Heinbockel v. Zugbaum

• Decision Date: 31 January 1885
• Citation: 5 P. 897,5 Mont. 344
• Parties: HEINBOCKEL v. ZUGBAUM.
• Court: Montana Supreme Court

5 P. 897

5 Mont. 344

HEINBOCKEL v. ZUGBAUM.

Supreme Court of Montana

January 31, 1885

Appeal from Second district, Beaver Head county.

Randolph & De Witt, for appellant.

E. W. & J. K. Toole, for respondent.

WADE C.J.

This is an action of claim and delivery, in which the plaintiff seeks to recover the possession of certain personal property consisting of one billiard table, one pool table, and one set of bar fixtures, of the alleged value of $945. The complaint alleges title and right of possession in the plaintiff, and an unlawful taking and conversion to his own use by the defendant. The answer denies the title and right of possession of the plaintiff, and alleges a purchase of the property by the defendant from one Julius Lubbes, who, at the time of such purchase, and for four or five months next prior thereto, had been the owner, in the possession, and entitled to the possession thereof. The plaintiff testified that in February or March, 1882, he made a conditional sale of the property described in the complaint to Julius Lubbes, the person mentioned in answer; that $400 was paid on the sale and that Lubbes was to pay the plaintiff $100 each month for eight months, and at the end of that time the sum of $900 the balance of the purchase,--the purchase price being $2,100,--for which he took Lubbes' notes, and now has them; that one of the $100 payments became due July 15, 1882, but was not paid on that day, or at all, whereupon the plaintiff commenced this action and seized the property. The plaintiff further testified that when this sale was made Lubbes and himself entered into a written contract; that this contract was drawn by one J. C. Rogers and given to Lubbes, who left the territory July 30, 1882, and that the plaintiff had not seen him since he left, and did not know where he had gone. J. C. Rogers testified that he drew the contract referred to by plaintiff, and subject to the defendant's objection testified that he could state from memory substantially the contents of the instrument, which he did, as follows:

"That the instrument provided that the personal property mentioned in the complaint should pass into the possession of said Julius Lubbes; that Lubbes should remain in possession of the same upon the condition that he paid the amounts as mentioned by the plaintiff in his testimony, and that if he made default in any of such payments, he should forfeit said possession, and the same should revert to the plaintiff; and that the title in and to said property should not pass to said Lubbes, but should remain in the plaintiff until all of said payments were made."

There was further proof as to the loss of the instrument; but all of the testimony of the plaintiff and of the witness Rogers, relative to the contents of said instrument, was, on motion of the defendant, stricken out, and this action of the court is assigned as error. The loss of the instrument seems to have been sufficiently established to have authorized proof of its contents, provided such proof would have been competent, as tending to establish the plaintiff's title and right of possession to the property in question. The plaintiff had sold and delivered the possession of the property to Lubbes, taking his notes for the purchase money. It does not appear whether these notes were negotiable promissory notes; but whatever they were, the plaintiff had them in court when he gave his testimony. Lubbes, after so receiving possession of the property, for a valuable consideration sells the same to the defendant, and thereafter the plaintiff, still retaining the unpaid notes in his possession, some of them not being yet due and payable, upon default in the payment of one of the notes when it became due, replevins the property, claiming, though he had delivered the possession of the property to Lubbes, and had received his notes therefor, that there was a contract or agreement between him and Lubbes, which provided that if there was default in making any of said payments when the same became due, the vendee should forfeit his possession, and that the title to the property should not pass from the vendor to the vendee until all the purchase money had been fully paid. It is not claimed that the defendant had any knowledge or notice of this agreement, or that he did not pay the full value for said property, or that he was not an innocent bona fide purchaser thereof.

At one time the doctrine prevailed to some extent, and it is perhaps now held in some jurisdictions, that a bona fide purchaser, under such circumstances, ought to be protected upon the general principle that whenever one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it. And to apply this doctrine to the case in hand, the loss would fall upon the plaintiff, for he, by giving credit to Lubbes, and delivering to him the possession of the property, enabled Lubbes to commit the fraud upon the defendant. But the weight of American authority is now opposed to this doctrine. The case of Coggill v. Hartford & N.H. R. Co. 3 Gray, 549, is a leading one on this subject, and BIGELOW, J., in deciding it, says:

"It is urged, and we suppose this to be the main argument on which the contrary doctrine is founded, that as possession of personal property is prima facie evidence of title, it would furnish fraudulent parties with the means of defrauding honest purchasers to intrust them with the apparent ownership of property, while the real title is allowed to remain in a third party who can reclaim it at pleasure. If a vendor, by collusion with his vendee, entered into the contract and annexed the conditions for the purpose of enabling the latter to obtain a false credit, or to impose on innocent persons, by means of the property placed in his possession, the argument would be decisive. In such case, the vendor, being a party to a fraud, would be estopped to set up any title to the property; and creditors, as well as innocent purchasers of the vendee, might well claim to hold it on the ground that it was placed in his possession for a fraudulent purpose. But when the contract of sale is entered into in good faith for the purpose of enabling the vendor to realize his purchase money, or obtain security for it, in conformity with the original terms of the bargain, the argument ab inconvenienti is without any foundation in principle or authority. The general rule of the common law has always been that a man who has no authority to sell, cannot, by making a sale, transfer the property to another,--Chit. Cont. (8th Amer. Ed.) 342,--except in cases of sales in market overt, which do not exist in this common wealth. Possession of itself confers no authority to sell. A lessee of chattels or a bailee for a special purpose can pass no title to a vendee without authority from the lessor or bailor, and yet the property is intrusted to possession as apparent owners in the same manner as to a vendee under a conditional sale. Besides, there is no good reason or equity in placing the burden of a fraudulent sale by a vendee, in violation of the condition on which he received the property, upon a bona fide vendor rather than upon a bona fide purchaser. On the contrary, if either is to lose by his fraudulent act, it should be the latter, who has dealt with a party having no authority, instead of the former, who relies upon a valid subsisting contract as the foundation of his claim. It is the duty of the purchaser to inquire and see that his vendor has a good title to the property which he undertakes to sell. Long, Sales, (2d Amer. Ed.) 189, and cases cited; Copland v.

Bosquet, 4 Wash. C. C. 588; D'Wolf v. Babbett, 4 Mason, 294; Luey v. Bundy, 9 N.H. 298; Porter v. Pettengill, 12 N.H. 299; Herring v. Willard, 2 Sandf. 418; Barrett v. Pritchard, 2 Pick. 512; Dresser Manuf'g Co. v. Waterston, 3 Metc. 9."

In Benj. Sales, § 320, p. 274, the rule is stated to be that where the buyer is by the contract bound to do anything as a condition, either precedent or concurrent, on which the passing of the property depends, the property will not pass until the condition be fulfilled, even though the goods may have been actually delivered into the possession of the buyer. Mr. Parsons, (1 Pars. Cont. 537,) says:

"But where the right to receive payment before delivery is waived by the seller and immediate possession given to the purchaser, and yet, by express agreement, the title is to remain in the seller until the payment of the price upon a fixed day, such payment is strictly a condition precedent, and until performance the right of property is not vested in the purchaser."

In 2 Schouler Pers. Prop. § 300, the same principle is stated as follows:

"We may state, as decidedly the better opinion in this country, that a sale of personal property made by one to whom the chattel was delivered by the original seller on condition that the property should not pass until the chattel was paid for, or the price duly adjusted, confers no better title upon a bona fide purchaser, without notice from the original buyer, than the buyer himself had, or

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