Case ID: abbn-cas_15/html/0388-01.html
Source: Caselaw Access Project
Author: {"author": "Daniels, J. Davis, P. J.[Concurring.] \n      Brady, J.[Dissenting.]", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PUFFER v. REEVE.
    
      N. Y. Supreme Court, First Department, General Term ;
    
    January, 1885.
    Replevin.—Sale ; conditional ; lease of chattel ; title of BONA FIDE PL’BCHASER.
    A lease of a chattel for a specified term, at an agreed rent¡ payable in installments, for which notes were given, and further providing that, upon full payment of the notes, the title to the chattel should vest in the lessee, but that upon default ih payment of any note, the lessee’s right to possession should cease, with full power in the lessor to retake possession of the chattel,—Held, to be nothing more than a conditional sale, no title passing to the lessee until payment of all tile rent, so that a purchaser from him for value and without notice of the agreement, acquired no title to the chattel as against the owner.
    Appeal from a judgment for the defendant, after trial at special term without a jury.
    Alvin D. Puffer sued Walter F. Reeve, to recover possession of a soda-water apparatus delivered to one Bell by plaintiff under an instrument called a lease.
    The lease was in the following form : “Know all men by these presents, that 1, A. W. Bell,. . . have hired, leased and received of A. D. Puffer,. „ . for the term, to wit: — years, — months, ending October 1st, 1878, subject to the conditions herein stated, the following described goods and chattels : [describing them] and I do promise and agree with the said A. D. Puffer, his representatives and assigns, to pay him or them for the possession and reasonable use thereof, for said term, the sum of eleven hundred and fifty-two dollars, as rent, to be paid, old apparatus, four hundred and fifty-two dollars, balance in the installments set forth in the several notes given by me therefor, as follows: [enumerating the notes] and it is provided that said property hereby leased is not to be removed from the premises where now located,. . . nor the interest of the lessee under this lease to be transferred without the consent of said A. D. Puffer in writing thereto first obtained.
    “ And it is further provided, that upon the full pay-' ment of the several notes aforesaid, all claim and title to said property on part of said Puffer shall cease, and the whole title shall vest in said lessee as owner. But upon any breach of the provisions of this lease, espec-' ially upon failure by the said lessee to pay the several notes or either of them as they become due and pay-; able, then this lease and any and all claim of right on the part of said lessee under the same, or to the further use and possession of said property, shall be thereby terminated, and the said A. D. Puffer may thereafter at any time enter the premises where said property may be and resume possession of the same without process of law or let or hindrance from the lessee; and such of the aforesaid notes as mature after said. Puffer has resumed possession of said property shall be taken and held to be void, and returned to the lessee upon demand.”
    Bell made default in payment, and after various mesne transfers, the defendant purchased the soda-water apparatus, and paid a fair price therefor. At the time of the purchase he had no notice of any rights of plaintiff.
    The complaint was dismissed at the trial, and from the judgment entered thereon, plaintiff appealed.
    
      Charles De Hart Brower {Alfred Steckler, attorney), for the plaintiff, appellant.
    The so called lease was an executory contract of sale. A vendee under such a contract cannot convey a good title even to an innocent purchaser for value (Boon v. Moss, 70 N. Y. 465, 473 ; Ballard v. Burgeth, 40 N. Y. 314 ; Austin v. Dye, 46 N. Y. 500; Story on Sales, § 457 [a]; Benjamin on Sales, § 437; Walker v. Mitchell, 25 Hun, 527 ; Kohler v. Hayes, 41 Cal. 455; Hallowell v. Milne, 16 Kan. 65 ; Price v. Jones, 3 Head [Tenn.) 86 ; Cole v. Berry, 13 Vroom [N. J.] 308; Tibbet v. Towle, 12 Me. 341; Clayton v. Heister, 80 N. C. 275; Singer Co. v. Graham, 8 Oregon, 19; Corse v. Tregent, 11 Mich. 65; Coggill v. N. Y. & N. H. R. R. Co., 3 Gray, 545 ; Bailey v. Harris, 8 Iowa, 331 ; Summer v. Cottey, 71 Mo. 121; Bradshaw v. Warner, 54 Ind. 58 ; Forbes v. Marsh, 15 Conn. 384; Clark v. Wells, 45 Vt. 4; Sanders v. Keber, 28 Ohio St. 630; Sargent v. Gill, 8 N. H. 325 ; Goodell v. Fairbrother, 12 R. I. 233 ; Goodwin v. May, 23 Ga. 205; Ketchum v. Brennan, 53 Miss. 596; Aultman v. Mallory, 5 Neb. 178; Corse v. Patterson, 6 H. & J. 153 ; Walker v. Hyman, 1 Ont. Ap. R. 345). Hintermeister v. Lane, 27 Nun, 497, is not controlling, as the transaction there set forth was not a case of conditional sale.
    
      A Simmis, Jr., for the defendant, respondent.
   Daniels, J.

This action was brought to recover possession of a soda-water apparatus, which was designated as the “ Druggist’s Pride.” The plaintiff, by an instrument dated June 27, 1876, delivered it to A. W. Bell, for $1,152, accepting in part payment an old apparatus for which a credit was given of $452, the balance to be paid in installments, by several notes which were stated in the contract.

It was provided in the instrument, that, upon full payment of the several notes, all claim and title to the property on the part of the plaintiff should cease, and the whole title vest in the lessee as owner ; but that upon a breach, the possession of the property should terminate, and that the plaintiff might enter the premises where the property might be, and resume the possession of the same, without process of law and without let or hindrance from the lessee. The amount due upon the notes was stated to be $234.32, with interest, no part of which had been paid.

Mr. Bell sold the apparatus to Mr. Crawford, who paid the plaintiff $150 on account of the debt due upon it. Crawford sold it to William S. Schieffelin & Co., and they sold it to defendant, of all of which the plaintiff had notice. The defendant purchased the apparatus for a valuable consideration, and without any notice of any claim of title to it in the plaintiff. The delivery of the property by the plaintiff was not alone conditional, as it was in Comer v. Cunningham (77 N. Y. 391), but the title itself was conditional on the final and complete payment to be made by the purchaser. The transaction was no more than a conditional sale, the title remaining in the plaintiff until complete payment should extinguish the condition. That never was made, and the default entitled1 the plaintiff to recover the possession of the property under the authority of Ballard v. Burgett (40 N. Y. 314) ; and Austin v. Dye (46 Id. 500).

The judgment should be reversed and a new trial ordered, with costs to abide the event.

Davis, P. J.[Concurring.]

Upon the facts of this case as shown by the evidence, there was no sale of the property with a conditional delivery, but an agreement to sell upon the performance of the conditions stipulated in the written instrument.

The property, meanwhile, was to be held under the lease made between the parties, which entitled the lessee to possession and the right of use, so long as he paid the stipulated installments of rent, but on default his right of possession and use at once was to terminate, with full power on the part of plaintiff to retake possession.

This instrument was not in the nature of a mortgage or mere security for the payment of installments to fall due on a purchase, and need not therefore be filed as a mortgage. No title vested or could vest in the lessee till, by the terms of the contract, by payment of the rent, the contract was to terminate by a transfer of title at that time.

I think the case is within the authorities cited by Justice Daniels, and not those relied upon by the respondent’s counsel. I think, therefore, that the judgment should be reversed.

Brady, J.[Dissenting.]

The learned justice in the court below came to the conclusion that the legal rules applicable to the transactions between the different parties were enunciated in Hintermister v. Lane (27 Hun, 497) and the recent decision of the court of appeals in Comer v. Cunningham (77 N. Y. 391) and the cases cited in the opinion of the court in that case; and his judgment rests upon the proposition necessarily that this was a sale and purchase and not a bailment of personal property with the privilege to the bailee to purchase. It cannot be distinguished from the case of Hintermister v. Lane {above), in which a Swiss organ was leased, to be paid for by notes, the payment of which, at maturity, was to be a receipt in full against the instrument; and upon the further proposition enunciated as evolved from an examination of the cases in Comer v. Cunningham {above), that where there is a sale and delivery, though the delivery between the parties is conditional, a bona fide purchaser from the vendee obtains a good title.

It will have been observed, that there was no arrangement between the original parties for the sale and purchase of the apparatus, that the vendee or lessee should pay anything for the use of it. In Austin v. Dye (46 N. Y. 500) the principle of the decision, which seems to be in conflict with the views herein stated and those of Judge Lawrence,- was that one having possession of personal property as bailee, with an executory and conditional agreement for its purchase, the condition not having been performed, could give no title to a purchaser, although the latter acted in good faith and parted with value without notice of a want of title. But, as said in Comer v. Cunningham {above), in that case the vendee was to pay hire for the oxen until he should pay a specified sum in a specified manner in lumber, and then he was to become the owner. In this case it will have been observed, also, that the greater part of the sum agreed upon for the apparatus was paid, indeed, nearly half of it at the time the contract was executed.

It is not necessary to examine any of the exceptions, for the reason that the judgment herein was pronounced upon the abstract proposition that there was a salé and delivery of the property under circumstances such as to shield an innocent purchaser without notice from any claim that might be asserted oñ' the part of the.plaintiff. The views of Justice Lawrence are adopted, and the judgment appealed from is affirmed, with costs.

Judgment reversed; new trial ordered. Costs to abide, the event.

Note.—Aside from statutory enactments, the rule is well settled in most of the States that a contract of sale of personal property accompanied by immediate delivery to the buyer, but. providing that the title shall not pass until certain conditions are performed, such as full payment of the price, does not enable the buyer to confer title before payment upon even a bona fide purchaser for value. Ballard v. Burgett, 40 N. Y. 314 ; Coggill v. Hartford, etc. R. R. Co., 3 Gray (Mass.) 545; Boon v. Moss, 70 N. Y. 465; Nash v. Weaver, 23 Hun, 513; Loomis v. Martin, 10 Weekly Big. 18; Wood v. Barr, 9 Id. 411; Austin v. Dye, 46 N. Y. 500; Powell v. Preston, 1 Hun, 513;Fitzgerald v. Fuller, 19 Hun, 180; Cole v. Berry, 13Vroom (N. J.) 308; S. C., 36 Am. R. 511; Singer M’f’g Co. v. Graham, 8 Oreg. 17; S. C., 34 Am. R. 572, 575; Schouler's Pers. Prop. § 294 et seq. But the contrary is held in some States. Stadtfeld v. Huntsman, 92 Penn. St. 53; and that the property may be seized on execution by creditors of the buyer. Brunswick, &c. Co. v. Hoover, 95 Penn. St. 508.

That such contracts of sale are not within the statutes .requiring chattel mortgages, or any instrument intended to operate as such, to be filed, to be good against subsequent purchasers, &c., was decided in Rogers Locomotive Works v. Lewis, 4 Dill. Cir. Ct. 158; the court saying : “It may be that the registry laws, if wisely framed, ought

to extend to such a case as this, and to require the seller to place the evidence of his rights on record, and accordingly we find that some of the States have recently passed enactments of the character suggested.”

In this State, by L. 1884, c. 315, § 1, it is provided as follows; “In every contract for the conditional sale of goods and chattels, hereafter made, which shall be accompanied by an immediate delivery and followed by an actual and continued change of possession of the things contracted to be sold, all conditions and reservations which provide that the ownership of such goods and chattels is to remain in the person so contracting to sell the same, or other person than the one so contracting to buy them, until said goods or chattels are paid for, or until the occurring of any future event or contingency, shall be absolutely void as against subsequent purchasers and mortgagees in good faith, and as to them the sale shall be deemed absolute, unless such contract for sale with such conditions and reservations therein, or a true copy thereof shall be filed as directed in the succeeding section of this act.” The remaining sections provide as to the place of filing, refiling, discharge, &c. as in the case of chattel mortgages.

This statute has not yet been the subject of any reported decision. It was doubtless intended to place the title reserved to the seller in a contract of conditional sale of chattels upon the same footing as that of a mortgagee of chattels.

The few reported decisions upon similar statutes in other States construe such enactments strictly, and hold them applicable only to cases clearly within the letter of the act.

Under the Wisconsin statute (Rep. St. 1878, § 2317),—“provid-ing that no contract for the sale of personal property, by the terms of which the title is to remain in the vendor and the possession thereof in the vendee, until the purchase price is paid or other conditions of sale are complied with, shall be valid as against any other person than the parties thereto and those having notice thereof, unless such contract shall be in writing subscribed by the parties, and the same or a copy thereof shall be filed," &c.,—it was doubted whether a contract like that in the case in the text, purporting to be a lease with a right to purchase, was within the act. Kimball v. Post, 44 Wis. 471. The statute must be construed as designed to protect creditors of the vendee, or persons claiming title to or interest in the property from Mm, where the contract is not filed, and it does not protect mere trespassers. Kimball v. Post (above)-, Bunny. Valley Lumber Co., 51 Wis. 376. If the contract is not filed, the property affected by it in possession of the buyer is liable to seizure as his property. Williams v. Porter, 41 Wis. 422.

The Nebraska statute (Comp. Stat. 1881, c. 32, p„ 290, § 26) expressly covers the case of a lease like that in the text, as it provides that “ no sale, contract or lease, wherein the transfer of title or ownership of personal property is made to depend upon any condition, shall be valid against any purchaser or judgment creditor of the vendee or lessee in actual possession, obtained in pursuance of such sale, contract or lease without notice, unless the same be in writing, signed by the vendee or lessee, and a copy thereof filed,” with an affidavit setting forth “ the full and time interest of the vendee or lessor therein.”

By the Minnesota statute (L. 1873, c. 65, § 1 [Glen. Stat. § 39, p. 531, § 15] ) it is provided “every note of hand, or other evidence of indebtedness, or contract, the conditions of which are that the title or ownership to the property for which said note or other evidence of indebtedness, or contract is given, remains in the vendor, shall be absolutely void as against the creditors of the vendee, and as against subsequent purchasers and mortgagees in good faith, unless the note, or other evidence of indebtedness, or contract, or true copies thereof, or if said contract be oral, then a memorandum expressing the terms and conditions thereof, be filed as, hereinafter provided.”

The North Carolina Code, §1375 (L. 1888, c. 343) provides: “All conditional sales of personal property in which the title is retained by the bargainor, shall be reduced to writing and.registered in the same manner, for the same fees and with the same legal effect as is provided for chattel mortgages.”

The Maine statute (Rev. Stat. of 1883, c. Ill, § 5 ; L. 1874, c. 181) provides: “No agreement that personal property bargained and delivered to another, for which a note is given, shall remain the property of the payee until the note is paid, is valid, unless it is made and signed as a part of the note; and no such agreement, although so made and signed in a note for more than thirty dollars, is valid, except as between the original parties to said agreement, unless it is recorded like mortgages of personal property.” This act applies only where a note' is given, and hence, the buyer’s order directing the seller to ship the chattel bought, “ for which I agree to pay” a certain sum at a specified time, “ the same remaining the property of the sellers, till payment,” is not within the statute, as it is not a note for the payment of the chattel, and though not recorded the seller may reclaim the property from a purchaser of the buyer before he had acquired title by payment of the price. Morris v. Lynde, 73 Me. 88.

Where the plaintiff gave a written permit to cut logs from his land, reserving and retaining “full and complete ownership and control of all lumber, which shall be cut and removed,” until sums due for the stumpage should be fully paid, it was held, that this was not a conditional sale of the logs within the statute. Crosby v. Redman, 70 Me. 56, 
      
       Otherwise now by statute. See note at the end of this case.