Case Name: P. M. LYNCH et al. v. SABLE-OBERTEUFFER-PETERSON, Inc.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1927-10-18
Citations: 122 Or. 597
Docket Number: 
Parties: P. M. LYNCH et al. v. SABLE-OBERTEUFFER-PETERSON, Inc.
Judges: Rand, C. J., and Brown and Belt, JJ., concur.
Reporter: Oregon Reports
Volume: 122
Pages: 597–605

Head Matter:
Argued September 21,
reversed October 18,
rehearing denied November 29, 1927.
P. M. LYNCH et al. v. SABLE-OBERTEUFFER-PETERSON, Inc.
(260 Pac. 222.)
For appellant there was a brief over the names of Mr. Walter G. Hayes and Mr. A. E. Clark, with an oral argument by Mr. Clark.
For respondents there .was a brief and oral argument by Mr. Will H. Masters.

Opinion:
COSHOW, J.
Parties to a conditional contract of sale may specify the terms of adjusting their differences in case the buyer becomes delinquent. It is not necessary for the seller to resort to court in order to repossess the automobile and sell the same where the contract authorizes the seller so to do: Standring v. Gordon, 118 Or. 339, 345, 346 (246 Pac. 361). The contract in the instant casé provides:
"In case of default in the payment of any amount due as above provided, of if the undersigned shall be guilty of any breach of any of the other agreements of the undersigned herein, the second party is authorized to enter any place where said property may be found, and take and remove the same, or any property found in or attached to said property, and retain all of the same, and likewise retain all sums paid in part performance of this contract, as compensation for any depreciation or other expense arising on'account of the use of said property by the undersigned, and as payment for the use of said property, and as liquidated damages for breach of this agreement, and elect any legal or equitable remedy for recovering the balance of the purchase price. ' '
The "undersigned" referred to in the foregoing excerpt are the plaintiffs and the "second party" is the defendant. When the defendant therefore took the car in its possession and canceled its contract with the plaintiffs for the sale of said automobile defendant elected its remedy for the delinquency of plaintiffs under the authority of Standring v. Gordon, above. This closed the transaction. Defendant became the owner of the car freed from the equity of plaintiffs therein. Plaintiffs forfeited their interest in the car and all other rights under the contract of purchase. The contract of purchase was introduced by plaintiffs as a part of their case and shows on its face that it was canceled on the day after plaintiffs claim the car was taken from them by defendant.
This court has twice or more adopted as the law in this state under contracts of sale the rule laid down in 1 Mechem on Sales, Section 615. Defendant exercised its option designated No. 1 in that rule which reads as follows:
"(1) He may treat the contract as rescinded upon default of the buyer and recover the goods. In that event, that is his only remedy." Francis v. Bohart, 76 Or. 1, 5 (143 Pac. 920, 147 Pac. 755, L. R. A. 1916A, 922); McDaniel v. Chiaramonte, 61 Or. 403 (122 Pac. 33).
Plaintiffs rely upon a claim that defendant promised to hold the automobile after it repossessed itself thereof as security for the unpaid purchase price. Plaintiffs claim that defendant so promised to hold said automobile for plaintiffs until the tenth day of September. They allege in their complaint that this promise was made for a valuable consideration. Careful reading of the testimony, however, fails to disclose any consideration for the alleged promise relied upon by plaintiffs. The sole testimony of this feature of the ease is an interview between one of the plaintiffs and the president of de fendant on a street in the City of Portland. There is no testimony of anything- of value having- passed between them at that time. Plaintiffs do not claim that they paid any amount as earnest-money. If the alleged agreement was supported by any consideration this court would be bound by the verdict of the jury. But inasmuch as there was no consideration for the promise on the part of defendant to so hold the automobile its promise cannot be enforced in law. The complaint shows on its face that the title thereto was vested in the defendant. This court held in Jeffries v. Pankow, 112 Or. 439 (223 Pac. 745, 229 Pac. 903), that yielding possession of an article by a delinquent buyer under contract of sale was no consideration for a bailment. Plaintiffs did nothing they were not bound by their contract to do when they surrendered the ear to the defendant. There was then no consideration at all for the promise to resell the automobile to the plaintiffs for the unpaid balance of the purchase price. Jeffries v. Pankow is a very similar case to the one at bar and is controlling so far as the matter of consideration for the alleged promise to hold the car for the benefit of plaintiffs is concerned.
Another case relied upon by plaintiffs is Manley Auto Co. v. Jackson, 115 Or. 396 (237 Pac. 982). The plaintiff in that case repossessed itself of the automobile which had been sold to defendant under a contract exactly like the one involved in the instant case in so far as the remedy of the seller is concerned. In addition to taking possession of the automobile upon the delinquency of the buyer the seller brought suit to foreclose any interest the buyer had therein. In other words, the seller proceeded under the fourth option of the rule laid down in 1 Mechem on Sales, Section 615. Said fourth option reads as follows:
"He may, if the contract permits it, without rescinding, take possession of the goods and hold them as security for the fulfillment of the contract."
Defendant could have followed that course in the instant case. Instead it retook possession of the automobile and canceled the contract. It thereby exhausted its remedy against plaintiffs. Plaintiffs ought not to complain because defendant did not hold the car as security for the unpaid purchase price and bring suit to recover on the notes given by plaintiffs binding them to pay the price of the automobile with the attendant costs and disbursements. That a car depreciates materially when once sold and used is of such common knowledge that the court may take judicial notice thereof. If the amount of depreciation was involved proof would be required of the extent of the depreciation. But the court can properly recognize that an automobile materially depreciates when once sold and used. Doubtless plaintiff's would have been losers if defendant had pursued the course followed by plaintiff in Manley Auto Co. v. Jackson, above. In such procedure plaintiffs would become liable for all costs, disbursements and expenses, including attorney's fees, incurred in a foreclosure suit and public sale, and also for personal judgment for any amount remaining of the purchase after application of the net proceeds of the sale of the automobile. There is no reasonable probability that the automobile would have sold for as much as the balance of the purchase price. In all probability in addition to losing the amount paid on account of the purchase for which they had the use of the automobile, plaintiffs would have suffered a personal judgment against them of no inconsiderable sum.
By the terms of the contract the accessories attached, to the car by plaintiffs were forfeited with the car. The motion for a directed verdict should have been sustained. The judgment is reversed and the case remanded, with directions to proceed in accordance with this opinion.
Reversed and Remanded. Rehearing Denied.
Rand, C. J., and Brown and Belt, JJ., concur.