Pratt v. S. Freeman & Sons Mfg. Co.

• Decision Date: 28 November 1902
• Parties: PRATT v. S. FREEMAN & SONS MFG. CO.
• Court: Wisconsin Supreme Court

115 Wis. 648

92 N.W. 368

PRATT

v.S. FREEMAN & SONS MFG. CO.

Supreme Court of Wisconsin.

Nov. 28, 1902.

Syllabus by the Judge.

1. A sale of property, nothing being said to the contrary, is presumed to be for cash on delivery thereof.

2. An executory contract for the sale of property on credit, contemplating that the vendor will part with control of the subject thereof in advance of obtaining pay therefor, is presumed to be on condition that the executory vendee is solvent and will so continue.

3. In the circumstances stated in the last preceding paragraph, if the vendee becomes insolvent while the subject of the transaction remains under the control of the vendor, though in transit to the former and regardless of whether the title has passed to him or not, the vendor may detain the property, remove from the contract the element of credit, giving due notice thereof to the vendee, and insist upon payment for the property before it passes under his control.

4. Executory contracts for the sale of property are presumed to have embodied in them the features mentioned in the last two preceding paragraphs.

5. In case the element of credit in an executory contract for the sale of property is removed because of the insolvency of the vendee, the contract stands in all respects the same as any sale for cash on delivery; and if it is breached by neglect or refusal of the vendee to consummate the transaction by paying the price agreed upon and accepting the property, the vendor may treat the contract as broken and thereupon proceed by any one of the following ways to redress the wrong: He may store the property for the buyer and sue for the purchase price; or may sell the property and recover any deficiency resulting; or may keep the property as his own and recover the difference between the contract price and the market price at the time of the breach and at the time and place of the delivery.

6. In exercising the right of the vendor to his choice of remedies in the circumstances stated in the last preceding paragraph he is not burdened by any condition that he shall consult the interests of the vendee.

7. If the second remedy mentioned be adopted, the sale may be made at auction or in a private way, as suits the convenience or desire of the vendor so long as the way chosen is calculated to produce in money the full market value of the property. No notice of the time and place of sale is necessary, but notice of the intention to sell should be given to the end that the executory vendee may have a reasonable opportunity to comply with his contract and protect his interests by paying for the property as agreed upon.

8. The element of credit being removed from an executory sale contract under the rules before stated, subsequent ability of the executory vendee to take and pay for the property does not restore such element. If the modified contract is broken by neglect or refusal of the vendee to comply therewith, the only way to prevent the vendor from enforcing his remedy for the breach by selling the property is by tendering to him at the proper place the full amount of the purchase price.

9. If the vendor, in an executory contract for a sale and delivery of property by a given time, upon credit, breaches the same as to the element of time, and the vendee nevertheless insists upon the contract being consummated, but in the meantime has become insolvent, such insistence so far waives the breach as to prevent the vendee from subsequently rescinding the contract on account of such breach, and does not militate against the vendor's right to modify it as to the element of credit because of the vendee's insolvency, notwithstanding such insolvency may be in whole or in part referred to such breach.

10. If the vendee upon credit is required for cause to take the subject of the transaction and pay therefor upon delivery thereof, and refuses to do so, neither the remedy chosen by the vendor for the breach, nor the manner of enforcing it gives the vendee any right to rescind the contract.

11. When, in the circumstances suggested in the last preceding paragraph, the vendor elects to stand upon the contract and demand damages for the breach and to sell the property, the primary purpose of the sale is to liquidate his damages in a manner binding on the vendee, and secondarily, to recover his loss so far as the proceeds of the sale will suffice for that purpose. Irregularities in making the sale do not affect his right to recover for the vendee's breach. It only bears on the weight of the result of the sale as evidence of the market value of the property and the amount of the vendor's damages.

12. If the executory vendee in a contract for the sale of property refuses to consummate the same, the property remaining under control of the vendor, the latter's measure of damages is the difference between the market value of the property at the time of the breach and the contract price at the place for delivery. A sale under proper conditions establishes the market value. If a sale is made, not under such conditions, such value must be established in some other way. If the vendor sells the property and uses all reasonable efforts to secure the best price obtainable therefor, or obtains a fair price, it settles the question of the market value, and incidentally the amount of the damages.

13. An executory vendor, having demanded that the purchaser take the property and pay therefor upon delivery, and the latter in response to such demand having offered to pay a less sum than the amount due, and not changed his position down to the time of the sale of the property by the vendor, he may be regarded as having refused to pay such amount.

14. A sale of property for the purpose of liquidating damages for a breach of contract must be for cash. Therefore, a sale in that way, the vendor rejecting a larger offer for the property on credit, does not militate against the sale being evidence of the market value thereof,

15. The executory vendor of property does not forfeit his right to sell the same for the purpose of liquidating his damages for a breach on the part of the vendee in failing to take and pay therefor upon delivery, by refusing the vendee opportunity to inspect the property, if, at the time thereof, the latter is standing upon a refusal to take the property and pay therefor according to contract.

Appeal from circuit court, Racine county, Frank M. Fish, Judge.

Action by R. V. Pratt against the S. Freeman & Sons Manufacturing Company. Judgment for plaintiff for an amount less than claim, and he appeals. Affirmed.

The complaint was to the following effect: February 16, 1900, the Central Navigation & Construction Company of the state of Oregon, contracted with defendant, of the city of Racine, Wisconsin, for a steam boiler to be manufactured and delivered to such company by May 1st, following, for the sum of $6,000, one third being paid at the date of the contract, and the balance to be paid one half at the time of the delivery of the boiler and the other in thirty days thereafter. In November, 1900, defendant being in default as to the delivery of the boiler but having it ready therefor, refused the navigation company's demand for the privilege to inspect it preliminary to shipment, said company offering at the time of such demand to pay the balance due therefor. Subsequent to the date last mentioned, defendant sold the boiler to other parties, pretending to have rescinded the contract with the navigation company. November 20, 1900, and before this action was commenced, such company, for value, assigned its right to recover the down-payment of $2,000 to plaintiff. December 6, 1900, plaintiff notified defendant of such assignment and demanded payment of said sum with interest from the time the same came to his hands, which demand was refused. Judgment was asked for $2,000 with interest and costs.

Defendant answered admitting the making of the contract as alleged, and the completion of the boiler for shipment, but alleged that prior to such completion the navigation company became insolvent; that defendant then exercised its right to hold the boiler for full payment of the purchase money, duly notifying said company of its attitude in the matter, that thereafter, the navigation company having neglected to pay for the property, defendant exercised its legal right to sell the same for the account of such company, realizing $150 over and above the amount due, which, before the commencement of this action, was tendered to plaintiff, who refused to accept the same.

The evidence upon the trial was to the effect that the breach of contract by defendant, in failing to complete the boiler for shipment May 1, 1900, was waived; that the navigation company, before the boiler was ready for shipment, became insolvent and was notified that by reason thereof the boiler would not be shipped in advance of full payment therefor; that the boiler was such that there were very few customers for it; that defendant sold it, as alleged in the answer, because of the vendee's insolvency and its neglect to take and pay for the property as required; that $150 was realized over and above the amount due for the boiler, after paying expenses of sale. No complaint was made in the case but that a fair price was obtained for the boiler, but evidence was produced to show that a still better price might have been secured; that the property was sold for $4,300 cash, and an offer of $4,400, $400 down and $1,000 per month for four months was refused. No complaint was made by evidence in the case as to the manner in which the sale was effected, in that it was at private sale, except that defendant allowed a commission to the person who acted as its agent in the matter, while he also obtained a commission from the purchaser. It appeared, however, that the commission was reasonable except for the fact that the agent took pay from both vendor and purchaser, and further...