The Studebaker Brothers Company v. Mau

• Decision Date: 28 March 1905
• Parties: THE STUDEBAKER BROTHERS COMPANY v. MAU
• Court: Wyoming Supreme Court

80 P. 151

13 Wyo. 358

THE STUDEBAKER BROTHERS COMPANY v. MAU

Supreme Court of Wyoming

March 28, 1905

ERROR to the District Court, Uinta County, HON. DAVID H. CRAIG Judge.

Replevin by the Studebaker Brothers Company of Utah, a corporation against Frank A. Mau. From a judgment for defendant the plaintiff brought error. The facts are stated in the opinion.

Reversed and remanded.

B. M Ausherman, for plaintiff in error.

Where property is delivered under a conditional sale contract in Utah, where the contract is not required to be recorded, the vendor has the right to follow and take possession of his property wherever it may be found. It is held in a majority of the states that conditional sales are valid not only against the immediate purchaser, but also against his creditors and bona fide purchasers from him, unless the vendor has conferred upon his vendee indicia of title upon mere possession or the forfeiture of his rights in the property by conduct which the law regards as fraudulent. (19 F. 760; 2 Kent's Comm., 497; Story on Sales, Sec. 313; Harkness v. Russell, 118 U.S. 291.)

Where personal property is sold in the State of Utah, with reservation of title in the vendor until the purchase price be paid, and, without the vendor's knowledge, the property is removed to Wyoming and sold to a bona fide purchaser, although the contract of sale is not recorded, the State of Utah not having a special statute for the recording of such contract, and contracts of that character being required to be recorded in this state, the purchaser within this state acquires no better title than that vested in the vendee, for the law of Utah must govern. (Harkness v. Russell, supra; Baldwin v. Hill, 46 P. 329; Weinstein v. Freyer, 12 L. R. A., 700; Bennett v. Tam, 62 P. 780; Redewill v. Gillam, 12 P. 872; Homans v. Newton, 4 F. 880; Mach. Works v. Lang, 68 Am. St. 675; Wire Co. Cases, 5 L. R. A., 300; 19 F. 760; Barrett v. Kelley, 44 Am. St. 862; Van Allen v. Francis, 56 P. 340; Rodgers v. Bachman, 42 P. 448; Drew v. Smith, 59 Me. 393; Mershon v. Moos, 76 Wis. 502; Page v. Urick, 72 P. 454; Hirsch v. Lumber Co., 55 A. 645.)

The statute pertaining to conditional sales in Wyoming applies only to the sale of property made within the state and does not place any restrictions upon contracts made elsewhere covering property brought into the state. Conditional sales are held valid in this state, and the title does not pass to the vendee until the conditions of the contract have been performed, and the contract is good as against third parties except as it may be brought within the statute providing for a record. (Warner v. Roth, 2 Wyo. 763; Bunce v. McMahon, 6 Wyo. 24; Furniture Co. v. Hotel Co., 11 Wyo. 128.) The court, therefore, erroneously instructed the jury with reference to the statute of this state.

J. H. Ryckman and S. T. Corn, for defendant in error.

The sale of the property in controversy by the original vendor to the original vendee was absolute, the reservation of title being taken merely as security for the payment of the purchase price. The note given to the plaintiff by its vendee must be examined to ascertain the character of the transaction, as each case must depend upon its own special circumstances. (Andrews v. Bank, 20 Colo. 313; Palmer v. Howard, 72 Cal. 296; Hart v. Barney, 7 F. 543; Knittel v. Cushing, 57 Tex. 354; Herryford v. Davis, 102 U.S. 235; Chouth v. Stevens, 43 L. R. A., 277; Aultman v. Silha, 85 Wis. 359; Shaub v. Screven, 19 S. C., 446; Weaver v. Lapsley, 42 Ala. 601; Talbott v. Sandifer, 27 S. C., 624.) The phrasing of the contract is that of a chattel mortgage. The payee of the note may take possession whenever it "deems itself insecure." It had power to declare the note due and take possession of the property; and could then sell it at public or private sale without notice and apply the proceeds on the note. Those and other provisions are such as are usually found in chattel mortgages and scarcely a word or phrase is employed which tends to show that the sale was conditional. Again, the makers of the note are absolutely liable for the purchase price of the property, or, rather, absolutely liable upon the note, thus showing that the transaction was that of a chattel mortgage and not of a conditional sale.

It is not the policy of the law to encourage conditional sales, nor to construe as conditional a sale where the reservation is equivocal or doubtful, because an error which converts a conditional sale into a mortgage is less harmful than one which changes a mortgage into a conditional sale. (Steele v. Aspey, 128 Ind. 367; Mfg. Co. v. Carman, 109 Ind. 31; Douglass v. Moody, 80 Ala. 61; Hughes v. Sheaf, 19 Iowa 335; Hinkley v. Wheelwright, 29 Ind. 341; Niggler v. Marvin, 34 Minn. 118; Klein v. McNamara, 54 Miss. 90; Turner v. Kerr, 40 Mo. 31; Edwards v. Simonds, 65 Mich. 355; Greer v. Church, 13 Bush, 434; Perkins v. Bank, 43 S. C., 44; Matthews v. Sheehan, 69 N.Y. 585; Hubby v. Harris, 68 Tex. 91; Conway v. Alexander, 7 Cranch, 218; 6 Ency. Law, 442.)

If the sale is to be construed as a conditional one, then, as it was not filed with the County Clerk of the proper county in this state, it is not valid as against the defendant, who became a bona fide purchaser for value without notice. The rule is that where a sale is made in a state where conditional sales are not required to be recorded and the property is afterward removed to a state in which registration is required, the condition is changed as to third parties without notice unless recorded according to the laws of the latter state. (6 Ency. Law, 442; Hart v. Barney, 7 F. 543; Cunningham v. Cureton, 96 Ga. 489; Jones v. Molster, 11 O. C. Ct., 432; Wharton Conflict of Laws, Sec. 275; Story Conflict of Laws, Secs. 262, 390; Green v. Van Buskirk, 5 Wall., 310; The Marina Cases, 19 F. 760.) The enactment of our present Section 2837 in 1895 changed the rule announced by this court in Warner v. Roth, 2 Wyo. 63, and Bunce v. McMahon.

The language of the statute cannot be reasonably construed to refer merely to sales made within the state; it is too broad for any such construction. Every state has a right to regulate the transfer of property within its limits, and one who sends property into a state must submit to the regulations concerning its transfer enforced there, although a different rule may prevail there than in the jurisdiction where he resides. (Hervey v. Locomotive Works, 93 U.S. 664; Pullman Car Co. v. Pennsylvania, 141 U.S. 18; Warner v. Johnson, 21 N.W. 483; Dyer v. Thorsted, 29 N.W. 345; Talbert v. Horton, 31 Minn. 518.) The cases cited by the plaintiff in error are not in point. There is no provision in the contract prohibiting the removal of the property from Utah, and so there was no felonious taking of the property when it was taken into Wyoming.

BEARD, JUSTICE. POTTER, J., concurs.

OPINION

BEARD, JUSTICE.

The plaintiff in error commenced this action in justice's court to recover the possession of a buggy. There was a trial to a jury, verdict and judgment for defendant Mau. Plaintiff appealed to the District Court, where the case was tried to a jury, which resulted in a verdict for the defendant and judgment was rendered thereon against plaintiff, a motion for a new trial was denied, exceptions taken and plaintiff brings error.

The plaintiff claimed to be the owner and entitled to the immediate possession of the property by virtue of a written contract, which is as follows:

"30472.

"IDAHO. No. 19103.

"$ 130.00 SALT LAKE CITY, UTAH, May 2, 1903.

"On or before the 2 day of December, 1903, for value received in 1 No. 806 World buggy, Carmine gear, whip cord trim, No. 14 1/2 single harness, 1 whip and lap duster, hereafter called 'said property,' bought of Studebaker Bros. Co. of Utah, or either of us promise to pay to the order of said company, at its office in Salt Lake City, one hundred and thirty dollars, with 10 per cent interest per annum from date, 1903, until maturity, and if not paid at maturity the rate of interest shall thereafter be one per cent per month until paid, and reasonable attorney's fees, if placed in the hands of an attorney for collection.

"The express condition of this transaction is that the title or ownership of 'said property' does not pass from the said company until this note and interest shall be paid in full, and the said company has full power to declare this note due and take possession of said property, when it deems itself insecure, even before the maturity of this note; and it is further agreed by the makers hereof, that they will not sell or dispose of the said property except on the written order of said company. In case said company shall take possession of the said property it may at its pleasure sell the same at public or private sale without notice, and apply the proceeds on this note, or it may without sale endorse the true value of said property on the note, and....or either of us, agree to pay on this note any balance due thereon after endorsement, as damages and rental for said property; as to this debt we waive the right to exempt, and property, real or personal, we now own or may hereafter acquire, by virtue of any homestead or exemption law, now in force or that may hereafter be enacted. I agree to pay 15.00 per month and cash 15.00 down.

"Postoffice Farmington.

)..miles north.

SAMUEL MAHAN.

County c/o Bp. Secrest,

)..miles south

HENRY SECRIST.

Davis

)..miles east

State

Utah.

)..miles west

) of postoffice."

The defendant denied plaintiff's ownership and alleged that he had, in good faith, for a valuable consideration and without knowledge or notice of plaintiff's claim, purchased said property from Samuel Mahan in Uinta County, Wyoming.

The facts as they...