Passow v. Emery

• Decision Date: 05 January 1910
• Docket Number: 2090
• Citation: 106 P. 935,37 Utah 49
• Court: Utah Supreme Court
• Parties: PASSOW et al. v. EMERY, Sheriff

106 P. 935

37 Utah 49

PASSOW et al. v. EMERY, Sheriff

No. 2090

Supreme Court of Utah

January 5, 1910

On Application for Rehearing, February 11, 1910.

Appeal from District Court, Third District; Hon. M. L. Ritchie Judge.

Action by Louis Passow and another against Frank C. Emery, as sheriff of Salt Lake County.

Judgment for defendant. Plaintiff appeals.

REVERSED, WITH DIRECTIONS.

D. B Hempstead for appellants.

APPELLANT'S POINTS.

The transaction constituted a preliminary conditional contract of sale, title to remain in vendor until payment. Such contracts have always been upheld by the Supreme Court of Utah. (Russell v. Harkness, 4 Utah 197; Turnbow v Beckstead, 25 Utah 468, at page 477; Hirsch v. Steele, 10 Utah 18; Detroit Heating Co. v. Stevens, 16 Utah 177; Lippincott v. Rich, 19 Utah 140; Lippincott v. Rich, 22 Utah 196; Standard Laundry v. Dole, 22 Utah 311; Freed Furn. & Car. Co. v. Sorensen, 28 Utah 419.) The case of Russell v. Harkness, supra, was affirmed by the Supreme Court of the United States. (See Russell v. Harkness, 118 U.S. 663.) That leases of personal property similar in form to the foregoing are upheld either as leases or as conditional sales, see Gerow v. Castello, 19 P. 505 [Colo.] If plaintiff's exhibit 2 cannot be construed to be a lease, it can only be construed to be a conditional sale contract of the property described therein; it cannot be construed to be a chattel mortgage. (6 Ency. of Law, 2 Ed., pp. 447-8; 1 Mechem on Sales, sec. 569-573; Hayes v. Jordan, 9 L. R. A. 373 [Ga.] and cases cited in notes; Hineman v. Matthems, 10 L. R. A. 233 [Pa.] and cases cited in notes; Tufts v. D'Arcambal, 12 L. R. A. 446 [Mich.] and cases cited in notes.) A provision in the contract that the purchaser shall execute a mortgage on the property to secure the payment, does not make the sale absolute unless the mortgage be in fact executed. (McRea v. Merrifield, 48 Ark. 160; 1 Mechem on Sales, sec. 583; Hammond on Chattel Mortgages, sec. 4, pp. 9-10; Nichols v. Ashton [1891], 155 Mass. 205.)

Stephens, Smith & Porter for respondent.

RESPONDENT'S POINTS.

In case of doubt as to whether the transaction is a conditional sale or a mortgage equity will construe it to be a mortgage. (Mining Co. v. Baker, 23 F. 258; Niggler v. Maurin, 24 N.W. 369; Rogers v. Burris, 9 N.W. 786; D. A. Tompkins Co. v. Oil Vompany, 137 F. 625). This exhibit 2 is nothing more than an instrument securing the payment of the notes which represent the debt and it is consistent with the provisions of the original agreement. (Exhibit 1). (Haryford v. Davis, 102 U.S. 235; Chicago Ry. Equipment Co. v. Bank, 136 U.S. 268; McGurkey v. Toledo & Ohio Ry., 146 U.S. 536.) It is settled law that if a security for money is intended, that security is a mortgage, though it may not bear upon its face the form of a mortgage. (Singer Mfg. Co. v. Smith, 19 S.E. 132, construing a lease to be a mortgage). The omission to demand the security at the time of delivery, or at the time of the giving of the notes is sufficient to preclude the plaintiff from claiming that the transaction from that time was on condition. (Brundage v. Camp, 21 Ill. 329; M. C. R. R. v. Phillips, 60 Ill. 191; Husted v. Ingraham, 75 N.Y. 251). In the leading case of Parker v. Baxter, 86 N.Y. 586, it was held where goods sold for cash or notes are delivered to the purchaser without the cash or notes being given or demanded at the time, the presumption is that the condition is waived, and that a complete title vests in the purchaser. (Osborn v. Gantz, 60 N.Y. 540; Hennequin v. Sands, 25 Wend. 639; Gowan v. Kehoe, 71 Ill. 66; Oester v. Sitlington, 115 Mo. 247; Farlow v. Ellis, 15 Gray 229; Berlin Machine Works v. Trust Co., 61 N.W. 1131).

FRICK, J. STRAUP, C. J., and McCARTY, J., concur.

OPINION

FRICK, J.

Appellants brought this action against respondent, as sheriff of Salt Lake County, to recover the value of certain personal property, of which they claim to be the owners, and which they allege the respondent converted to his own use. Respondent in his answer, after making certain denials, as an affirmative defense alleges that in taking the property in question he acted under process of law issued by a court of competent jurisdiction, and took and sold the same on an execution issued upon a valid judgment, etc. Appellants filed a reply, in which they, in effect, deny all the affirmative matter contained in the answer. The case was tried to the court without a jury, and the court found the issues in favor of respondent, and entered judgment accordingly. Appellants present the record for review on appeal.

The material facts upon which the legal questions presented by respective counsel arise, briefly stated, are as follows:

The appellants, at the time of the transaction herein referred to, were copartners engaged in business in Chicago, Illinois, under the firm name of Charles Passow & Sons, having a branch office at Salt Lake City, where they were represented by an agent. On December 16, 1907, one Joseph Leautaud ordered certain pool and billiard tables and other articles from appellants by a written order, which, so far as material here, is as follows:

"Mr. Joseph Leautaud, No. 29, Market street of the town of Salt Lake, State of Utah, has this, the 16th day of December, 1907, contracted for and ordered of Charles Passow & Sons, Chicago, Illinois, through their salesman, W. H. Seber, the following mentioned goods. This contract subject, however, to the approval of the company. [Describing chattels.] Goods to be shipped on or about at once, to Mr. Joseph Leautaud, town of Salt Lake, State of Utah, subject to delay on account of strikes or other unforeseen accidents, via , and the freight payable by the purchaser. Settlement to be made on arrival of goods at station, at office of Charles Passow & Sons. Price, ($ 1,187.00) eleven hundred and eighty-seven dollars. Terms, ($ 650.00) six hundred and fifty dollars, cash. Balance in twelve payments of $ 44.75 each, payable in the 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 following consecutive months with interest at the rate of 8 per cent. per annum. Payments to be secured by first mortgage and fire insurance on said goods above described, expense of which is to be paid by the purchaser. It is understood and agreed that the title to the property described in this contract shall remain with Charles Passow & Sons until the notes and chattel mortgage are fully executed by the purchaser. Or if the purchaser herein is a cash transaction then, and in such event, the title to the property is to remain in said Charles Passow & Sons, also, until they receive the full amount in cash of the purchase."

It is conceded that Leautaud paid appellants the sum of six hundred and fifty dollars of the eleven hundred and eighty-seven dollars mentioned in the order on the day the order was given. The chattels mentioned in the order were subsequently shipped from Chicago to Salt Lake City, where, on the 28th day of December, 1907, appellants, as vendors, and said Leautaud, as vendee, entered into the following contract, to-wit:

"This agreement, made and entered into between Louis A. Passow and Henry E. Passow, copartners as Chas. Passow & Sons, of the city of Chicago, in the State of Illinois, as the parties of the first part, and J. Leautaud, of Salt Lake City, county of Salt Lake, State of Utah, as party of the second part.

"Witnesseth, that the parties of the first part hereby lease and let unto the party of the second part the following described personal property, to-wit: [describing chattels] for the term of twelve months from and after the date hereof; and the party of the second part hereby promises and agrees to pay to the parties of the first part, as rental for such personal property during such term, the sum of $ 1,187.00, to be paid as follows: The sum of $ 650.00 at the time of the execution of this lease and the sum of $ 45.00 on the 1st day of each and every month after the date of this lease, until the whole amount of such rental shall have been paid. Last payment to be $ 42.00.

"The party of the second part further agrees to carefully use the property, hereinbefore described, at No. 29 Post Office Place, in the city of Salt Lake, State of Utah, and not elsewhere; to keep the same in good repair and condition; to pay interest on all rental at the rate of eight per cent. per annum until paid, and to keep said property insured in a solvent company, at the expense of the party of the second part, and in an amount equal to eighty per cent. (80) of the value of such property, with loss, if any, payable to the parties of the first part; and in case the party of the second part shall fail or neglect to secure such insurance, then the parties of the first part shall have the right to secure such insurance, and the amount of the premium paid therefor shall be, upon demand therefor, paid by the party of the second part to the parties of the first part.

"In case default shall be made by the party of the second part in the payment of the rental becoming due hereunder, or any part thereof, or in the performance of any of the terms or conditions of this lease, then and in that event the first parties shall, at any time after such default and while the same continues, be entitled to the possession of the property hereinbefore described, and shall have the right to enter any premises where the same may be and take possession thereof, with or without process of law."

To this contract was appended the following writing, termed an "option:"

"In consideration of the sum of one dollar, to us in hand paid, receipt of which is hereby acknowledged, and the payment of the rental as provided in the foregoing lease we hereby grant and give unto the party...