Peasley v. Noble

• Decision Date: 10 February 1910
• Parties: ED PEASLEY, Respondent, v. ROBERT NOBLE, Appellant
• Court: Idaho Supreme Court

107 P. 402

17 Idaho 686

ED PEASLEY, Respondent, v. ROBERT NOBLE, Appellant

Supreme Court of Idaho

February 10, 1910

CONDITIONAL SALE CONTRACT-FORFEITURE OF CONTRACT-POWER TO DECLARE FORFEITURE-AGENCY OF CONDITIONAL SALE VENDEE.

1. A conditional sale and delivery of the property to the vendee reserving title in the vendor, and conferring power and authority on the vendee to sell such property, has the effect of passing title to one who makes a bona fide purchase from such conditional sale vendee, and upon such sale the original vendor's title is divested and at once transferred to the purchaser.

2. Where the vendee of property under conditional sale is vested with the power to sell such property and deliver the proceeds to the vendor, a purchaser in good faith is under no obligation to follow the purchase price and see that it is delivered by the agent to the original vendor.

3. Where a conditional sale contract, accompanied with a delivery of the possession of the property to the vendee provides that a failure to make payment at the times and in the manner specified in the agreement shall work a forfeiture of all rights under the contract and entitle the seller to immediately take possession of the property sold, the mere fact of a failure to make any payment at the time or in the manner specified does not per se work a forfeiture of the contract, but in order to effect the forfeiture, it is necessary for the vendor to demand or reclaim the property. A breach or mere failure to pay does not terminate the contract, but has the effect of conferring upon the vendor the option to declare a forfeiture and repossess himself of the property he has contracted to sell.

4. Where N. delivered possession of a band of sheep to N. & Co. under a conditional sale agreement providing that title should remain in N., and authorizing N. & Co. to make sales from time to time of any part or all of such property, and providing further that upon failure to make any payment at the time and in the manner specified in the agreement, N. &amp Co. should forfeit all rights under the contract, and that N might thereupon take possession of the property, held, that notwithstanding a failure of N. & Co. to make payments as stipulated, if N. fails likewise to demand or take possession of the property, the contract is still in force and the agency to sell still exists, and that N. & Co. can transfer a good title to a bona fide purchaser until such time as N. either demands or takes possession of the property.

(Syllabus by the court.)

APPEAL from the District Court of the Seventh Judicial District, for the County of Canyon. Hon. Ed L. Bryan, Judge.

Action in claim and delivery. Judgment for plaintiff. Defendant appealed. Affirmed.

Judgment affirmed, with costs in favor of respondent.

Hawley, Puckett & Hawley, and Morrison & Pence, for Appellant.

The terms of the written contract were violated. The payments were not made when due. The right to purchase the sheep and the rights under the contract running to Newland & Co. were thereby forfeited, and they held the sheep as simple bailees, with the sole obligation (and without any power to sell or right to buy) to return them to appellant. The contract of sale was at an end; the condition which alone kept it alive was violated and there was no sale. (Citing authorities given in opinion.)

The authorities cited by respondent to support the authority to resell under the conditional contract of sale can be differentiated from the case at bar in this: Such cases involve the resale of goods, wares and merchandise where the clear intent and purpose, as well as the nature of the goods, indicated a placing of the goods for the express purpose of selling them. In the case at bar this is not the fact. Newland & Co. took the contract for the purpose of going into the sheep business and securing, so soon as they might pay out, flocks, making them proprietors and flock-masters. The question of resale is incidental and subsidiary only, and was for the purpose of giving such flexibility to the relationship as would permit them to continue the business as sheep men and flock-masters. Certainly there was no such intention as to permit an absolute and complete sale of all of the sheep. (1 Mecham on Sales, sec. 601; Pratt v. Burhans, 84 Mich. 487, 22 Am. St. 703, 47 N.W. 1064; Lewis v. McCabe, 49 Conn. 140, 44 Am. Rep. 217.)

On the question of conditional sale and construction of contract eliminating the question of agency, we cite: Harkness v. Russell, 188 U.S. 663, 7 S.Ct. 51, 30 L. ed. 285; Warner v. Roth, 2 Wyo. 63; Studebaker Bros. v. Mau, 14 Wyo. 68, 82 P. 2; Freed etc. Co. v. Sorensen, 28 Utah 419, 107 Am. St. 731, 79 P. 564; Page v. Urick, 31 Wash. 601, 96 Am. St. 924, 72 P. 454; Kidder v. Machinery Co., 38 Wash. 179, 80 P. 301; Rodgers v. Bachman, 109 Cal. 552, 42 P. 448; Van Allen v. Francis, 123 Cal. 474, 56 P. 339; Ward Land & Stock Co. v. Mapes, 147 Cal. 747, 82 P. 426; Loomis v. Bragg, 50 Conn. 228, 47 Am. Rep. 638; Sumner v. Wood. 67 Ala. 139, 42 Am. Rep. 104; Bailey v. Harris, 8 Iowa 331, 74 Am. Dec. 312; Cole v. Hines, 81 Md. 476, 32 A. 196, 32 L. R. A. 455, and note; Mark Means Transfer Co. v. McKenzie, 9 Idaho 165, 73 P. 135; Barton v. Groseclose, 11 Idaho 227, 81 P. 623; Kester v. Schuldt, 11 Idaho 663, 85 P. 974.

Rice, Thompson & Buckner, and W. E. Borah, for Respondent.

The contract between Noble and Newland & Co. expressly provides that Newland & Co. should have power to sell the property, or any part thereof, and account to Noble for the proceeds. In making such a sale, by the exercise of the power of sale above referred to, Newland & Co. became the agents of Noble, and Peasley, being the purchaser, was under no obligation to see that the proper accounting was made to Noble. Title passed to the plaintiff under the power of sale, and the question of account was one wholly between Newland & Company and Noble. (A. J. Knollin & Co. v. Jones, 7 Idaho 474, 63 P. 638; Ufford v. Winchester, 69 Vt. 542, 38 A. 239; F. J. Dewes Brewery Co. v. Merritt, 82 Mich. 198, 46 N.W. 379, 9 L. R. A. 270; New Haven Wire Co. Cases, 57 Conn. 384, 18 A. 266, 5 L. R. A. 300; Winchester Mfg. Co. v. Carman, 109 Ind. 35, 58 Am. Rep. 382, 9 N.E. 707; Fitzgerald v. Fuller, 19 Hun, 180; Bent v. Jerkins, 112 Ala. 485, 20 So. 655; Winchester Mfg. Co. v. Carman, 109 Ind. 31, 58 Am. Rep. 382, 9 N.E. 707; Wilder Co. v. Wilson, 84 Tenn. (16 Lea) 548; Columbus B. Co. v. Turley, 73 Miss. 529, 55 Am. St. 550, 19 So. 233, 32 L. R. A. 260; Armington v. Houston, 38 Vt. 448, 91 Am. Dec. 366; Rogers v. Whitehouse, 71 Me. 222; Spooner v. Cummings, 151 Mass. 313, 23 N.E. 839; Wright v. Solomon, 19 Cal. 77, 79 Am. Dec. 196.)

A careful consideration of its language shows that the contract did not terminate of itself in case of default. The law abhors a forfeiture, and will not construe a contract in favor of a forfeiture unless such construction is plainly indicated by the context, but in this case such construction is not only not clearly indicated, but the contract itself clearly shows that such was not the intent of the parties, but their intent was to clothe the party of the first part, Mr. Noble, with the power to declare a forfeiture if he saw fit. (Aultman v. Mallory, 5 Neb. 178, 25 Am. Rep. 478; Cole v. Hines, 81 Md. 476, 32 A. 196, 32 L. R. A. 455; Hutchings v. Munger, 41 N.Y. 158; Holt Mfg. Co. v. Ewing, 109 Cal. 353, 42 P. 435; Park etc. Co. v. White River Lumber Co., 101 Cal. 37, 35 P. 442; Bailey v. Hervey, 135 Mass. 174.)

When Noble failed to take the sheep as tendered to him upon the first default in payment, and stated to the purchasers that he did not want the sheep and that they should keep them and pay as they could, it was a complete waiver of title. His position was inconsistent with the right to take possession of the sheep. (Norwegian etc. Co. v. Munger, 52 Kan. 371, 35 P. 11; De Yoe v. Jamison, 33 Mich. 95; Green v. Bennett, 23 Mich. 470; Kimball v. Farnham, 61 N.H. 348; Oester v. Sitlington, 115 Mo. 256, 21 S.W. 820; Hill v. Townsend, 69 Ala. 286; Henkins v. Miller, 45 Ill.App. 37; Winnesheik Ins. Co. v. Schueller, 60 Ill. 465; Gorham v. Holden. 79 Me. 319, 9 A. 894.)

AILSHIE, J. Sullivan, C. J., concurs. Stewart, J., not present at the hearing and took no part in the decision.

OPINION

AILSHIE, J. This action is in claim and delivery. The complaint is in the usual form for such actions. The answer denied the ownership of the plaintiff and his right to the possession of the property, and also set up a separate and independent defense. The case was tried on the issues thus made, and judgment was entered in favor of the plaintiff. Defendant moved for a new trial, and has appealed from the judgment and order denying his motion.

The transaction out of which this action has arisen is substantially as follows: On January 1, 1901, George H. Stewart, John M. Haines and Lewis E. Newland, whom we shall hereafter designate as "Newland & Co.," entered into a contract with the appellant, Robert Noble, whereby Newland & Co. agreed to purchase and Noble agreed to sell 10,000 head of sheep. The material and essential part of the contract, and that upon which the decision of this case must eventually turn, is as follows:

"That to the end of perfecting said sale, the said sheep have been delivered into the possession of the said parties of the second part, but that title is to remain absolutely in the party of the first part of all of said sheep, together with the increase and the wool, until fully paid for. That the payments for the same are as follows: Ten Thousand Dollars ($ 10,000.00) on or before Jan. 1, 1902, Fifteen Thousand Dollars ($ 15,000) on or before Jan. 1, 1903, and Fifteen Thousand Dollars ($ 15,000) on or before ...