Case ID: app-dc_47/html/0053-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justiee Robb", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOHN GILL & SONS v. KAHL-HOLT COMPANY.
    IÍEOOKDATION' OF lABTKUMESTS; CoNDITIOJS AL SALES; LlEXS; ASSIGNMENTS; EVIDENCE; TltlAI.; AlU’EAL AND EliKOK.
    1. As see. 547, D. G. (.’ode {3J íátat. at L. 1275, chap. 854), providing that an unrecorded conditional bill of sale shall not be valid as against ihird persons "acquiring title to said property from said purchaser without notice of the terms of said sale,” restricts the rights of property by regulating its use, its scope may not be broadened by construction.
    2. The rights of an assignee to after-acquired property of his assignor, in accordance with the terms of the assignment, are subordinate to the rigid s of one who thereafter sells and delivers property to the assignor, under an oral conditional sale agreement, by the terms of which no title passed until the purchase price was paid. (Construing sec. 547, J). C. Code.)
    3. It is not incumbent upon a party to introduce his book entries upon an issue about which there is no real dispute; and where such entries are within the reach of his adversary, it is not error for the trial court to refuse to permit the latter to comment to the jury upon their nonprodudion.
    4. Where the record on an appeal showed that, through inadvertence, the judgment appealed from, as well as the verdict upon which it was entered, were made to include a defendant against whom no judgment was sought, and the matter was not brought to the attention of the trial court, or made the subject of an assignment of error in this court, the judgment was reversed as to such party, but without costs.
    No. 3026.
    Submitted October 5, 1917.
    Decided November 12, 1917.
    Hkarixo on an appeal by two defendants from a judgment of the Supreme Court of the District of Columbia, on verdict, in an action of replevin.
    
      Reversed as to one appellant and affirmed as to the other.
    
    The Court in tbe opinion stated the facts as follows:
    This appeal [by John Gill & Sons, a corporation, and W. G'. Cornell Company, a corporation] is from a judgment in tlie supremo court of the District for the appellee, the ICahl-IIolt Company, a corporation, plaintiff below, sustaining its claim of title, under an unrecorded conditional sale agreement, to certain material furnished by it to a subcontractor.
    
      Note. — On assignment or transfer of purchaser’s interest under a conditional sale, see note in 40 D.Tt.A. (N.S.) S73.
    
      The appellant W. G. Cornell Company was the general contractor to furnish and install heating and ventilating systems and the plumbing and electric lighting for the new Washington city postoffice. About February 3, 1912, Samuel O. Bevans entered into a subcontract with the Cornell Company to do the sheet metal work in connection with the heating and ventilating. This subcontract provided that in certain named contingencies the contractor should be at liberty to terminate the employment of the subcontractor “and to enter upon the premises and take possession, for the purpose of completing the work under this contract, of all materials, tools, and appliances thereon. . .
    The appellee, the Kahl-IIolt Company, of Baltimore, Maryland, verbally agreed to furnish Bevans with the necessary material for use in performing his subcontract; but this material was to remain the property of appellee until erected in the building, and was to be paid for as fast as Bevans was paid for the amount of work done, “all material which might be left on the job” to be returned at the expense of the appellee. In-short, as the jury found, the sale was conditional.
    Subsequently, on May 8, 1912, Bevans made application to the Maryland Casualty Company for a bond to guarantee performance of his contract with the Cornell Company. The application provided that, in consideration of the execution of the bond, should Bevans fail to complete the work covered by the bond or in the event of any default on his part, he assigned, transferred, and conveyed to the casualty company, as of the date of the application, all his right, title, and interest in and to all the tools, plant, and equipment, and material of every nature and description that he might then or thereafter have upon said work or in or about the site thereof.
    About five carloads of galvanized sheet iron were shipped by the Kahl-IIolt Company to Bevans, and the last lot shipped in October of 1913 was not paid for and is involved here.
    
      In November of 1913 a dispute arose between Bevans and tbe Cornell Company, which finally resulted, in the discontinuance of work by Bevans. Thereupon the Cornell Company directed its foreman to seize, all material which Bevans had upon the site of the work. Appellee, the Ivahl-IIolt Company, asserted its right to the material which it had shipped to Bevans and which he had “left on the job.” The Cornell Company' thereupon informed the "Maryland Casualty Company of the situation, and was authorized by that company to seize this; material for it and in its name, wliich the Cornell Company did. Immediately thereafter this suit was brought, which resulted in a verdict for the material or its value, $911.20, with i merest.
    lit the first assignment of error it is alleged that the court erred “in refusing to grant the motion of the defendant to direct a verdict in favor of the defendants.” The contentions put forward under this assignment are that the Casualty Company was in the relation of a bona fide purchaser with respect to the material replevined, and lienee that its authorization to the Cornell Company put the latter company' in lawful possession of the material; that the Cornell Company, hv the terms of its contract with Bevans and by the evidence, was in the relation of a bona fide purchaser for value with respect to such material, and hence that its title was superior to that of the appellee.
    The charge of the court-, to which no exception was taken, submitted to tbe jury the question as to the character of the sale by appellee to Bevans, and by the verdict it is settled that the sale was a conditional one. The court further properly submitted to the jury' the question whether the Cornell Company “advanced money to Bevans not due him, hut advanced it, on the strength of his apparent ownership of this property,” and that question likewise was determined against this appellant. The only question which we may consider under this assignment, therefore, is whether the rights of the Casualty Company' and the Cornell Company', as assignees of Bevans, were superior to those of his conditional vendor, the appellee. Appellants' contention that they' are is based upon sec. 541 of our Code, which provides that an unrecorded conditional hill of sale shall not bo valid as against third persons "'acquiring title to said property from said purchaser without, notice of the terms of said sale.”
    
      Mr. Chas. A. Douglas, Mr. Hugh II. Ob ear, Mr. Chas. S. Douglas, and Mr. Jo. V. Morgan for the appellants, in their brief cited:
    
      Arbuncle v. Kirkpalrick, 98 Tenn. 221; Benjamin, Sales, Rule 23, p. 80; Chamber v. Greemoood, 68 N. Ii. 274; Clow v. Woods, 5 Serg. & R. 286; Concord Land & Water Power Co. v. Clough, 70 N. II. 627; De La Vergne Mach Co. v. Karrick; Hervey v. Ii. I. Loc. Co. 93 IJ. S. 664; Huntsman v. Nichols, 116 Mass. 521; Re .Robineau, 118 Fed. 473 ; Logan v. Monroe, 20’Me. 257; 1 Mackey, 34; Marsh v. Pier, 4 Rawle, 273; Marlin v. Mathiot, 14 Serg. & R. 214; M. R. 8. é D. Co. v. R. Co. 91’Wis. 447, 65 N. W. 176; Robb v. Glerson, 10 Serg. & R. 419; Rose v. Story, 1 Pa. 190; Root v. French, 13 Mend. 570.; Ryans v. Harper, 167 Mo. 342; Ryle v. Knole.s Loom Works, 87 Fed. 980; Thomp. Trials, § 989; Migmore, Ev. p. 3529; Wood v. U. D. F. & G. Co. 143 Fed. 424. ‘
    
      ■ Mr. Benjamin S. Minor, Mr. Hugh B. Rowland, and Mr. Colley W: 'Bell, for the appellee, in their brief cited:
    ' Bcuum v. Knabe & Co. 33 App. T). C. 240; De, La Vergne, Mach. Co. v. Karrick, 43 Wash. L. Rep. 290; Fosdick v. Schall, 99 U. S. 235; Johnsons. Tribby, 27 App. D. C. 281; Security Invest. Co. v. Garrett, 3 App. D. O. 69; United States v. New Orleans R. Co. 12 Wall. 362; Wood v. United States Fidelity & G. Co. 143 Fed. 424; Woolley v. Geneva Wagon Co. 59 N. Í. B. 278.
   Mr. Justiee Robb

delivered the opinion of the Court:

It is not denied that the agreement between appellee and Bevans was legal and valid as between them. By failing to have that agreement reduced to writing and recorded, appellee merely assumed tlio risk that a legal wrong, within the meaning of the statute, might be inflicted upon third parties, in other words, appellants’ rights are dependent upon and measured by the statute; and since this statute restricts the rights of property by regulating its use, its scope may not be broadened by construction. Woolley v. Genera Wagon Co. 59 N. J. L. 278, 35 Atl. 789. The statute under investigation in that case declared unrecorded conditional contracts of sale “absolutely void as against subsequent purchasers and mortgagees in good faith,” and creditors were held not to be within its protection. In Fosdick v. Schall, 99 U. S. 235, 25 L. ed. 339, a railroad company in Illinois had entered into a contract with “A,” whereby lie agreed to sell and deliver to it, at a price payable in instalments, a number of cars which, until they should be paid for, were to remain his property. Prior to this contract the company had mortgaged to “B,” as trustee, its franchise, issues, and protits, and all the property it then possessed or might thereafter acquire to secure the payment of certain bonds It was held that the lien of the mortgage did not attach to the cars upon their delivery to the company so as to defeat A’s reclamation of them as against the mortgagee. Under the ¡aw in Illinois such a transaction bad no validity as against third persons. The question therefore was whether the mortgagees occupied the position of third persons within the meaning of the Illinois statute. The court said: “They [the mortgagees] are in no sense purchasers of the cars. The mortgage attaches to the cars, if it attaches at all, because they are ‘after-acquired’ property of the company; but as to that class of property it is well settled that the lien attaches subject to all the conditions with which it is encumbered when it comes into the hands of the mortgagor. The mortgagees take just such an interest in the property as the mortgagor acquired; no more, no less. * * * The title of the mortgagees in this case, therefore, is subject to all the rights of Schall under his contract.” Again, in Myer v. Western Car Co. 102 U. S. 1, 26 L. ed. 59, where were involved the rights of a similar mortgagee, hut under the laws of Iowa which denied validity to an unrecorded conditional sale as “against- any creditor or purchaser of the vendee or lessee/’ the court held that the term “third person” as used in the Illinois statute was the same in legal effect as “creditor or purchaser” as used in the Iowa statute, saying: “In Fosdick v. Schall we held that the mortgagee whose mortgage embraced property to be acquired in the future was in no sense a purchaser of such property. Ilis rights were not granted after the property was bought by the mortgagor. lie got nothing by this provision in his mortgage except what the mortgagor himself had acquired. He paid nothing for his new security, lie took as mortgagee just such title as the mortgagor had; no more, no less.”

We see no difference in principle between the two cases determined by the Supreme Court of the United States and the one under consideration. The material here involved had not been delivered when the conditional assignments to appellants were made, and was brought within the scope of these assignments by the provisions relating to after-acquired property. When, therefore, Bevans defaulted under his subcontract and these conditional assignments became effective, the title of the assignees to the material here involved was subject to the conditions with which it was encumbered. In other words, appellants under their conditional assignments merely stepped into the shoes of Bevans, and their title as assignees was no better than his. The conditional assignments merely covered whatever interest he might have in this after-acquired material. It therefore cannot be said that these assignees are “third persons” within the meaning of the statute.

While the Kahl-Holt Company was introducing evidence, opposing counsel requested the production of its books, “so as to show what the books disclosed as to entries made of sales” to Bevans ; but the court suggested that if counsel wanted the books there was a proper way to get them. There the matter rested until, during the argument, counsel for appellants commented unfavorably upon the failure of appellee to produce its-books; and thereupon counsel for appellee objected, stating that the day following the call for them the. books were in court, but that no request was made for them. The court, suggesting that appellants were as much responsible for the failure ro introduce the books in evidence as was the appellee, declined to penult further comment. This ruling is here challenged as error. There was no real conflict in the evidence as to the character of the sale by tbe Kahl-Holt Company to Bevans, nor was the evidence that the material here involved had not been paid for disproved. In the circumstances, therefore, it was not incumbent upon the Kahl-Holt Company to introduce other evidence which was within reach of apjiellants, and such was the purport of the ruling of the trial court.

One more matter requires notice. Appellant John Gill & Sons was one of the general contractors on the postoffice work, but it developed at the trial that this firm was in no way interested in this suit. The court therefore instructed the jury, with the acquiescence of all parties, that “the only defendant against whom judgment is sought is the W. G. Cornell Company.” Evidently through inadvertence, however, the verdict and judgment were made to include Gill & Sons. While the record fails io show- that this matter was called to the attention of the trial court, or that it was made the subject of an assignment of error, the interests of justice so clearly demand that the mistake be rectified that we shall reverse the judgment as to this appellant, but without costs.

.Judgment reversed as to appellant John Gill & Sons and affirmed, with costs, as to appellant W. G. Cornell Company.