Court Opinion

ID: 7967362
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:51:50.532956+00
Date Added: 2024-06-11T16:34:40.885363
License: Public Domain

Dickinson, J.
Both these parties are corporations. In the year 1889 the .defendant obligated itself by contract to. pay to the plaintiff certain specified sums of money, amounting to a little more than $1,000, in consideration of the publication of certain advertisements by the plaintiff for the defendant. It was, however, expressed in the contract that such payment should be made “out of the proceeds out of the sale of the first plow,” which meant out of the proceeds of the first snow plow that should be sold by the defendant This action is for the recovery of the amounts thus agreed upon. The defense is that no snow plow was ever sold, that no pro*130ceeds of a sale of a plow were ever received, and hence' that by the very terms of the contract the defendant is not liable.
Some nine months after the making of the contract the defendant entered into a contract with the Southern Pacific Railroad Company, which was evidenced by a writing, by the terms of which, for the expressed consideration of $16,000, the receipt of which by the defendant was acknowledged, the latter “licensed and empowered” the railroad company to manufacture, for its own use, the Cyclone Steam Snow Plow, for which the defendant was declared to hold letters patent from the United States. . It was further declared that for the same consideration the Cyclone Steam Snow Plow Company “hereby lets unto the said Southern Pacific Company, for ninety-nine years from the date hereof, the snow plow known as ‘Cyclone Steam Snow Plow No. 1,’ now in service on the lines of railroad of said Southern Pacific Company: provided, always, that said Southern Pacific Company shall, within reasonable time from the date hereof, rearrange the machinery thereon, or make or cause to be made thereon such alterations and improvements as in the judgment of the officers of the said Southern Pacific Company may be required to perfect said plow for the work for which it was designed; and that said Southern Pacific Company will, within a reasonable time, furnish unto said the Cyclone Steam Snow Plow’ Company copies of the plans, designs, and specifications of any rearrangements, alterations, and improvements that said Southern Pacific Company may adopt.”
The snow plow referred to in this instrument was delivered to the railroad company. It was the first and the only snow plow ever manufactured by the defendant or under its patents. The court found this transaction to be a sale. We concur in this conclusion, notwithstanding the employment of the technical language of a lease, which, standing alone, might import a bailment rather than a sale. Neither the technical meaning of terms, nor the name by which the parties may characterize their transactions, are allowed to prevail overthq real intention manifest from the whole instrument or agreement. There was oral evidence going to show that the defendant and the railroad company sought to put the contract in the form of *131a bailment rather than a sale, merely for the purpose of enabling the defendant to avoid its obligation to the plaintiff, which embraced the sale of a plow as a condition respecting the time of payment'. Such evidence was admissible in favor of this plaintiff, who', not being a party to that contract, nor standing in privity with the contracting parties, was not concluded by the terms which they had employed as evidence of their agreement. Van Eman v. Stanchfield, 10 Minn. 255, (Gil. 197;) Sanborn v. Sturtevant, 17 Minn. 200, (Gil. 174.) The defendant might show that the parties employed language to conceal, rather than to evidence, the real nature of the "transaction.
This oral evidence is supported, and its credibility strengthened, by the inherent improbability of the parties having really intended a bailment of this property for the period, of 99 years, with the right in the bailee during that time to use, alter, rearrange, or improve the machine according to its own judgment. The absence of any provision for the preservation and return of the property may also be noted. The improbability that the plow — a complex mechanical structure, including an engine and machinery for its own operation— would endure for so long a period seems to be so great that it is not reasonable to suppose that the defendant could have contemplated any benefit from the property, either to itself or its assigns, after the lapse of the 99 years.
It may be added that the term of the so-called “letting” was not qualified by any condition. The railroad company was not required to do anything to the plow as a condition of retaining the property. "What it did undertake to do should be regarded as a mere personal agreement, and not a condition.
If this was intended by the parties as being practically a transfer of the property for the consideration expressed, and the form of a bailment or letting was adopted for the purpose above referred to, or for any other purpose, but without intending by such means to secure a return of the property, it should be treated-as a sale, for the purposes of this case. It would be a “sale,” within the fair meaning of that word as used by these parties in fixing the condition in their contract with respect to the payment, and which is recited at the commencement of this opinion.
(Opinion published 51 N. W. Rep. 657.)
While the case shows the payment of $16,000, as specified in the writing above recited, it does not show that any part of this sum was particularly agreed upon as the price or consideration for the snow plow, and it is to be assumed that there was no apportionment; that is, that this sum was the entire consideration for the sale of the snow plow and of the patent rights. It was probably for this reason that the court below considered that the plaintiff was not entitled to recover. But in our view it does not prejudice the plaintiff’s case that the defendant, in selling the snow plow, included also other property, an entire gross price being received for the whole. The defendant obligated itself to pay a specified sum for services performed, but it was added that this was to be paid “out of the proceeds of the sale of the first plow.” It was bound by that agreement; bound to thus appropriate the proceeds of the first sale of a plow. If the defendant disabled itself from performing this contract obligation by making a gross sale, including other property with the plow, for a gross sum, so that it cannot be shown what price was received for the plow alone, the liability to pay the stipulated sum to the plaintiff became at once absolute. The defendant made the sale, and it cannot escape liability on the plea that it chose to make it in such a manner that no definite price can be said to have been paid for the plow alone. The liability having thus become absolute, it is unnecessary to consider whether, under other circumstances, the liability of the defendant would have been limited in amount to the sum received for the first sale of a plow.
With reference to the fourth assignment of error, it is enough to say that, in excluding the opinion of the witness as to how long such a plow would last if properly constructed, the court intimated that the question should be how long this plow would last, which, as is conceded, was not properly constructed. The ruling was right, for the question was based upon an hypothesis contrary to the fact.
Order reversed.
Mitchell, J., by reason of sickness, did not take part in the hearing or decision.