Witherspoon v. Choctaw Culvert & Machinery Co.

• Decision Date: 29 February 1932
• Docket Number: No. 9268.,9268.
• Citation: 56 F.2d 984
• Parties: WITHERSPOON v. CHOCTAW CULVERT & MACHINERY CO.
• Court: U.S. Court of Appeals — Eighth Circuit

56 F.2d 984 (1932)

WITHERSPOON v. CHOCTAW CULVERT & MACHINERY CO.

No. 9268.

Circuit Court of Appeals, Eighth Circuit.

February 29, 1932.

A. F. House, of Little Rock, Ark., for appellant.

George B. Pugh, H. T. Harrison, and Thomas S. Buzbee, all of Little Rock, Ark., for appellee.

Before KENYON, VAN VALKENBURGH, and GARDNER, Circuit Judges.

GARDNER, Circuit Judge.

The appellee as plaintiff brought this action at law to recover from the appellant as defendant the possession of certain machinery referred to in the record as a gasoline shovel, with certain accessories and appliances. The action was one in replevin, and the property involved was taken under a writ of replevin.

For convenience the parties will be referred to as they appeared in the lower court.

On the 15th of December, 1928, plaintiff entered into a contract with the Arkansas General Construction Company for the sale of the property involved in this action. By the terms of this written contract, the Arkansas General Construction Company as purchaser agreed to pay for the machinery purchased the sum of $11,304.61, of which amount it paid in cash at the time of the execution of the contract $1,032.61, and gave plaintiff its twelve promissory conditional sales notes, each for the sum of $856, maturing, one on or before the 15th of March, 1929, and one on or before the 15th day of each month thereafter until all were paid or otherwise collected in rents, "provided, however, the maturity and payment of interest and principal of said notes are conditioned as follows, to-wit:

"If the purchaser at any time before the maturity and payment of all of said notes or as they may be extended, shall not have work requiring the use of said shovel and equipment, he may give seller written notice of that fact, whereupon the seller shall have the right to lease said shovel and equipment to some other person or persons, for the benefit of purchaser, at a rental of not less than One Thousand Dollars ($1,000.00) for one month, Eight Hundred Fifty Dollars ($850.00) for one to three months, and Seven Hundred Dollars ($700.00) for every period longer than three months, applying the monthly rentals on the monthly notes; but if said machine and equipment cannot be rented upon such terms, maturity of the deferred purchase money notes will be extended or postponed by the seller until such a time as that the machinery can be rented.

"It is understood and agreed that if seller cannot rent said machinery within six months after being notified by purchaser to rent it, the purchaser may thereafter use said machinery without the payment of rentals or purchase money installments, provided if while so using it, seller shall have an opportunity to rent it, the purchaser will either then surrender the machinery to seller, to the end that it may be rented, or will, at its election resume the payments of the monthly purchase money notes and retain the use of the shovel.

"It is further understood and agreed that interest on the deferred purchase money notes will cease at the expiration, of eighteen (18) months from the date purchaser gives seller written notice of the fact that it wishes to rent the shovel. Any of the purchase money notes running beyond that period, whether paid by the purchaser or by rents, will not after said period of eighteen (18) months, bear interest.

"The maturities of the deferred purchase money notes may be extended from time to time if agreed to between the purchaser and seller, but, in all events, any unpaid notes at the time of notifying seller of the fact that the shovel is available for rent will be automatically extended to conform to this agreement and rents collected.

"It is understood that when the seller rents the shovel to some third parties that the purchaser will be required to leave it with the third parties until their rent agreement has expired or until the rent agreement is otherwise canceled. It is understood that the rentals collected will be collected in advance and that the form of lease agreement will be that form that is ordinarily used by the seller in renting equipment, except that it will be sure to contain a provision that if the shovel is placed on work that is impractical or too abusive for the shovel to handle, then it is agreed that the lease contract is cancelled and the shovel returned to the purchasers. In event of this question of abuse or type of work, the parties to determine the question will be bound by arbitration.

"The deferred notes will have written or stamped thereon, `Subject to the provisions of the written contract of December 15th, 1928.'

"The title to the above described property shall not pass by delivery to the purchaser, but it is expressly retained by and shall remain vested in the seller until the entire purchase price as above set out has been paid in full. However, when the shovel is not actually rented, the same will be in the possession of the purchaser. * * *

"It is understood that the purchaser will pay the rental notes when using the machine providing seller wishes to use it and also providing that it is within a period of six months from the time purchaser is notified that the shovel is available for rent. It is also understood as herein other places provided for that if the shovel is not rented within six months of the date that it is available for rent, then the purchaser can use the same without making any payments thereon, but while using same without making any payments thereon if seller notified purchaser that they have secured a bona fide offer of lease contract, purchaser will release shovel or resume monthly payments."

The machinery was delivered to the purchaser, Arkansas General Construction Company, about the time of the date of the contract, and there had been paid on the purchase price approximately $8,500, which included the notes payable in January, February, March, April, and May. At the time of the maturity of the June note an extension of the remaining notes was granted, and thereafter, pursuant to provisions of the contract, the purchaser gave plaintiff written notice that the shovel was available for rent, and called upon it to rent the same for the credit of the purchaser. This the plaintiff did not do, but under date September 5, 1929, wrote the president of the purchaser, inquiring as to the location of the machine, stating that it wished to know "where to carry prospective customers to rent this machine and show it to them."

Thereafter, the exact date of which does not appear in the record, in a suit brought in the United States District Court for the Eastern District of Arkansas, wherein Home Accident Insurance Company was plaintiff, and the Arkansas General Construction Company was defendant, a receiver was appointed of all the property of the Arkansas General Construction Company, with power to demand, sue for, collect, and take possession of all properties, credits, and rights of every description belonging to said corporation. By the order of his appointment, the receiver was allowed six months from the date of his appointment within which to elect to adopt or continue in force, or refuse to adopt or continue in force, any lease or contract not fully performed and pending, but the order provided that none of the receiver's acts or omissions in the performance or failure to perform such contracts should constitute or be considered an election to adopt or an estoppel to renounce any of them.

On the 11th of December, 1929, the receiver, pursuant to order of court, sold to the defendant in this action all equity of the Arkansas General Construction Company in and to the machinery, subject to the lien of the plaintiff for the balance of the purchase price, the purchaser to assume performance of all conditions of the contract under which the machinery was sold. The defendant paid the receiver $1,087.50 as the purchase price, in addition to assuming the performance of all conditions of the contract, and the receiver transferred to her all right, title, and interest of the Arkansas General Construction Company in and to the property, together with all the right, title, and interest of said company in and to the contract of purchase for said property, and covenanted that the property was clear from any claim of the creditors of the company, except the claim of the Choctaw Culvert & Machinery Company. After the purchase of the machinery, defendant notified plaintiff by letter dated December 21, 1929, that she had purchased the equity of the Arkansas General Construction Company in the shovel and contract, and that the shovel had been moved to Little Rock, where it could be better cared for. This letter contains the following paragraph: "Please bear in mind that it is still available for rent, and that it can be shown to prospective customers for its rental at anytime."

A jury being waived, the action was tried to the court, and the issue determined in favor of plaintiff. From this judgment defendant has appealed, contending that under the undisputed evidence judgment should have gone in her favor.

There is no dispute in the evidence, and hence only questions of law are presented. The action, being one in replevin, is strictly a proceeding at law; and the issue to be determined was plaintiff's right to immediate possession, and the question of title is only pertinent as it may bear upon the right of...