miss. According to the testimony of W. L. Bankston he, acting as the agent of his wife, entered into an arrangement with appellees whereby he was to take the automobile, have it repaired, and sell it for the best price obtainable, and apply the pro-seeds of the sale on the indebtedness. The appellees denied that any such arrangement or agreement was entered into, and they testified that the automobile was taken from them without their consent and over their protest. The record shows by the testimony of both parties that there was no agreement that the automobile was to be taken in satisfaction of the debt, and both W. L. Bankston and A. Hill, one of the appellees,- testified that a few days after the automobile was taken by the appellant a conference about the matter was held in the city of Clarksdale, and that Bankston there endeavored to obtain a bill of sale to the automobile, but Hill refused to execute any such conveyance, and shortly there — 293 — after the appellant filed the bill of complaint in this cause. Prom the briefs of counsel it appears that they are in agreement that the only question presented for decision is whether the retaking of personal property without legal process discharges a debt incurred for the pur-' chase price of such property, where the property had been sold and title retained until the payment of the purchase price. There is ample authority in other states for the view that, if the seller of property to which title is retained takes hack the property, by so doing he rescinds the sale and cannot enforce the contractual obligation to pay the purchase money, for the reason that since the act of retaking is a rescission of the sale, there is no longer any consideration to uphold the promise to pay. In this state, however, the court has frequently had under consideration the rights of the parties under conditional sales contracts, and the effect of the recovery of the possession of the property, and the doctrine is thoroughly established in this state that where property is sold on condition the title shall not pass until all the purchase price has been paid, sucli reservation of title is merely security for the purchase price, and that, at any time after default, the seller may retake the property and deal with :t as security for the payment of the stipulated price and in reference to the equitable rights of the purchaser. In the case of Duke v. Shackleford, 56 Miss. 552, it was held that where personal property was sold and title reserved until the payment of the purchase price, the purchaser’s right of possession terminated when default was made in the payment of the stipulated price, and that the vendor could then recover the property from the vendee without offering to refund what had been paid, and, in commenting on this character of contract, the court said: — 294 — “It was not necessary that he should pay hack, or tender the money received as the cash payment. This is only necessary in cases of disaffirmance and rescission of a sale on condition subsequent. But this was a sale on condition precedent; that is, there was to be no sale, properly so called, no change of title, until the full price should be paid; and the law annexes to such a sale a right in the seller to recover possession of his property upon default made, even against subsequent bona-fide purchaser for value without notice. In reclaiming his propety, therefore, the seller is not rescinding the contract, but is enforcing it; and hence there is no obligation to tender back any thing.” In the case of Dederick v. Wolfe, 68 Miss. 500, 9 So. 350, 24 Am. St. Rep. 283, the court said: “The transaction was plainly a sale, with reservation of title as security for the price, and resorting to the press as means of security payment of the note was in pursuance of the contract, and did not preclude a recovery on the note. '. . . The title was retained by the seller for the very purpose of being made available to the payment of the money promised, and it would be a .strange result if the exercise of this undoubted right by the seller as stipulated for by the buyer, should preclude a recovery on the promise which by its terms was to admit of no defense. ... It would be a most unreasonable interpretation of the contract to hold that Dederick’s taking possession of the press was an abandonment of his claim to be paid what had been promised and not paid. There is no express provision to that effect, and to give such effect to(Dederick’s act is to cause a forfeiture of his right to be paid in full, at all events, as promised by the buyer, while the other view does justice to both parties, according to their contract, by allowing the seller what he was promised and the buyer what was purchased, and treating the press as it — 295 — was intended to be, as a security for tbe payment of the stipulated price. ’ ’ In the case of Foundry Company v. Pascagoula Ice Co., 72 Miss. 615, 18 So. 364, the court said: ‘ ‘ The right of the seller of personal property to make a conditional sale thereof, reserving title until payment of the purchase price, is too firmly settled in this state to admit of controversy. [Citing authorities.] But the reservation of the title is but as security for the purchase price, and, if the property is recovered by the seller, he must deal with it as security, and with reference to the equitable rights of the purchaser.” See, also, the cases of Burnley v. Tufts, 66 Miss. 48, 5 So. 627, 14 Am. St. Rep. 540; Tufts v. Stone, 70 Miss. 54, 11 So. 792; McPherson v. Lumber Co., 70 Miss. 649, 12 So. 857; and Rogers v. Whitehead, 127 Miss. 21, 89 So. 779. The appellees contend, however, that the ■ foregoing cases are not applicable to the facts in the case at bar, for the reason that in each of those cases the vendor recovered possession of the property by means of legal process, while in the present case the holder of the securities retook the property sold, over the objection and protest of the purchasers, and without any authority or legal process, and that her act in so doing was wrongful and amounted to a rescission of the contract. This view is not maintainable. The retaking of the property under the circumstances in evidence here did not constitute an election by the appellant to rescind the contract of sale. Upon default in the payment of the stipulated price the vendee’s right of possession terminated, and the vendor had the right to regain the possession of the property, not to convert it to her own use, but to deal with' it as security for the payment of the stipulated price and with due regard for the equitable rights of the vendees. After default on the part of the vendees, the .vendor had the right to demand possession — 296 — of the property, and the fact that she regained possession thereof without the aid of legal proceedings did not destroy her right to its possession, and did not alter her obligation to deal with it as security only. This she was attempting to do by filing her bill in the chancery court and seeking to have the property sold by a commissioner of the court and the proceeds applied to the payment of the indebtedness. The judgment of the court below dismissing the bill of complaint and decreeing a cancellation of the notes and deed of trust will therefore be reversed, and the cause remanded. Reversed and remanded.