Illinois Bldg. Co. v. Patterson

• Decision Date: 26 September 1932
• Docket Number: 12372.
• Citation: 91 Colo. 391,15 P.2d 699
• Parties: ILLINOIS BLDG. CO. v. PATTERSON.
• Court: Colorado Supreme Court

15 P.2d 699

91 Colo. 391

ILLINOIS BLDG. CO. v. PATTERSON.

No. 12372.

Supreme Court of Colorado, En Banc.

September 26, 1932

Error to County Court, City and County of Denver; George A Luxford, Judge.

Action by Charles L. Patterson, doing business under the name and style of C. L. Patterson Office Equipment Company, against the Illinois Building Company. Judgment was rendered for plaintiff in a justice of the peace court and in the county court on appeal, and defendant brings error.

Reversed and remanded with instructions.

BUTLER MOORE, and HILLIARD, JJ., dissenting.

Cass M. Herrington and John R. Adams, both of Denver, for plaintiff in error.

William A. Black, of Denver, for defendant in error.

ALTER J.

C. L Patterson, doing business as C. L. Patterson Office Equipment Company, defendant in error, hereinafter referred to as plaintiff, brought an action in a justice of the peace court against the Illinois Building Company, a corporation plaintiff in error, hereinafter referred to as defendant or landlord, to recover possession of certain office furniture, the title to which was claimed by both plaintiff and defendant. Judgment was rendered for plaintiff, and defendant appealed to the county court, where judgment was again rendered for plaintiff, to review which, defendant prosecutes this writ. Investors Bond & Mortgage Company, when referred to herein, will be designated as the tenant.

The material facts in this case, about which there is no substantial conflict, are: Defendant is the owner and in charge of a certain office building in the city of Denver, and, on February 10, 1928, it entered into a written lease with the tenant for certain office space, for the period of a year, at an annual rental, payable in monthly installments. The written lease contained a provision that, should the tenant be in default in the payment of a monthly installment, for the period of five days, the landlord might terminate the lease and re-enter and repossess itself of the premises, and remove any personal property belonging to the tenant, without prejudice to any claim for rent, and also the following: 'The Landlord shall have at all times a valid first lien for all rentals due or to become due hereunder from the Tenant upon all of the personal property of the said Tenant situated in the said leased premises, and said property shall not be removed therefrom without the consent of the Landlord until all arrearages in rent shall have first been paid and discharged.'

The lease was unacknowledged and unrecorded.

The tenant failed to pay the monthly installment of rent, due on December 1, 1928, whereupon, defendant placed a new lock on the door of the offices and took possession of the office furniture therein, claiming a lien thereon, by virtue of the above quoted paragraph of the lease, which lien defendant had reduced to possession, prior to receiving any notice whatever that plaintiff claimed any interest in or title to or right of possession of the office furniture. Plaintiff demanded possession, which was refused, and the replevin action followed.

Plaintiff is engaged in the office equipment business in Denver, and, on February 10, 1928, the same day upon which the lease hereinabove referred to was executed, entered into a written agreement with the tenant respecting certain office furniture, which written agreement is in words and figures as follows:

'Lease of Goods.

'This is to Certify, That I, Investors Bond & Mortgage Co. (421 U.S. Nat'l Bank Bldg.) Have this day leased of C. L. Patterson Office Equipment Co. the following goods known and described as follows: * * * valued at $748.00 subject to the following, to-wit:

'First--That I make a payment of $300.00 and each succeeding Month hereafter a payment of $56.00 until $748.00 is paid.

'Second--That I will not sell or attempt to sell or dispose of any of said goods at the premises, No. _____ now occupied by me (removal from fire or danger excepted), and not remove them therefrom without the consent of C. L. Patterson Office Equipment Co.

'Third--Should I fail to make any of said payments as specified, or sell or attempt to sell or dispose of any of said goods or any interest therein, or should any of such goods be attached or levied on, or removed or attempted to be removed from said premises, then this lease shall be void, and I will forthwith surrender and return said goods to C. L. Patterson Office Equipment Co. in as good condition as when received, customary wear by careful usage excepted.

'Fourth--No agreement of sale of said goods is implied, nor shall a sale or purchase be deemed valid without a written receipt from said C. L. Patterson Office Equipment Co. therefor. Time is hereby made the essence of this agreement.

'Fifth--I hereby give said C. L. Patterson Office Equipment Co. and his representatives permission to enter upon my premises and remove the goods contained therein whenever the terms of this lease shall be violated.

'In Witness Whereof, I have hereunto set my hand, in the City of Denver, Colo., this 10th day of February, 1928.

'Name Investors Bond & Mtg. Co.

'Address 421 U.S. Nat. Bk. Bldg.

'By C. J. Erett, Sec'y.

'C. L. Patterson Office Equipment Co.

'Salesman Lynch.'

It will be observed that the above instrument was unacknowledged; however, it was filed for record in the office of the clerk and recorded of the city and county of Denver on February 28, 1928. All of the installments due on the above instrument were paid, excepting only the last in the sum of $56, which fell due in October, 1928, and for this amount the tenant gave plaintiff a check, which was dishonored. Subsequent to the date when defendant took possession under its landlord's lien, being some time after December 1, 1928, plaintiff made his demand on defendant for possession of the chattels.

Some of the evidence offered on plaintiff's behalf, and admissions of his counsel at the trial, tend to show the construction placed by them upon the 'Lease of Goods,' hereinBefore copied in full, and which will be hereinafter referred to as Exhibit A. For the purpose of showing the exact nature of this transaction, we quote such parts of the testimony as refer thereto.

One Lynch, who was the salesman who negotiated Exhibit A, testified, in part:

'Q. I hand you plaintiff's Exhibit A and ask you to state what it is? A. This is the lease for merchandise which I sold to the Investors Bond & Mortgage Company. * * *

'Q. What are your duties in connection with your employment? A. Well, I sell merchandise and equipment, appraise second-hand furniture, and buy furniture. * * *

'Q. What do you mean by sales? A. We have different ways of selling goods. Sometimes we sell it directly for cash, sometimes on open account, sometimes we lease it on deferred payments.

'Q. Will you explain what you mean by lease and deferred payments?

'Mr. Black. (plaintiff's attorney) I object to going into this matter. The Supreme Court has ruled upon these contracts of sale. They are conditional sales. It is a question of law. This witness is not competent to tell what a contract is.

'The Court. Objection overruled.

'A. So far as the way the contract reads it is our equipment until it is fully paid for.

'Q. When it is fully paid for title passes? A. Yes sir.

'Q. A customer owns these leased goods, you deliver by bill of sale when the payments are made--after all payments are made? Was that the understanding at the time Exhibit A was entered into? A. Yes.

'Q. That is, that the Investors Bond & Mortgage Company would get title when all the payments were made? A. It remains ours until all payments are made.' (Italics ours.)

Plaintiff testified, in part, as follows:

'Q. Isn't it customary when you lease goods, upon payment of the full list price, in accordance with the terms of the lease, that you contemplate giving a bill of sale in every case? A. If the lease is carried out according to the agreement, we do. * * *

'Q. Your lessee doesn't understand that upon payment of the purchase price set forth that he will get a bill of sale for the goods? A. We assume that he knows that. * * *

'Q. You stated you received this check (referring to the dishonored check of November 24, 1928, given him by the tenant) in payment of the balance due on the furniture involved in this suit here? A. Yes sir.

'Q. Mr. Patterson, you didn't give the Investors Bond and Mortgage Company a bill of sale for this furniture on the strength of this check? A. I did not.

'Q. You still retain title to this property? A. I have had short checks Before and I was watching my step. * * *

'Q. That was the balance Before bill of sale issued in accordance with the understanding with the Investors Bond and Mortgage Company? A. Yes sir. I said, 'I got a check on a bank in Lincoln, Nebraska, and if it don't come back, I will issue a bill of sale.''

Mr. Lynch, on direct examination, testified:

'Q. Mr. Lynch, can you state to the Court the cost price of the furniture involved in this action? A. The cost price was $322.79.

'Q. What was the reason for setting forth in this lease that the valuation was seven hundred and some odd dollars? A. The reason of that was, in Lease No. 1. I sold Hank, he was quite willing when I took it in, it went in a second mortgage covering the second furniture which I sold, and I gave him a high value.' (Italics ours.)

It will thus be seen that in the county court plaintiff took the position that his 'Lease of Goods' agreement was a conditional sale contract, and we will confine him, to that position in this court. Glass & Bryant Mercantile Co. v. Farmers' State Bank, 83 Colo. 193, 203, 265 P. 682; Carlberg v. Willmott, 87 Colo. 374, 376, 287 P. 863.

The contentions of the parties hereto...