Wadleigh v. Buckingham

Cole, C. J. These are cross-appeals from the same judgment. The appeal of the defendant below will be. first considered. The action is replevin, and the plaintiff’s right to recover the property in controversy depends upon the written agreement entered into between him and A. P. Yaughn & Co., the defendant’s assignors, dated December 27,1887. Is that agreement a conditional sale of the lumber therein mentioned, or is it in the nature of a chattel mortgage? The learned counsel for the assignee contends that it is a chattel mortgage, and void as to the creditors of A. P. Yaughn & Co. There is some language in the contract which favors this contention, but, when all the provisions of the instrument are regarded, it is very plain that it is a conditional sale and delivery, and nothing else. On its face it does hot profess to be a mortgage. In the first clause the vendor, in consideration of the agreements and covenants of the vendees thereinafter contained, “ has and hereby does, sell and convey, and hereby and by the symbol of the delivery of this contract doth deliver, to” the vendees all those certain piles of lumber described, etc. In the second clause in the agreement it is provided that the lumber “ is at the sole and exclusive risk of the vendees, and any loss thereof, or damages of any kind thereto, shall be borne by them.” The third clause relates to the amount and manner of payments to be made by the vendees for the lumber. Then comes this clause: “ It is further expressly agreed by and between the parties hereto that the title and right of possession of the said lumber hereinbefore mentioned shall be and remain in the said party of the first part [the vendor] until the entire amount due from said second party [the vendees] under the contract shall be fully paid.” This clause shows that the contract was an agreement to sell the lumber upon a condition to be performed, and was not an absolute sale so as to pass title. The title and possession were to remain in the vendor until the purchase price was — 236 — fully paid. There is nothing inconsistent with or repugnant to that intention expressed in the contract. In the absence of fraud, an agreement for a conditional sale of personal property, accompanied by delivery sub modo, is valid as well against third parties as ■ against the parties to the transaction. The statute expressly makes such a contract valid when signed by the parties and filed in the proper office, as this contract was. Sec. 2317, R. S. The statute is founded upon the principle that the compliance with the conditions of the sale and delivery is a precedent condition to the transfer of the property from the vendor to the vendee. See Harkness v. Russell, 118 U. S. 663, where there is a learned and able discussion of the law of conditional sales by Mr. Justice Bradley. Also, W. W. Kimball Co. v. Mellon, ante, p. 133, where the validity of such a contract as the one now before us is impliedly affirmed, when signed by the parties and filed in the proper office. The counsel for the assignee did not seriously question the validity of a conditional sale, but he claimed this was not such a contract, but was an absolute sale with a reservation of a lien or mortgage to secure the purchase money. The fact that the lumber was to be at the risk of the vend-ees, who agreed to insure it in responsible companies, to be selected by the vendor, in at least $20,000, and have the policies assigned to such vendor as collateral security, he insisted, strongly confirmed his view of the contract. It was doubtless the intention of the parties that there should be a qualified delivery of the lumber to the vendees. The contract provided that the vendees should render a statement of sales to the vendor on the 15th days of March, April, May, and June, 1888, and pay over all moneys received on such sales, to apply on the purchase price; and on the 1st of July, 1888, should pay the balance of the purchase money. The vendees were impliedly authorized by the agreement to sell the lumber, but were bound to pay — 237 — all moneys received from tbe sales to tbe vendor, until tbe purchase money was paid. The vendees, in a sense, acted as agents for tbe owner in mating sales, and, as they were fo have a qualified possession of the lumber, which was to be kept in their yard, it was not unreasonable that tbe property should be at their risk, and that they should insure it for the benefit of the vendor. These stipulations in the contract are not necessarily inconsistent with or repugnant to the clause which we have quoted, which provides that the title and right of possession of the lumber should remain in the vendor until the entire purchase money was paid. Consequently, this being a conditional sale, it is clear that ch. 241, Laws of 1887, which relates to mortgages, has no application to it. Nor does the decision in Anderson v. Patterson, 64 Wis. 557, and that class of cases, apply. ' The court below held on the trial of the equitable counterclaim that there was nothing in the agreement or in the conduct of the vendor which tended to invalidate his rights, or which warranted the inference that there was anything fraudulent in the transaction, so far as the creditors of Vaughn & Co. were concerned. "We fully concur in that view of the evidence. The plaintiff seems to have been diligent in trying to collect his pay of Vaughn & Co., and it is not correct to say the evidence shows that he knew what use the firm rvas making of the proceeds of the sales of his lumber. He undoubtedly supposed that they were paying over to him all moneys as they collected them, for they so represented, and he credited their statements. In this case the defendant claims the lumber as assignee of Vaughn & Co. If the contract was a conditional, sale and delivery, and was properly recorded, there being no fraud in the transaction, the plaintiff is entitled to the possession of the lumber. Certainly Vaughn & Co. could not give to an assignee for the benefit of creditors, title to property which they did not own. No equities have intervened — 238 — to give tbe assignee a better right to the lumber as against the plaintiff, who retained by his contract the right of possession. The conditions of the sale have not been complied with, nor have they been waived by anything the plaintiff has done or failed to do. He is entitled, under the circumstances, to recover the lumber which remained unsold. Coggill v. H. & N. H. R. Co. 3 Gray, 545; Harkness v. Russell, 118 U. S. 663. This brings us to the plaintiff’s appeal. The trial court directed the jury to assess the plaintiff’s damages for the unlawful detention of his property at sis cents. This direction was given, doubtless, on the theory that there was no evidence of a demand of the property until about the time this replevin action was commenced, and hence no damages for a detention could be assessed. We think the direction was wrong, as there is abundant evidence in the case from Avhich the jury would have been warranted in finding that the defendant assumed the right to dispose of this lumber as a part of,the property of Yaughn & Oo. which he took under the assignment, and that he ezercised dominion over it to the exclusion or in defiance of the plaintiff’s rights, immediately after the assignment was made. The assignment was made on the 23d of May, 1889, and in his answer the defendant states that he, immediately upon the execution of the assignment, took possession, as assignee, of the property described in the complaint as being the property of A. P. Yaughn & Oo., and ever since that time, and until the commencement of this action, has held said property by virtue of the assignment as the property of A. P. Yaughn & Oo., and so conveyed to him by the assignment. There is considerable testimony that when the plaintiff went, on the 23d of May, 1889, to take the lumber into his possession and control, the defendant forbade him from interfering with it, threatened to have him arrested if he — 239 — should attempt to remove it, and claimed that be was in possession of the property as assignee and had the right to hold it as such. There is much testimony of that character in the case, given on both sides, tending strongly to show that the defendant distinctly denied the plaintiff’s right to take the lumber. Under these circumstances it is obvious that any formal demand for the lumber by the plaintiff would have been idle and nugatory. He did, however, make a formal demand about the time'the suit was commenced, and the evidence tends to prove that he made what was equivalent to a formal demand in May. This being so, the case should have gone to the jury to find whether there was not in fact a conversion of the lumber in May, as claimed by the plaintiff. True, the plaintiff alleges in his complaint that, on the 2d of November, 1889, the defendant wrongfully took possession of the property, and has since unlawfully detained it; but this no more imports verity in the case than the allegation in the answer that the defendant took possession immediately on the execution of the assignment in May. The pleadings could be amended so as to conform to the proof, and the parties ought not to be concluded by them. The question, therefore, should have gone to the jury, to find whether there was not a conversion in May, and whether the plaintiff did not, at that time or shortly afterwards, make what was equivalent to a demand for the possession of the lumber, which was denied by the defendant. The measure of damages which this court has laid down in numerous cases of this kind is the legal interest on the value of the property while it was unlawfully detained, and compensation for any depreciation, if any, of the property replevied. ¥e do not see why this rule should not govern in this case. There must be a new trial of this issue as to when the defendant converted the lumber by assuming the right to control it or by exercising rights of owner — 240 — ship over it to tbe exclusion of tbe plaintiff. "When that fact is determined, tbe above rule of damages will apply. We see no necessity for trying tbe other issues in tbe case, as they bave been already fully tried. Tbe new trial will, therefore, be confined to this issue alone. By the Gouri.— Tbe judgment is affirmed on tbe defendant’s appeal, and is reversed on tbe plaintiff’s appeal, and tbe cause is remanded for a trial of tbe issue stated in tbe opinion.