Nat'l Car & Locomotive Builder v. Cyclone Steam Snow-Plow Co.

• Decision Date: 21 March 1892
• Citation: 49 Minn. 125,51 N.W. 657
• Court: Minnesota Supreme Court
• Parties: NATIONAL CAR & LOCOMOTIVE BUILDER v CYCLONE STEAM SNOW-PLOW CO.

49 Minn. 125

51 N.W. 657

NATIONAL CAR & LOCOMOTIVE BUILDERvCYCLONE STEAM SNOW-PLOW CO.

Supreme Court of Minnesota.

March 21, 1892.

(Syllabus by the Court.)

1. A third person, not in privity with the parties to a contract, is not concluded by the writing by which they have evidenced their agreement. He may show that the writing was not intended to express the real agreement.

2. A contract in the terms of bailment of personal property-a snow-plow-for the period of 99 years, there being also oral evidence in favor of a third person to the effect that the terms of a bailment were thus employed to disguise what was intended as a sale, held to justify the finding that the transaction was a sale.

3. One who had contracted to pay a specified sum of money “out of the proceeds” of the first article sold of a specified kind (a snow-plow) becomes at once absolutely liable to make such payment, if in making such sale he includes also other property, a gross and unapportioned price being received for the whole.

Appeal from district court, Hennepin county; SMITH, Judge.

Action by the National Car & Locomotive Builder against the Cyclone Steam Snow-Plow Company. Judgment for defendant. Plaintiff appeals. Reversed.

Walter C. Tiffany and Frank H. Morrill, for appellant.

Hart & Brewer, for respondent.

DICKINSON, J.

Both these parties are corporations. In the year 1889 the defendant obligated itself by contract to pay to the plaintiff certain specified sums of money, amounting to a little more than $1,000, in consideration of the publication of certain advertisements by the plaintiff for the defendant. It was, however, expressed in the contract that such payment should be made “out of the proceeds of the sale of the first plow,” which meant out of the proceeds of the first snow-plow that should be sold by the defendant. This action is for the recovery of the amounts thus agreed upon. The defense is that no snow-plow was ever sold, that no proceeds of a sale of a plow were ever received, and hence that by the very terms of the contract the defendant is not liable. Some nine months after the making of the contract the defendant entered into a contract with the Southern Pacific Railroad Company, which was evidenced by a writing, by the terms of which, for the expressed consideration of $16,000, the receipt of which by the defendant was acknowledged, the latter “licensed and empowered” the railroad company to manufacture, for its own use, the Cyclone Steam Snow-Plow, for which the defendant was declared to hold letters patent from the United States. It was further declared that for the same consideration the Cyclone Steam Snow-Plow Company “hereby lets unto the said Southern Pacific Company, for ninety-nine years from the date hereof, the snow-plow known as ‘Cyclone Steam Snow-Plow No. 1,’ now in service on the lines of railroad of said Southern Pacific Company: provided, always, that said Southern Pacific Company shall, within reasonable time from the date hereof, rearrange the machinery thereon, or make or cause to be made thereon such alterations and improvements as in the judgment of the officers of the said Southern Pacific Company may be required to perfect said plow for the work for which it was designed; and that said Southern Pacific Company will, within a reasonable time, furnish unto said the Cyclone Steam Snow-Plow Company copies of the plans, designs, and specifications of any rearrangements, alterations, and improvements that said Southern Pacific Company may adopt.”

The snow-plow referred to in this instrument was delivered to the railroad company. It was the first and the only snow-plow ever manufactured by the defendant or under its patents. The court found this transaction to be a sale. We concur in this conclusion, notwithstanding the employment of the technical...