Mahnke v. Marken Acres Co.
| Decision Date | 11 November 1919 |
| Docket Number | No. 32204.,32204. |
| Citation | 187 Iowa 762,174 N.W. 669 |
| Parties | MAHNKE v. MARKEN ACRES CO. ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Tama County; James W. Willett, Judge.
The defendant J. H. Marken alone appeals. His complaint is that it was error to give plaintiff a mechanic's lien upon such interest as defendant had as a vendor, and error to render judgment against appellant personally. Reversed.Struble & Stiger, of Toledo, for appellant.
James H. Willett, of Tama, for appellee.
I. Plaintiff alleges, for one thing, that he improved the property of defendant Marken Acres Company by furnishing material and labor; that said company is comprised of the defendants, J. H. Marken and R. E. Glass; that he is entitled to recover as prayed against defendant J. H. Marken because Marken was when said contract was made, and ever since, the owner in fee simple of the real estate which was improved by plaintiff.
The allegation that Marken was owner as alleged is highly important. Is it proved? It is undisputed that Marken and Glass made written contract concerning these premises. That contract recites that Marken is the owner of the lands in question; that Glass agrees and undertakes that he will forthwith proceed in the conduct of a selling campaign to dispose of the land in city lots and acreage tracts as may be deemed best to all concerned; that he agrees to pay Marken $80,000. It is contracted that out of this sum Marken shall provide for the payment of the mortgage indebtedness. Glass undertakes to have contracts of disposal entered into by purchasers on or before November 15, 1915, and to pay said $80,000 to Marken on or before January 1, 1916. There is provision that all claims for crop damage and for the rights of tenants on the north side of the tract shall be adjusted by Glass, and that Marken shall retain all crops on the south 80 acres. There is further provision that as evidence of good faith Glass will deliver certain certificates to be held by Marken in trust and to be turned back to Glass when he completes his contract and pays said $80,000. Later, a modification was agreed upon. It makes no change except that instead of $80,000 to be paid Marken, the sum shall be $71,000; that instead of being obligated to pay the mortgage indebtedness, whatever it might be, in consideration of said reduction, Marken was bound to pay not more than the face of the mortgage, and interest up to May 11, 1915, and in further consideration of receiving $71,000, instead of $80,000, Glass agreed to pay 50 per cent. of all sums above $80,000 realized from selling, and Marken agreed to pay all taxes payable on October 1, 1915. Some of the things found in this amendment to contract are found in an amendment to contract considered in Arroyo v. Graham, 227 U. S. 181, 33 Sup. Ct. 248, 57 L. Ed. 472. In it, the amendment to the contract of sale read:
“On the 27th day of April, 1908, the contracting parties make addition to the third clause of this contract in the sense that the excess of price which Mr. Graham may obtain from the $55.00 per cuerda shall be divided between him and Mr. Arroyo at fifty per cent. each.”
The court held:
“There is no suggestion of agency in it, but, on the contrary, an assumption that Graham is acting on his own behalf.”
[1] Mere nomenclature--the designation given to the transaction by the parties to it--is not at all controlling. Arbuckle v. Kirkpatrick, 98 Tenn. 221, 39 S. W. 3, 36 L. R. A. 285, 60 Am. St. Rep. 854. The form of the contract may have weight, but is not at all conclusive. The real intention of the parties, rather than an artful and wordy cover of the real purpose, is the test. 1 Mechem, Agency (2d Ed.) § 46. Doubtful cases are to be determined, not by the name which the parties have seen fit to apply to their contract, but by its true nature and effect. Id. § 48. It is a sale if it appears from the whole agreement, whatever name is given it, that the parties intend title shall pass from one to the other. 31 Cyc. 1199, 1203-1205; Alger v. Keith, 105 Fed. 105, 44 C. C. A. 371. The essence of sale is the transfer of title for a price paid or to be paid. He who becomes a debtor for the purchase price and is not merely liable for the proceeds of a resale is a buyer and not an agent. It is an agency if the property remains in the principal and the agent is liable not to pay a price, but to account for the proceeds of the property when sold. 31 Cyc. 1198. In agency the principal remains owner of the property; has the right to control its sale and to fix the price and terms. He may receive the proceeds from the sale of the property, less the agent's commission, and he has no right to a price unless the agent first sell. 1 Mechem, Agency (2d Ed.) § 48. In a sale, title passes to the buyer. In agency, title remains in the principal although possession be transferred to the agent. 31 Cyc. 1198. If the seller is to have a fixed price regardless of market fluctuations, that is strong evidence of sale rather than agency. 1 Mechem, Agency (2d Ed.) par. 46.
[2] On all these tests, Marken had parted with title; and the allegation that he was owner in fee simple is unproved and conclusively disproved. All the amplifications of the test rules so hold. In May v. Brackett, 159 Iowa at page 104, 140 N. W. at page 210, we held that the contract was not one of sale. But the contract was this:
An agreement named “special selling factor appointment” is still a contract of sale transferring title to the goods where the consignee is required to pay for the goods within 60 days whether sold or not, at an amount fixed in advance, with certain allowances for carting, storing, and insuring and selling, whether the goods are carted, stored, insured, or sold or not, and there is no requirement that the consignee make any account of sales or keep the proceeds separate, and where he is given all the advantage and risk of the advancement or decline of proceeds. Arbuckle v. Kirkpatrick, 98 Tenn. 221, 39 S. W. 3, 36 L. R. A. 285, 60 Am. St. Rep. 854. An agreement of agency under which defendant was to sell the goods of plaintiff during the season of 1891, with provision that defendant “does hereby order” certain goods of plaintiff at prices named, subject to a stated discount payable in four months after May 1, 1891, with promise by defendant to give a note when requested, is, notwithstanding its other undertakings, a contract of purchase. Whatever terms may be used in describing a writing, general provisions that the consignee shall, on receipt of the goods or at some stated time or times thereafter, pay for all the goods received, whether sold or not, and that he may sell to whom he will, at what price and on what terms he will, are characteristic of a contract of sale. 31 Cyc. 1201. Where a paper is signed by both parties and there is provision that the property shall be paid for in cash, and that a mortgage shall be executed, and that the “contract” shall be recorded, and the parties recognize the agreement as a contract imposing obligations upon both parties, and not as merely a promise made by one, there is no suggestion of agency, even though, as an afterthought, the thing is termed an option. Gutierrez v. Graham, 227 U. S. 183, 33 Sup. Ct. 248, 57 L. Ed. 472. A contract to “rent” a machine for a certain whole sum, payable at the expiration of 15 months, with interest after maturity, the title to the machine until payment to remain in the lessor, and the lessor to have the right of retaking on default of payment, is a sale. Singer v. Cole, 4 Lea (Tenn.) 439, 40 Am. Rep. 20. To like effect is Cowan v. Singer, 92 Tenn. 376, 21 S. W. 663.The case of Robinson v. Easton, 93 Cal. 84, 28 Pac. 797, 27 Am. St. Rep. 167, approves the following from In re Nevill, L. R. 6 Ch. App. 397:
In Alpha Co. v. Bradley, 105 Iowa, 537, 75 N. W. 369, we held that where a contract by a manufacturer appoints a specified person as general western agent for the exclusive sale of goods, and provides that he is to pay a specified amount in cash subject to a discount if payment be made within 30 days, there is a contract of sale, and not of agency. In Ansley v. Pope, 105 Tex. 440, 151 S. W. 525, it is ruled that where the owners contracted, giving another party exclusive sale of land for 90 days, with agreement to deed any or all of it to any person to whom the others might sell, and that, if any land remained after said time, the others should buy the same for themselves, and the others were bound at all events to take all of the land if they did not sell it, and, both parties being entitled to specific performance, such contract was one for the sale of land, and not for a mere agency. If it appears that possession of property has been transferred, but a naked title reserved merely to secure payment of the price, the contract is a sale, although it may in the agreement be called an agency. 31 Cyc. 1201.
Cases wherein the evidence of sale was much less strong than is here present have declared the transaction in them to be a sale. Some...
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