Bowman v. Adams

• Decision Date: 21 November 1927
• Docket Number: 4751
• Citation: 261 P. 679,45 Idaho 217
• Parties: R. A. BOWMAN, Respondent, v. L. R. ADAMS, TOM BEECH and WESTERN BOND & MORTGAGE COMPANY, a Corporation, Appellants
• Court: Idaho Supreme Court

261 P. 679

45 Idaho 217

R. A. BOWMAN, Respondent, v. L. R. ADAMS, TOM BEECH and WESTERN BOND & MORTGAGE COMPANY, a Corporation, Appellants

No. 4751

Supreme Court of Idaho

November 21, 1927

TRUSTS-SALES-EXECUTORY CONTRACTS FOR SALE OF CHATTELS-PASSING OF TITLE-LIENS-SPECIFIC PERFORMANCE-DAMAGES-MARKET VALUE-MEASURE OF DAMAGES-INSOLVENCY-VENDEE'S ABILITY TO PAY QUESTION FOR JURY-TROVER AND CONVERSION-SPECIAL DAMAGES-NOTICE.

1. Under contract whereby sheep were sold to be fattened and strictly fat sheep were to be repurchased by seller, buyers had complete title, not burdened with trust in seller's favor, though price was not fully paid, and company taking mortgage on sheep from buyers with knowledge of seller's contractual rights nevertheless took sheep free from any trust estate or equitable interest of original seller, under C. S., secs. 5689, 5691, 5728.

2. Where person selling sheep to be fattened for market under contract to repurchase strictly fat sheep refused to accept sheep back from buyers on inspection before delivery and demanded right to cut and weigh them, legal title passing to buyers never passed back to original seller by resale, where buyers were to make delivery on resale, under C. S., secs 5689, 5691.

3. Person selling sheep to be redelivered when fattened for market retained no lien on sheep for balance of unpaid purchase price after delivery thereof to buyers, under C. S sec. 5728.

4. Person selling sheep temporarily for fattening for market had no equitable lien thereon by virtue of having paid buyers' part of repurchase price, balance of which was to be paid on resale of fattened sheep.

5. Equitable interest of vendee or buyer in property to be sold or conveyed arises from right to specific performance, and title of vendor or seller is considered as burdened with a trust in favor of vendee or buyer.

6. Though vendee under contract for sale of real property or personal property of peculiar nature has equitable interest resulting from right to specific performance, buyer of ordinary chattels which have market value has adequate legal remedy and is not entitled to specific performance, and therefore has no equitable interest in property sold.

7. Person selling sheep temporarily for purpose of having them fattened and repurchasing such as became strictly fat held to have adequate remedy at law for damages on buyers' breach of resale contract, to have no right to specific performance of contract and no equitable interest in sheep to be repurchased.

8. Contract for sale and delivery of chattels, which are essential in specie to plaintiff and which defendant alone can supply, may be specifically enforced.

9. Specific performance of contract to sell personal property will not be granted even where chattel is special and unique if its pecuniary value can be readily ascertained so that remedy of damages is adequate.

10. Insolvency of party to contract for sale of chattels does not of itself warrant equitable interference by specific performance, where damages at law are otherwise adequate.

11. Person selling sheep under agreement to repurchase such of the sheep as should be fattened for market held not entitled to recover from buyer's mortgagee for conversion by receiving proceeds of sheep which seller refused, as seller had neither title nor right to possession, under C. S., secs 5689, 5691.

12. Plaintiff suing for conversion must show either title to thing converted or right of possession.

13. In action for damages by seller of sheep against buyers, for buyers' breach of contract to fatten sheep and resell them to seller, evidence of plaintiff's ability and willingness to pay purchase price on resale held to make issue for jury.

14. Normal measure of damages for breach of sales contract by seller where title has not passed is, under C. S., sec. 5739, difference between contract price and market or current price of property at time it should have been delivered.

15. In action for breach of sales contract, consequential damages consisting of lost or prospective profits must grow out of circumstances made known to seller at time of entering into contract, and later disclosure thereof is insufficient to warrant recovery of such profits as damages.

16. In action by person selling sheep for breach of buyer's contract to fatten sheep and resell them, plaintiff held not entitled to consequential damages consisting of lost or prospective profits, where plaintiff's particular method of handling sheep was not made known to defendant until after time of execution of contract.

APPEAL from the District Court of the Eleventh Judicial District, for Twin Falls County. Hon. W. A. Babcock, Judge.

Action for damages. Judgment for plaintiff. Reversed and remanded.

Reversed and remanded. Costs awarded to appellants. Petition for rehearing denied.

Walters & Parry, J. R. Keenan and Homer C. Mills, for Appellants.

Contracts in question were contracts of sale. (Gills v. George, 28 Ohio C. C. 583.)

Vendor's lien for unpaid purchase price is lost by delivery of the goods. (C. S., 5728; Magnuson v. Stiehm, 40 N.D. 141, 168 N.W. 613; In re Friend, 278 F. 153.)

After delivery the vendor has no trust rights against the property. (Hoven v. Leedham, 53 Minn. 95, 31 A. L. R. 574, 189 N.W. 601.)

Under agreement to sell unascertained articles by description out of a larger mass, and under an f. o. b. contract of sale, no property in the goods passes to the vendee until delivery. (C. S., secs. 5689, 5691 (Rules 2 and 5); Idaho Products Co. v. Bales, 36 Idaho 800, 214 P. 206.)

Vendors may give a valid chattel mortgage upon full legal title where the contract is executory and no property in the goods has passed to vendee. (Snohomish Iron Works v. Guhr Lumber Co., 57 Wash. 381, 106 P. 1124; 11 C. J. 658.)

That vendee has paid part of the purchase price does not postpone lien of chattel mortgage given by vendors upon the goods prior to passing of property therein. (Lighthouse v. Third National Bank, 162 N.Y. 336, 56 N.E. 738; Smith v. Wisconsin Inv. Co., 114 Wis. 151, 89 N.W. 829.)

Offer to pay less than the debt is not a tender.

Without either title or right of possession of the property there is no conversion and no right to follow proceeds. (Portland Seed Co. v. Clark, 35 Idaho 44, 204 P. 146.)

The buyer suing for damages for breach by the seller of the contract of sale must, when payment was to be made at time of delivery, show that he was ready, able and willing to make payment. (35 Cyc. 620.)

Giving of conflicting instructions is error. (Smith v. City of Rexburg, 24 Idaho 176, Ann. Cas. 1915B, 276, 132 P. 1153; Shallis v. Fiorito, 44 Idaho 489, 240 P. 932.)

Seller is not required to afford buyer opportunity of inspection prior to tender. (C. S., sec. 5719, subd. 2.)

Vendee in possession of goods not paid for may give a chattel mortgage thereon which will be prior to claims of vendor against the property though mortgagee knows that the purchase price is unpaid. (Kane v. Manley, 63 Mo.App. 43; Finke & Nasse v. Pike, 50 Mo.App. 564.)

Shad L. Hodgin, Paris Martin, W. E. Cameron and H. C. Hazel, for Respondent.

"From the date of the contract (to purchase) it (equity) looks upon the beneficial interest as in the vendee, and the legal title only as in the vendor. By construction the vendor holds the legal title in trust for the vendee . . . . and a fortiori, if the purchaser has paid the purchase money the vendor becomes a mere trustee of the legal title for the purchaser; so if the purchaser has paid part of the purchase money, the vendor becomes a trustee to the extent of the money paid." (Perry on Trusts, 6th ed., sec. 231; Branstetter v. Mann, 6 Idaho 580, 57 P. 433; Williston on Sales, 2d ed., sec. 141.)

"A purchaser with notice is liable to the same equity, and is bound to do that which the person he represents would have been required to do but for the conveyance." (Whitehorn v. Cranz, 20 Neb. 392, 30 N.W. 406.)

"It is obvious that a mortgagor can convey by mortgage only that interest which he possesses." (11 C. J. 428.)

BRINCK, Commissioner. Varian, McNaugnton, CC., Budge, Taylor, T. Bailey Lee, JJ., concurring. Givens, J., dissents.

OPINION

BRINCK, Commissioner.--

On September 6, 1922, plaintiff, being then the owner of certain sheep, entered into an agreement with the defendants Adams and Beech, which is embodied in two written instruments designated in the record as exhibits "A" and "B." By exhibit "A," plaintiff agreed to sell and deliver to said defendants, on or before September 25, 1922, 5,500 ewes for the sum of five cents per pound, $ 2,500 to be paid in cash, the balance of the purchase price to be paid upon delivery of said ewes. By exhibit "B," said defendants agreed to sell and deliver to plaintiff on or before February 15, 1923, the same ewes at seven cents per pound. The repurchase price was to be paid by plaintiff paying $ 2 per head upon the execution of the agreement, receipt whereof was therein acknowledged, and the balance upon the delivery of the ewes. Exhibit "B" provided, among other things, that Adams and Beech should deliver said ewes to plaintiff on February 15, 1923, f. o. b. cars at Twin Falls, and that strictly fat ewes were to be received on the contract after 90 days from its date, as fast as strictly fat; that said ewes should contain no cripples; that they should at the time of delivery be strictly fat, free from disease, and pass state and federal inspection, and should be free from liens and encumbrances.

By mutual agreement, the number of sheep to be covered by these contracts was increased to 13,002 head, and pursuant to the terms of exhibit "A," all were delivered to Adams and Beech within a few days after the execution of the contracts.

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