Charles Lippincott & Co. v. Rich

After stating the facts, Miner, J., delivered the opinion of the court: The respondents, defendants below, to maintain. their defense, introduced in evidence the deed of assignment from Horn and the Wasatch Drug Company to Forbes, to which appellant objected on the ground that it was fraudulent and void as to creditors and as to the appellant, and that the assignee therein was empowered to dispose of the assigned property for cash at public or private sale, or on time, with good security if sold in bulk, as the assignee might deem most beneficial to the interests of the creditors. The objection was overruled and the assignment introduced in evidence. In one respect the appellant was a creditor of the assignor. He could sue and recover on his unpaid notes, [147] or in bis discretion take the property into his own possession after default. After the assignment he demanded and sought to recover possession of the property. The assignee for the benefit of creditors succeeded to such rights only as the assignor had at the time of the assignment. He acquired no title to the property held by the assignor under a contract of conditional sale when the title thereto had not yet been vested in the assignor by the performance of the condition. Under such circumstances the vendee under such contract of conditional sale can not sell or mortgage such property so as to pass title thereto until the conditions of the sale are complied with. 6 Am. & Eng. Enc. of Law, 494, 486, and cases cited. As to the plaintiff, the assignment of the property in question was fraudulent, and he was entitled to take possession of the property. The deed of assignment was void as to the plaintiff because it empowered the assignee to sell the property on credit. Such a provision avoids the assignment because it inevitably tends.to delay the conversion of the assets into money and would delay and hinder creditors in the collection of their claims under the provisions of Sec. 2838, Compiled Laws of 1888. As against the plaintiff, who was entitled to the possession of the property under his contract, the deed was incompetent evidence. The assignor could not by the execution of the assignment transfer to the assignee title to the property in question as against plaintiff’s right of possession and ownership thereof as evidenced by the contract note given for the purchase money on the conditional sale. As against the plaintiff, it was merely a 1 written statement made by the maker of the notes that conveyed no title or right of possession to the assignee or to any one to whom he sold it. The record does not show that any waiver of the condition in the [148] notes was ever made or offered to be shown. We are of the opinion that the court erred in admitting the deed in evidence. Bues v. Shaughnessy, 2 Utah, 492; Spect v. Parsons, 7 Utah, 107; Porter v. Williams, 9 N. Y., 142; 97 Am. Dec., 519; Nicholson v. Levitt, 6 N. Y., 510; 57 Am. Dec., 499 Bowen v. Parkhurst, 24 Ill., 257; Wilheem v. Byles, 60 Mich., 561; Detroit H. & L. Co. v. Stevens, 16 Utah, 177; Hirsch v. Steele 10 Utah, 18. It is also contended that the court erred in refusing to instruct the jury to the effect that plaintiff was entitled to choose his own paymaster and was not bound to accept any offer from any person other than the original purchaser of the fountain. This request embraces the principle that where the vendee who is in default under the contract of conditional sale wherein the vendor retains title until full payment with power to take possession of the same on default, had sold the property covered by the contract and actually transferred possession thereof, the purchaser from such vendee acquires no title, and the vendor did not lose his title pr right of possession, but has, the right to take and retain the property, and was not; bound to accept a tender of payment after default from aj stranger to the contract although he be an assignee of his;, grantor or other person to whom it is transferred. We are of the opinion that the request should have been given. “In the absence of any statute providing otherwise, the general rule is that where personal property is sold and delivered to the vendee on condition that the title is to remain in the vendor until the purchase price is paid or secured, the vendee who has not yet acquired title by the performance of the condition can convey no title even to a bona fide purchaser that can be enforced against the original vendor,' and that the latter, if guilty of no laches, [149] may recover the property from such purchaser and from his vendee.” 6. A. & E. Enc. of Law, 2d ed., 486, 487, and cases cited; Hirsch v. Steele, 10 Utah, 18. The note or contract was payable at the bank. Default had been made in its payment and no legal tender of the amount due had been made, either before or after default. Demand of possession and recission of sale had been made before any proposal was made to pay by the assignee or his grantee. The vendor was entitled to the possession of the property after condition broken. The transfer of the property by Horn to the assignee and by him to Rich and the Wasatch Drug Company, either after, default or after demand of the property by the plaintiff/ and the recission of the sale, created no title in thp defendants. The plaintiff could not be compelled, under such circumstances, to accept, against his will, a new creditor or a new paymaster, or to make a new contract of sale. Chase v. Pike, 125 Mass., 116, 117; 6 A. &. E. Enc. of Law, 2d ed., 487; Summer v. Woods, 42 Am. Rep., 104; Holman v. Lock, 51 Ala., 287; Kohler v. Hays, 41 Cal., 455; Detroit H. & L. Co. v. Stevens, 16 Utah, 177; Hirsch v. Steele, 10 Utah, 18; Thurby & Jackson v. Rainbow, 93 Mich., 164; Gill v. De Arment, 90 Mich., 425; Reed v. Hosmer, 90 Mich., 152; French v. Osler, 32 Atl., 254; Willard v. Morse, 32 Pa., 506; Benjamin on Sales (Bennett’s notes), 269. The case is reversed and remanded to the district court with instructions to set aside and vacate the judgment and grant a new trial, appellant to recover costs. Bartch, C. J.. and BaskiN, J., concur.