Stern v. Drew

• Decision Date: 04 December 1922
• Docket Number: 3753.
• Citation: 285 F. 925
• Parties: STERN v. DREW.
• Court: U.S. Court of Appeals — District of Columbia Circuit

285 F. 925

STERN v. DREW.

No. 3753.

United States Court of Appeals, District of Columbia.

December 4, 1922

Submitted October 6, 1922.

Appeal from the Supreme Court of the District of Columbia.

Morris Simon, Lawrence Koenigsberger, and Eugene Young, all of Washington, D.C., for appellant.

A. H Ferguson and Woodson P. Houghton, both of Washington, D.C for appellee.

Before SMYTH, Chief Justice, and ROBB and VAN ORSDEL, Associate justices.

VAN ORSDEL, Associate Justice.

This appeal is from a judgment of the Supreme Court of the District of Columbia in an action of replevin, brought by appellant, plaintiff below, to recover from defendant an automobile.

It appears that plaintiff delivered the automobile to B. H Covell and P. L. Creamer in consideration of a cash payment of $889.75, as alleged rental in advance, and $1,500 to be paid at the rate of $37.50 per week, alleged weekly rental for 40 weeks. The written instrument, designated by the parties as a lease, among other things, provides that:

'They (Creamer and Covell) will surrender up the same to the said party of the first part (appellant) upon default or at the expiration of this lease in as good condition as when they took the same (natural wear excepted); and if, upon surrendering the same as aforesaid, the said rent having been fully paid as herein provided, said party of the second part desires to purchase said leased property, said party of the first part agrees to sell the same for the sum of twenty-three hundred ninety 75/100 dollars, and the amount received for the rent of the same shall be applied upon the purchase price of the same at that date. * * * It is agreed that this lease * * * shall be construed as made in the state of Pennsylvania and subject to the laws of Pennsylvania. This agreement of lease shall be governed by the laws of Pennsylvania.'

Subsequently and at a time when more than $1,000 remained due and unpaid upon the contract, defendant Drew purchased the automobile from Covell and Creamer for $1,000 cash. The present contract was not recorded, and it conclusively appears that Drew purchased without notice of its existence.

It is contended that the contract must be construed according to the laws of the state of Pennsylvania and not of the District of Columbia. Jurisdiction over personal property attaches within the territorial limits where found. Knowles Loom Works v. Vacher, 57 N.J. Law, 490, 31 A. 306, 33 L.R.A. 305; Smith v. Union Bank of Georgetown, 5 Pet. 518, 8 L.Ed. 212. Under the terms of the contract the automobile was to be kept in the District of Columbia, until the contract was fully carried out. The contract, therefore, must be construed according to the law of the place of performance. Union Trust Co. v. Grosman, 245 U.S. 412, 38 Sup.Ct. 147, 62 L.Ed. 368; Croissant v. Empire State Realty Co., 29 App.D.C. 538. In the latter case the court held it to be a general principle:

'That a contract is to be governed by the law with a view to which it was made, and this is a question of intention, to be deduced, when not expressly declared, from the place, terms, character, and purposes of the transaction.'

It follows that, when plaintiff company elected to do business in the District of Columbia, it subjected itself to the laws of this jurisdiction. If it relied upon its construction of the contract, as a lease instead of a conditional sale, and neglected to protect itself by recording the contract (Code D.C. Sec. 547), it assumed the responsibility of adopting a mistaken view of the law.

This case turns upon the question of whether or not the instrument is a lease or a contract of conditional sale. The contract in terms lacks convincing proof of an intention to establish a mere bailment for hire. In construing contracts of this sort, the court will pay little regard to the name used to designate it, but will be guided rather by the real intention of the parties, as disclosed by the terms of the instrument itself. As was said in Herryford v. Davis, 102 U.S. 235, 26 L.Ed. 160:

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