Case Name: Port Huron Machinery Co., Limited, v. Ivan Hurto, Appellant
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1912-03-14
Citations: 154 Iowa 435
Docket Number: 
Parties: Port Huron Machinery Co., Limited, v. Ivan Hurto, Appellant.
Judges: 
Reporter: Iowa Reports
Volume: 154
Pages: 435–440

Head Matter:
Port Huron Machinery Co., Limited, v. Ivan Hurto, Appellant.
Sales: reservation of title: recovery of price: tender. Recovery-may be had for the purchase price of goods sold on a contract, containing no right of rescission, but reserving the title to the seller until the price is paid or satisfactorily secured, even though the order had been countermanded and the purchaser refused to accept and pay for the goods; and upon such refusal formal tender is not essential to recovery.
Appeal from Polk District Court. — Hon. W. H. McHenry, Judge.
Thursday, March 14, 1912.
Action to recover the contract price of a machine that the defendant agreed to purchase. Judgment for the plaintiff; the defendant appeals.
Affirmed.
A. L. Steele, for appellant.
Dunshee & Haines, for appellee.

Opinion:
Sherwin, J.
The parties hereto entered into a written. contract, of which the following is a copy:
Dated at Laurel, 3-25-1910.' To the Port Huron Machinery Co., Ltd., Des Moines, Iowa: You may deliver on board cars at Port Huron, Mich, on or about Palmer, la., and ship for me in your care to Laurel, la., county of Marshall, and state of Iowa, the following mentioned goods: One 33x54 Port Huron secondhand separator, complete price, $350.00. Title: The title to said goods shall remain in the company -until the purchase price is paid or satisfactorily secured. Undersigned will receive the machinery, pay the freight and charges, and pay the company at Des Moines, Iowa, on or before the arrival of said machinery, the sum of - dollars in the following manner, viz.: Cash on delivery, $ — —-—. Note .due Dec. 15th, 1910, $175.00. Note due Dec. 31st, 1910, $175.00. Notes to bear interest at 7 percent from date of delivery of the machinery until paid. Payable at-. Undersigned will furnish satisfactory security for the prompt payment of the notes in the following manner: Chattel mortgage on the above described machinery, and also mortgage on the following property free from encumbrance.
On the 27th day of March, 1910, the plaintiff duly accepted this order and notified the defendant that the machine could be shipped at any time it was convenient for the defendant to receive it. On the 10th of May, 1910, the defendant countermanded the order in writing, and later the plaintiff shipped the separator to the: defendant at Laurel, Iowa, and tendered the same to him. He, however, refused to accept and refused to pay for the same, or to execute his notes therefor as he had agreed. The appellant contends that, because the vendor retained both the title and possession, there was no completed sale; and hence there can be no recovery of the contract price: The authorities generally are not agreed on the question whether there can be a recovery of the contract price where the contract is not fully executed by the transfer of title; but it is the general holding that the mere retention of possession by the vendor is not material. There may be a little confusion in our own cases on the question whether the retention of title by the vendo,r necessarily remits him to an action for damages alone, because of language used in one or two opinions. But we think an examination of the cases wil] show that, where the issue was directly involved, we have never held that in such cases there can not be a recovery of the contract price; while, on the contrary, we have directly held that such recovery can be had, although neither title nor possession have passed to the vendee.
In McAlister v. Safley, 65 Iowa, 719, a written order for a granite monument was given to the' plaintiff's assignors, Webster & Williams, by the defendant and accepted by said Webster & Williams. Before anything had been done by Webster & Williams toward completing the monument, or delivering it, the defendant notified them that she would not receive it, and requested them not to complete it. It was also shown that at the time the contract was entered into Webster & Williams were the owners of the monument and had it in their possession, and that it was wholly completed, except the cutting of the inscription that had been directed by the defendant. On the facts as above recited, this court said: "On this state of facts, we think there can be no question of defendant's liability for the contract price of the monument. It may be conceded that the contract was executory, and that the property in the monument did not vest in defendant upon the execution and delivery of the written agreement. But neither of the parties reserved a right of rescission. Defendant's undertaking to pay the stipulated price was contingent on the single condition that Webster & Williams would cut the inscription on the monument, deliver it at Traer, and set. it up at the grave of her husband. She agreed absolutely that upon the happening of these conditions she would pay the price agreed upon at the stipulated time. There was no failure on their part to perform their undertaking. She therefore had no grounds for rescinding the contract." The "law will not permit one party to an agreement to terminate it at his pleasure, unless the right to do so is reserved in the contract itself."
In Moline Scale Co. v. Beed, 52 Iowa, 307, while the facts there do not bring it on an exact parallel with this case, it was said that the true rule in cases of executory contracts is "that, where everything has been done by the vendor which he is required by his contract to do, and the manufactured property, in its completed condition, is tendered to the purchaser, and he refuses to receive it, and it is held by the vendor for the purchaser, the vendor may recover the contract price." See, also, McCormick H. M. Co. v. Markert, 107 Iowa, 340; Redhead Bros. v. Investment Co., 126 Iowa, 410.
In White v. Solomon, 164 Mass. 516 (42 N. E. 104, 30 L. R. A. 537), the court, through Judge Holmes, said: "The main question is whether the judge who tried the case ought to have ruled that the plaintiffs are not entitled to recover the price of the article in question, but must offer evidence to the court upon the question of damages for the alleged breach of said contract. A majority of the court is of the opinion that this ruling properly was refused. We assume in favor of the defendant, but without deciding, that the title of the manikin did not pass by delivery at the express office, but that assumption does not dispose of the case. In an ordinary contract of sale, the payment and the transfer of the goods are to be concurrent acts; and if the buyer refuses to accept the goods, even wrongfully, he can not be sued for the price, because the event on which he undertook to pay the price has not happened; and, although the fact that it has not happened is due to his wrong, still he has not promised to pay the price in the present situation, but must be sued for his breach of contract in preventing the event on which the price would be due from coming to pass. . . . But in the case at bar the buyer has said in terms that, although the title does not pass by the delivery to the ex*press company, if it does not, delivery shall be the whole consideration for an immediate debt of the whole value of the manikin, and that the passing of the title shall come as a future advantage to him, when he has paid the whole." It was further said in the same case that it was not illegal for a man to contract for the whole value of a chattel before title passes, and that he may so bind himself, if he so desires. See, also, Tufts v. Griffin, 107 N. C. 47 (12 S. E. 68, 10 L. R. A. 526, 22 Am. St. Rep. 863).
In Mechem on Sales, section 549, it is said that the title condition in such a contract is for the benefit of the vendor, and may be waived. The time when the title passes is immaterial, where a binding contract to sell and purchase is made. Mechem on Sales, section 564; Benjamine on Sales.
We know of no valid reason why a buyer may not contract to do what this appellant did; that is, to execute his notes when the separator was delivered, and let the vendor retain the title until the price was paid, or satisfactory security given. The effect of such a contract is not materially different from giving back security after possession has.passed to the vendor. We think there was a valid and sufficient tender. But, in any event, the defendant positively refused to receive the separator, and a tender was therefore unnecessary. McCormick H. M. Co. v. Markert, supra.
It is also said that there was error in entering judgment, because the term of credit agreed upon had not expired when suit was brought. This point was not made below, and hence can not be- urged here. It appears from the record, however, that the term of credit had expired when the judgment was entered, and the defendant is not prejudiced, because the term had not expired when the suit was brought. We are of the opinion that the judgment of the district court is right, and it is therefore affirmed.