Northwest Realty Co. v. Perez

• Decision Date: 12 October 1965
• Docket Number: 10109,Nos. 10108,s. 10108
• Court: South Dakota Supreme Court
• Parties: NORTHWEST REALTY COMPANY, a Corporation, Plaintiff and Appellant, v. Leonard J. PEREZ, Defendant and Respondent. Leonard J. PEREZ and Virginia Perez, Plaintiffs and Respondents, v. NORTHWEST REALTY COMPANY, a Corporation, and Sheldon F. Reese, Defendants and Appellants.

Page 345

137 N.W.2d 345

81 S.D. 500

NORTHWEST REALTY COMPANY, a Corporation, Plaintiff and Appellant, v. Leonard J. PEREZ, Defendant and Respondent.

Leonard J. PEREZ and Virginia Perez, Plaintiffs and Respondents, v. NORTHWEST REALTY COMPANY, a Corporation, and Sheldon F.

Reese, Defendants and Appellants.

Nos. 10108, 10109.

Supreme Court of South Dakota.

Oct. 12, 1965.

Morrill & Morrill, Sturgis, for appellants.

Sieler & Brady, Rapid City, for respondents.

ROBERTS, Presiding Judge.

This is a consolidated appeal from judgments in separate actions.

On January 12, 1961, Signal Heights Inc. sold household furniture and appliances to Leonard J. Perez upon terms and conditions set forth in a conditional sale contract. The contract was assigned to Northwest Realty Company. On April 27, 1961, the assignee commenced an action in replevin to recover possession of the furniture and appliances described in the contract, for foreclosure and a deficiency judgment. Plaintiff also caused garnishee affidavit and summons to be served on defendant Perez and Vanderhule Transfer & Storage, Inc. Plaintiff alleged upon information and belief that the defendant intended to remove the personal property described in the contract from the State of South Dakota without permission of the seller in violation of the terms and conditions of the contract. Defendant by answer denied that there was a breach of the contract and demanded return of the property.

On May 9, 1961, Leonard J. Perez and his wife Virginia commenced an action against Northwest Realty Company and its President, Sheldon F. Reese, for damages for unlawful conversion of personal property. Plaintiffs allege that the actions of defendants were willful, wanton and malicious. They demanded exemplary in addition to compensatory damages. Defendants in their answer deny each and every allegation not specifically admitted and allege that another action was pending which involved the same transaction and that the facts justified the taking of possession of the property.

It was moved that the actions be consolidated for purpose of trial to a jury. It was stipulated that evidence be submitted in support of the actions in the order of their commencement. After plaintiff in the first action had rested, the court granted motion of defendant for a directed verdict and permitted the trial to proceed in the action for unlawful conversion. The court instructed the jury that the acts of Northwest Realty Company and Reese constituted unlawful conversion as a matter of law and left to the jury only the issues of damages. The Jury returned verdicts in the amounts of $368.82 actual and $1,000 exemplary damages on the cause of action involving the replevin of the property and in the amounts of $1,850 actual and $2,588 exemplary damages on the cause of action involving the garnishment levy. After denial of motions for new trial, Northwest Realty Company and Reese appealed. It is the contention of appellants that the evidence established the elements of their claim and entitled them to have the jury decide the fact questions and render verdicts accordingly.

The agreement is captioned 'Conditional Sale Contract'. After recital of the seller and buyer, description of the property sold and purchase price, the contract includes these provisions:

'1. Title to said property shall not pass to purchaser until said amount is fully paid in cash. * * *

'3. In the event purchaser defaults on any payment due on this contract or fails to comply with any condition of this contract * * * the full amount shall be immediately due and payable; * * *

'5. Purchaser * * * shall not remove same from the state without permission of seller; shall not transfer any interest in this contract or said property. * * *

'6. Time is of the essence of this contract, and if purchaser default in complying with the terms hereof, or seller deems the property in danger of misuse or confiscation, seller or any sheriff or other officer of the law may take immediate possession of said property without demand (possession after default being unlawful), including any equipment or accessories thereto; and for this purpose seller may enter upon the premises where said property may be and remove dame. * * *'

A conditional sale contract is a contract for the sale of personal property under which possession is delivered to the buyer, but title is retained in the seller, notwithstanding possession and appearance of ownership in the buyer, until the performance of some condition, usually the payment of the purchase price, when title passes to the buyer. SDC 54.0201; Universal Finance Corporation v. Hamner, 61 S.D. 540, 250 N.W. 33; Western Material Co. v. Deltener, 64 S.D. 62, 264 N.W. 207. The conditional sales law, SDC 54.0214, clearly contemplates that until the buyer defaults in payment, or in the performance of any other condition or promise, the breach of which authorizes the conditional seller to take possession, the buyer's possession cannot be lawfully disturbed by the conditional seller.

The trial court granted motion for directed verdict for the reason that in his opinion plaintiff had not established a prima facie case; that is to say, the evidence did not affirmatively show that defendant Perez had defaulted by removing the property without the state or defaulted in payments due under the contract and therefore the retaking constituted a conversion of the property. Such...