Stevenson v. Lima Locomotive Works, Inc.

• Decision Date: 03 July 1943
• Citation: 172 S.W.2d 812,180 Tenn. 137
• Parties: STEVENSON et al. v. LIMA LOCOMOTIVE WORKS, Inc.
• Court: Tennessee Supreme Court

172 S.W.2d 812

180 Tenn. 137

STEVENSON et al. v. LIMA LOCOMOTIVE WORKS, Inc.

Supreme Court of Tennessee.

July 3, 1943

Appeal from Chancery Court, Shelby County; L. D. Bejach, Chancellor.

Suit by Earl Stevenson and others against Lima Locomotive Works Incorporated, to recover amount paid by complainant under a conditional sales contract for a dragline which was repossessed by defendant. From a decree for defendant complainants appeal.

Affirmed.

Albert Carruthers and Hillsman Taylor, both of Memphis, for appellants.

C. H Neville, of Lima, Ohio, and Wm. M. Hall and Wm. G. Hall, both of Memphis, for appellee.

NEIL Justice.

This case is before us on appeal from the Chancery Court of Shelby County. The Chancellor dismissed complainants' bill after a hearing on bill and answer and a stipulation of facts. The sole determinative question is whether or not a conditional sales contract between the parties is governed by the law of Ohio, Arkansas, or Tennessee. Complainants insist that it is a Tennessee contract, while defendant contends that it is an Ohio contract, as held by the Chancellor, or, if not, then the law of Arkansas is applicable in determining the rights and interests of the parties.

According to the stipulation of facts, the defendant was chartered by the State of Virginia. Its main office and manufacturing plant is in Lima, Ohio, with a branch office in Memphis, Tennessee. It was domesticated and authorized to do business in Tennessee at the time the contract was executed.

The complainant, Earl Stevenson, a resident of Elaine, Arkansas, and a member of a partnership composed of himself, R. A. Stevenson, and J. T. Cathey, went to Memphis on September 26, 1936, to buy a valuable machine called a "Dragline", which was manufactured by the defendant. He went to the branch office of defendant and there signed a "Sales Agreement" for the purchase of the machine, valued at $20,000. It is agreed that he bought it for the partnership and that it is a valid conditional sales contract. He paid $2,000 in cash and executed twenty-two notes for the balance. These notes, representing deferred payments, refer to the "Sales Agreement", which was dated September 26, 1936, and each contains an express retention of title in the defendant, and are payable at 77 McCall Street, Memphis, Tennessee. The said notes are dated October 1, 1936. The last clause in the "Sales Agreement" provides:

"Approval: This instrument shall be a valid and binding agreement only when it is accepted by an executive officer of the Company."

Following the signing of this instrument and signing of the notes also, they were forwarded to the home office in Lima, Ohio, for acceptance. The "Dragline" was shipped to complainants on October 1, 1936, to Chanute, Kansas, and notes dated on the same day by some officer or agent of the company in Lima. The "Sales Agreement" was not formally accepted by an executive officer of the company until October 13, 1936.

After the shipment of the machine to Chanute, Kansas, it was later used by complainant in Missouri, Louisiana, Tennessee, and Arkansas. It was in Mississippi County, Arkansas, at the time it was repossessed by defendant following default in making payment by complainant.

The stipulation further shows, Section 10, that the Stevenson Company, with company checks, made all payments under the contract. Its checks were mailed to the Memphis Office and by that office sent to the Lima Locomotive Works at Lima, Ohio. The notes thus paid and discharged were mailed to Stevenson Company. Eleven notes were paid in full, two for $1,000 each, and nine for $800 each, and $500 paid on the twelfth note. On July 8, 1939, the complainant was in default to the extent of $9,743.51. On said date the defendant replevied the machine and received it from the sheriff, taken under the replevin writ. Judgment was rendered confirming the defendant's right to said machine. There was no advertisement and resale according to the conditional sales law of Tennessee. Code 1932, § 7286 et seq.

Section 16 of the Stipulation provides that "if the law of Tennessee does not apply to and govern the contract between the parties, their rights and remedies, then the laws of Ohio or Arkansas apply." The "Sales Agreement", which is a part of the stipulation, contains the following:

"It is the express intention of the parties hereto that this agreement and all the terms hereof shall be in conformity with the laws of any state wherein this agreement may be sought to be enforced, and if it should appear that any of the terms hereof are in conflict with any rule of law or statutory provision of any such state, then the terms hereof which may conflict therewith shall be deemed inoperative and null and void in so far as they may be in conflict therewith, and shall be deemed modified to conform to such rule of law."

The complainant brought suit in the Chancery Court against defendant to recover the amount paid on the contract for its failure to comply with the provisions of the conditional sale contract law of Tennessee. The defendant answered denying liability, alleging that it was an Ohio contract and not a Tennessee contract. The Chancellor entered a decree in favor of the defendant, which complainant assigns as error.

We think it is clear upon the stipulation that, if the contract in question is not a Tennessee contract, the complainant has no case. In presenting the question considerable importance is attached to the fact that the "Sales Agreement" was not "accepted by an executive officer of the company" at Lima, Ohio, until October 13, 1936; whereas, the notes signed by Earl Stevenson and forwarded to Lima were dated October 1st at Lima, Ohio, and the machine delivered to the railroad on that date. Responding to this contention, we hold that the signing of the Sales Agreement by the vice president was an unimportant formality. The shipment of the machine on October 1st and dating of the notes on said date were a complete acceptance by the defendant and thereafter the contract was binding upon both complainant and defendant.

It is earnestly insisted that the conditional sales statute is controlling in the instant case; that the contract was concluded between the parties at 77 McCall Street, Memphis the "branch office", being the company itself and not the "traveling agent" of the company. It is true that the Sales Agreement was signed in Memphis by complainant and $2,000 in cash paid at the Memphis office; that notes were paid in Memphis. It appears, however, that there was something yet to be done by the defendant company at Lima, Ohio, i.e, the "acceptance of the contract", the dating of the notes by the defendant and shipment of the machine. We think it is immaterial as to the manner of forwarding the papers to the home office, whether by mail or personal delivery. The notes were to be a binding obligation only upon acceptance, and were to bear the date of the delivery of the machine, which was, as above stated, October 1, 1936. The intention of the parties to this contract is controlling in the instant case. This must...