Case Name: HENRY L. TATUM et. al., Respondents, v. ALBERT H. ACKERMAN, Appellant
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1905-12-15
Citations: 148 Cal. 357
Docket Number: S. F. No. 2991
Parties: HENRY L. TATUM et. al., Respondents, v. ALBERT H. ACKERMAN, Appellant.
Judges: 
Reporter: California Reports
Volume: 148
Pages: 357–364

Head Matter:
[S. F. No. 2991.
In Bank.
December 15, 1905.]
HENRY L. TATUM et. al., Respondents, v. ALBERT H. ACKERMAN, Appellant.
Sale on Credit—Premature Action for Purchase Price.—Where a sale of personal property is made on an unconditional term of credit, not obtained by fraud or based upon a consideration which has failed and which has not been waived, the seller cannot maintain an action on the contract to recover the purchase price until the expiration of the term of credit, notwithstanding the buyer attempted to repudiate the contract in toto and refused to accept the goods.
APPEAL from a judgment of the Superior Court of the City and County of San Francisco ahd from an order refusing a new trial. Thomas F. Graham, Judge.
The facts are stated in the opinion of the court.
Naphtaly, Freidenrich & Ackerman, for Appellant.
J. P. Langhorne, for Respondents.

Opinion:
ANGELLOTTI, J.
This action was brought to recover $1,581.98 and interest, in which sum, it was alleged in the complaint, the defendant "became and was indebted to plaintiffs . . . for and on account of goods, wares, and merchandise sold and delivered by plaintiffs to defendant." The allegations of the complaint were specifically denied by the answer, and, in addition, a breach of warranty was alleged,— viz., that an engine, which was one of the articles sold, failed to satisfy the plaintiffs' warranty,—and thereupon the defendant had rescinded the purchase and had attempted to return the engine to the plaintiffs. It appeared upon the trial that defendant, upon the alleged ground as to the breach of warranty as to the engine, refused to accept or keep any of the merchandise sold and delivered to him, but shipped all the articles from Usal, California, to San Francisco, addressed to the plaintiffs. Plaintiffs refused to receive the goods back from the defendant, but attached them on tho institution of this action. On the trial defendant did not introduce any proof as to the alleged breach of warranty, and the court found that the engine was as represented by the plaintiffs. The merchandise had been sold by the plaintiffs to the defendant upon a credit of sixty days from September 24, 1900. This action was commenced within said sixty days,—viz., on the fifth day of November following,-— but the court found that the defendant had refused to keep the merchandise and had shipped it back to the plaintiffs, with the intention of abandoning and repudiating his purchase thereof, and that he did repudiate such purchase, and that prior to and at the time this action was commenced he did not intend to pay plaintiffs at any time or at all for the said merchandise, and gave' judgment for plaintiffs as prayed for in their complaint. This appeal is taken from the judgment and from an order denying defendant's motion for a new trial.
The contention on this appeal is that the action was prematurely brought,—that an action upon the contract of sale for the purchase price of the articles sold could not be maintained until the expiration of the time of credit allowed thereby,—and this contention presents the only question to be determined. It is, of course, not disputed that where goods are sold on credit an action cannot ordinarily be maintained for the purchase price until the term of credit has expired. Until such time the obligation to pay has not matured, and there has been no breach of contract as to payment. But it is alleged that the credit here was conditioned upon the acceptance of the goods by the vendee, and his payment for them at the expiration of the term of credit, and that by his refusal to accept he necessarily waived the condition as to credit, and in effect declared that he did not intend to pay for the goods at all. The stipulation here as to credit was absolutely unconditional, unless such a con dition as is here claimed is necessarily implied in every contract of sale upon credit where no condition is expressed in the contract, for it is not claimed that there was any such express condition in the contract under consideration. We know of no rule of law that will warrant us in holding that such a condition may be so implied from the mere sale of goods on credit, and no case is cited supporting any such theory. In the American note in Bennett's Benjamin on Sales (7th ed. p. 795) the rule is stated as follows, viz: "If credit was unconditionally given by the contract, an action 2or the full price cannot be maintained under any circumstances before the time of credit has expired. Such action affirms and counts upon the very contract of sale, time of credit included. The fraud or insolvency of the buyer, or abandonment of the contract does not alter the term of credit." Mechem states the rule in substantially similar terms, declaring that, by his action for the price, the vendor affirms the contract and must affirm it as an entirety. (Mechem on Sales, secs. 1410, 1411.) Some authorities hold that where the .credit was obtained by fraud the stipulation as to credit may be alone rescinded, and an action brought at once for the price. These cases regard the credit stipulation as an independent one, capable of rescission by itself where it was induced by fraud, without disaffirmance of the sale. Such is the well-settled rule in New York (see Heilbronn v. Herzog, 165 N. Y. 98, [58 N. E. 759], and in some other states [43 Cent. Dig. sec. 990]). But this doctrine can, of course, have no application to a case where there was no fraud at the time the contract was made.
It appears to be universally recognized that where the credit is unconditional, if it was not obtained by fraud, or based upon a consideration which has failed, or has not been waived, an action will not lie on the contract for the purchase pric'e until the expiration of the term of credit. (See 24 Am. & Eng. Ency. of Law, 2d ed., p. 1122.) Here, as we have seen, the credit was unconditional, and there was no fraud. Nor was there any express consideration for the credit. The credit was undoubtedly given in consideration of the purchase of the goods by the defendant, but plaintiffs, maintaining an action on the contract for the price, and insisting upon the contract, are not in a position to insist that this consideration has failed. Nor was there any waiver of the credit. An attempted repudiation of the contract in foto by the vendee is no waiver of the single stipulation as to credit. The plaintiffs refused to acquiesce in such repudiation and insist that the contract shall be enforced according to its terms, which they have the right to do, but they have no right to make a new contract for the defendant. If, against the will of the vendee, the contract is to stand, the vendee may still insist that it shall stand according to its terms. Construing the refusal to keep the goods and their return as notice on the part of the defendant that he would not pay upon the expiration of the term of credit, plaintiffs are not relieved from the effect of the stipulation as to credit. Section 1440 of the Civil Code, relied on by them, has no application to cases where performance is not yet due upon the part of the party who has previously given notice that he will not perform when such performance is due. In such cases, when performance on his part is due, and not before, if such notice has rmt been retracted, the other party may enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party. Such is the whole effect of this section. (See in this connection Keller v. Strasburger, 90 N. Y. 379.)
As contended by plaintiffs, there can be no doubt of the right of a vendor, where the vendee refuses to take the goods sold and delivered, and repudiates the contract, to elect to treat the contract of sale as still in full force, and the goods as belonging to the vendee, and to sue on the contract for the entire contract price. But this does not mean that he may sue for the contract price before it is due according to the terms of the contract, and we have not been able to' find any case so holding. The case of Brady v. Isler, 9 Lea (Tenn.) 356, is precisely in point. There the vendee abandoned possession of the goods, and the vendor repossessed himself thereof, and elected to resell the goods and sue for the difference between the price received upon the resale and the contract price. The action was brought before the expiration of the term of credit, and it was held that the action was premature and must fail. The court said: "It will be observed that no part of the purchase money was due at the time of the resale of the goods. And in such case the vendee has not been guilty of any breach of the contract as to payment, although he may be in default in respect to his refusal to receive the goods, or, rather, in the abandonment of their possession." The court further, in effect, said that in the aspect of the case contended for by plaintiff, that the contract was valid and subsisting, the money was not due upon it when suit was brought, and that it is essential that it should be due before suit is brought to enforce the collection. We see in this case no possible answer to the objection that the action was brought to recover money alleged to be due upon a contract, before it became due under the terms of the contract. Upon the repudiation of the contract by the vendee, the vendors might-have elected to keep the property as their own and at once sue for damages on account of the breach, but this action cannot, under the most liberal rules as to construction of pleadings, be held to be such an action. It was simply and solely an action on the contract for the purchase price, based upon the promise of defendant to pay, and the evidence shows without conflict that, according to the terms of the contract, the liability had not accrued at the time the action was commenced.
The judgment and order denying the new trial must be reversed, and it is so ordered.
Shaw, J., McFarland, J., Lorigan, J., and Henshaw, J., concurred.