Van Ausdle Hoffman Piano Co. v. Jain

• Decision Date: 02 August 1924
• Citation: 228 P. 342,39 Idaho 563
• Parties: THE VAN AUSDLE HOFFMAN PIANO COMPANY, Appellant, v. C. L. JAIN, Respondent
• Court: Idaho Supreme Court

228 P. 342

39 Idaho 563

THE VAN AUSDLE HOFFMAN PIANO COMPANY, Appellant, v. C. L. JAIN, Respondent

Supreme Court of Idaho

August 2, 1924

CONDITIONAL SALE CONTRACT-WASHINGTON RECORDING ACT-STATUTE DOES NOT PROTECT EXISTING CREDITOR OF VENDEE-RIGHTS OF PLEDGEE WHERE TITLE TO PROPERTY PLEDGED NOT ACQUIRED BY PLEDGOR.

1. Under the Washington statute providing that a conditional sale contract be recorded (Rem. Comp. Stats., sec. 3790), as between the parties to the contract, the failure to record does not affect its validity, and a creditor in order to take advantage of such failure to record must show that he is within one of the classes which the statute protects. The statute does not protect creditors existing at the time the conditional sale was made.

2. Held, that the conditional sale contract in question in this case is valid as between the parties in the state of Washington, and also valid against defendant, since he was an existing creditor at the date of the sale.

3. Held, that title never passed to the vendee under the conditional sale contract.

4. Where title has never passed to the vendee under a conditional sale contract, but such vendee pledged the property to a creditor as security for a debt, the creditor acquired no right of possession as against the vendor, and the withholding of possession from the vendor is wrongful.

APPEAL from the District Court of the Second Judicial District, for Latah County. Hon. Edgar C. Steele, Judge.

Action in claim and delivery to recover possession of a piano sold under a conditional sale contract and pledged by vendee as security for a pre-existing debt. Judgment for defendant. Reversed.

Reversed and remanded, with directions. Costs awarded to appellant.

A. H Oversmith, for Appellant.

Recording laws have no extraterritorial force. (Montgomery v Wright, 8 Mich. 143.)

Title to movable property (with certain exceptions not applicable to the facts in the case at bar) is determined by the law of the state where the property is situated. (Harrison v Sterrey, 5 Cranch (U.S.), 588, 3 L.Ed. 104; Aultman Machinery Co. v. Kennedy, 114 Iowa 444, 83 Am. St. 373, 87 N.W. 435; Cronan v. Fox, 50 N.J.L. 417, 14 A. 119; Pyeatt v. Powell, 51 F. 551, 2 C. C. A. 367; Potter Mfg. Co. v. Arthur, 220 F. 843, Ann. Cas. 1916A, 1268, 136 C. C. A. 589; Pulaski M. Co. v. Haley, 187 Ala. 533, Ann. Cas. 1916A, 877, 65 So. 783; footnote, 64 L. R. A. 453; Wharton on Conflict of Laws, par. 355b; Baldwin v. Hill, 4 Kan. App. 168, 46 P. 329.)

The laws of the state where the property is situated govern, and the question as to whether or not a conditional vendor has complied with the laws of the state where the contract was made to protect his title against purchasers of the vendee is immaterial. (Weinstein v. Freyer, 93 Ala. 257, 9 So. 285, 12 L. R. A. 700; Studebaker Bros. v. Mau, 14 Wyo. 68, 82 P. 2; Lathe v. Schoff, 60 N.H. 34.)

If property is sold under a conditional sale contract where recording of contracts is necessary and the property is then removed to a state where it is unnecessary to record such contracts, the conditional vendor's title will be protected in the latter state. (Weinstein v. Freyer, supra; Marvin Safe Co. v. Norton, 48 N.J.L. 410, 57 Am. Rep. 566, 7 A. 418.)

Contracts should be construed according to the laws which the parties either expressly or presumptively incorporated into their contract. (Re St. Paul & K. C. Grain Co., 89 Minn. 98, 99 Am. St. 549, 94 N.W. 218; Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102, 27 L.Ed. 104; Pinney v. Nelson, 183 U.S. 144, 22 S.Ct. 52, 46 L.Ed. 125.)

Even at common law the situs of the property will govern as against the law of the place of residence of the owner of the property. (Dicey on Domicile. Rule 57, p. 266.)

C. J. Orland, for Respondent.

Where parties enter into a contract and by its terms fix the state or country under which the same is to be construed, the courts will determine the rights of the parties, under the laws of the state which they have agreed upon as governing the contract, not only as to its construction but as to its inherent validity. (Strawbridge v. Robinson, 10 Ill. 470, 50 Am. Dec. 420; McAllister v. Smith, 17 Ill. 328, 65 Am. Dec. 651; Mittenthal v. Musscagni, 183 Mass. 19, 97 Am. St. 404, 66 N.E. 425, 60 L. R. A. 812; 13 C. J., sec. 19; Remington's Comp. Stats. of Washington, 1922 ed., sec. 3790.)

A conditional sale contract of personal property is void and unenforceable against a third party who comes within the provisions of the Washington statute, unless the instrument or memorandum is filed within ten days from the taking possession by the purchaser, and a pledgee, under the law at the time of the making of this contract, was one of the parties protected. (American Multigraph Sales Co. v. Jones, 58 Wash. 619, 109 P. 108; Brady v. Bell, 94 Wash. 496, 162 P. 865; Springer v. Ayer, 50 Wash. 642, 97 P. 777; Eisenberg v. Nichols, 22 Wash. 70, 79 Am. St. 917, 60 P. 124; Chilberg v. Smith, 174 F. 805, 98 C. C. A. 513.)

When a chattel is sold under a contract executed in another state, whereby vendor retains the legal title until the price is paid, the laws of the state in which the contract is made will determine the rights of the parties. (In re Hager, 166 F. 972; Barret v. Kelley, 66 Vt. 515, 44 Am. St. 862, 29 A. 809.)

The lien claimed herein exists, if at all, by virtue of the laws of Washington, both by reason of its being made there and on account of the contract so providing, by the agreement of the parties to it, and if the lien is not valid under the laws of Washington, it is not valid in any other state. (Yund v. First Nat. Bank, 14 N.Y. 81, 82 P. 6; Smith v. Consolidated Wagon etc. Co., 30 Idaho 148, 163 P. 609.)

The courts universally require, in enforcing liens, under contracts made in other states, under the rule of comity, that such liens be valid in the state of their execution, and be recorded if by the laws of such state it be required. (Shapard v. Hynes, 104 F. 452, 45 C. C. A. 271, 52 L. R. A. 675; Kanaga v. Taylor, 7 Ohio 134, 70 Am. Dec. 62; Ord Nat. Bank v. Massey, 48 Kan. 762, 30 P. 124, 17 L. R. A. 127; Handley v. Harris, 48 Kan. 606, 30 Am. St. 322, 29 P. 1145, 17 L. R. A. 703; Nichols v. Mase, 94 N.Y. 162.)

JOHNSON, District Judge. McCarthy, C. J., and Budge and William A. Lee, JJ., concur. Wm. E. Lee, J., took no part.

OPINION

JOHNSON, District Judge.

--This is an action in claim and delivery, wherein the appellant sought to recover possession of a piano sold by appellant to one J. A. Mercer under a conditional sale contract. The respondent denied that appellant was the owner or entitled to possession of the piano and as a further and separate defense attempted to justify his possession by alleging in substance that the said J. A. Mercer transferred and delivered possession of the piano as a pledge and as security for the payment to the respondent of the sum of $ 750 loaned by respondent to the said J. A. Mercer, and he further alleged that appellant had not complied with the laws of the state of Washington governing the recording of conditional sale contracts. The case was tried before the court without a jury. Under the issues the only question to be determined is whether the appellant is entitled to the possession of the piano.

I. R. Van Ausdle, a member of the appellant company, testified that he negotiated with Mercer in Moscow, Idaho, on March 25, 1920, and that the contract was signed in Moscow and on the same day the piano was delivered to a transfer company for shipment from Spokane to Moscow. No further payment was made than is stated in the contract.

J. A. Mercer (colored) testified that he signed the contract at Moscow and received the piano at Moscow, Idaho.

C. L. Jain, respondent, testified that Mercer was a porter in his barber-shop; that he worked for Jain from May, 1919, to a short time after March 25, 1920; that Mercer wanted to borrow money of him to purchase oil stocks and put up the stock as security for the money. He thought that at this time he loaned him $ 350 and that Mercer then wanted more money but that he refused because he wanted more security. Mercer had previously talked to him about owning a piano in Spokane, and Mercer wanted to know if he would take the piano as security for more money. After Mercer had described the piano, Jain loaned him the money and a few days thereafter Jain asked him about the piano and why it was not being shipped. A few days elapsed and no piano showed up, and so "I asked him one morning why this piano wasn't coming, and he said he had had information from Spokane that a dray company in transferring this piano had dropped it and ruined it. I says, 'Is that dray company responsible?' 'Yes,' he says, 'they are.' 'Well,' I says, 'you can either make them get you another piano or pay for this one.' 'Yes,' he said, he would look after it. In a few days more, I can't tell how long a time, he said the dray company had purchased a new piano for him and would ship it and should be here the following Thursday, or some time the following week. The piano arrived, as he said it would; a new piano arrived at the Inland depot, and he and Mr. Williamson brought the piano and placed it in my house as security." He further testified that he had sold some of the stock and applied it on the note. That he had had a note signed by Mercer which he returned to Mercer when the renewal note introduced in evidence was executed later. That he never made any effort to find out whether or not Mercer owned a piano. He had Mercer's "word for it that he had a piano," and he never asked Mercer if the piano was paid for. That all the money was loaned to Mercer before the piano came.

Mercer further testified that when he first...