Manley Brothers Co., Inc. v. E. X. Somers

• Decision Date: 04 May 1927
• Parties: MANLEY BROTHERS CO., INC. v. E. X. SOMERS
• Court: Vermont Supreme Court

137 A. 336

100 Vt. 292

MANLEY BROTHERS CO., INC. v. E. X. SOMERS

Supreme Court of Vermont

May 4, 1927

March 1927.

ACTION OF TORT for conversion of an automobile sold conditionally. Plea, general issue. Heard by court, after April Term, 1925 Windham County, Chase, J., presiding. Judgment for defendant. The plaintiff excepted. The opinion states the case.

Judgment reversed, and judgment for the plaintiff to recover of the defendant the sum of $ 1,995, with interest thereon from June 23, 1921, and costs.

E W. Gibson and W. R. Daley for the plaintiff.

S. Hollister Jackson and John W. Gordon for the defendant.

Present: WATSON, C. J., POWERS, SLACK, FISH, and MOULTON, JJ.

OPINION

MOULTON

This is an action in tort to recover for the alleged conversion of an automobile. The case was heard by the court, and upon the facts found judgment was rendered for the defendant. The plaintiff excepted.

In the year 1919 the defendant and B. W. Goodfellow were partners under the firm name of Goodfellow Company. Their business was the selling of automobiles at retail. A partnership known as Manley Brothers was at that time the wholesale distributor of Essex automobiles for the state of Vermont. On the 23rd of September, 1919, Goodfellow Company purchased of Manley Brothers a certain Essex sedan and gave a conditional sale note and contract in payment for the sum of $ 1,995, payable thirty days from date, to Manley Brothers. In the contract it was agreed that the Essex sedan should be and remain the property of Manley Brothers until the note and any renewal or renewals thereof were fully paid. The note was signed "The Goodfellow Company. E. X. Somers." The automobile was sold and delivered to the Goodfellow Company for the purpose of resale, and it was understood and agreed by all parties concerned that Manley Brothers would extend credit to the Goodfellow Company for whatever time should be necessary in order to enable them to sell the car in the regular course of business, and that the Goodfellow Company would use the proceeds of the sale of the car to pay the note. This was in accordance with the general understanding to this effect which the parties had in such transactions.

On January 1, 1920, Manley Brothers incorporated and became the plaintiff in this suit, Manley Brothers Company, Inc., and thereafter obtained title to the conditional sale agreement and note. The Goodfellow Company also became incorporated and became the Goodfellow Company, Inc., at what date did not appear, but it was before the sale of the car at retail as hereinafter set forth.

Before the lien note became due the Goodfellow Company sent to the payee a negotiable bank note for the face of the lien note, together with a check for the accrued interest, which was accepted. This bank note was renewed and the interest paid on the following dates: December 23, 1919, April 2, 1920, June 23, 1920, August 23, 1920, November 23, 1920, February 23, 1921, and April 23, 1921. The lien note itself was never otherwise renewed or paid, and the last renewal note was not paid. On December 4, 1920, the Goodfellow Company, Inc., sold the automobile to a person named Lamorey for $ 2,500, which was the fair market value of the car. Payment was made in part by the delivery of an old car in exchange at a valuation of $ 350, and orders for clothing at Lamorey's store to the amount of $ 350, and the balance of $ 1,800 was agreed to be paid in clothing on or before December 25, 1920. There was no evidence that any other merchandise than the used car and the clothing valued at $ 350 was ever received.

The plaintiff was not informed of the sale of the car to Lamorey until the Goodfellow Company, Inc., wrote under date of February 22, 1921, inclosing a renewal note and stating that the automobile had been traded for merchandise which it had not been able to realize upon at that time owing to market conditions. In the letter inclosing the last of the renewal notes the Goodfellow Company, Inc., advised the plaintiff that the merchandise was still on hand unsold.

The plaintiff accepted the renewal notes after the car had been sold to Lamorey because the Goodfellow Company, Inc., needed time to turn the merchandise into money, and as additional evidence of indebtedness, relying upon the representations in the letter as to the merchandise, and not intending to re linquish any right, benefit or advantage it might have under the lien note. Later, and before this action was brought, the Goodfellow Company, Inc., became bankrupt, and the used car was sold.

Where property is sold upon condition that title is not to pass until payment, or with lien reserved, but upon the understanding that it is to be sold by the buyer in the ordinary course of business, the silence of the seller amounts to an implied license to sell, and when acted upon, is an irrevocable waiver of the security. Rogers v. Whitney, 91 Vt. 79, 82, 99 A. 419, and cases cited. But, as between the parties to the conditional sale, the license may be conditonal, as where the agreement is that the proceeds of the sale shall be applied to the payment of the purchase price, and in such a case the condition is binding and compliance therewith is necessary to justify and validate the sale. Reed v. Rowell, 100 Vt. 41, 134 A. 641, 642.

So here we have a conditional license to sell the automobile in question, and our inquiry must be whether the condition was complied with, or, if it was not, whether such compliance was waived by the subsequent dealings between the plaintiff and the Goodfellow Company, Inc.

The defendant claims that the permission to sell the automobile was acted upon when he and his partner transferred the car to the Goodfellow Company, Inc. But this transaction was not a sale in the regular course of business such as was contemplated by the agreement between the parties to the lien note. The corporation had succeeded to the business of the partnership, and this was a transfer of the stock in trade from the latter to the former. No consideration passed so far as appears, and the permission to sell in the...