Court Opinion

ID: 7366681
Source: CourtListenerOpinion
Date Created: 2022-07-27 23:52:19.888253+00
Date Added: 2024-06-11T16:20:47.229982
License: Public Domain

ON REHEARING.
de GRAFFENRIED, J.
1. In the above opinion we called specific attention to the following: First, that the stock, the subject of the sale, was in existence when the sale was made; second, that the stock, the subject of the sale, was specifically identified to the same extent as if it had been a well-lmoion horsej third, that the exact price of the particular stock was fixed by the parties when the sale was agreed upon; fourth, that a part of the purchase price was paid in cash. The above being true, the contract of sale was an executed, not an executory, contract. The seller, so long as he retained- possession of the stock, had a lien upon the stock for the unpaid purchase money, but he also had his right of action therefor.
“The sale of a specific chattel on credit, though that credit may be limited to a definite period, transfers the property in the goods to the vendee, giving the vendor a right of action for the price, and a lien upon the goods, if they remain in his possession, till that price be paid.” The above quotation is taken from the language of Lord Denman, C. J., in the leading case of Martindale v. Smith, 41 Eng. Common Law Reports (1 Adolph & Ellis, N. S.) 593; s. c., 1 Q. B. 395. In that case ¡reference is made to the case of Tarling v. Baxter, 6 B. & C. 360, in which the same principle is announced. “Where there is a sale of goods generally, no property in them passes until delivery, because until then the very goods *173sold are not ascertained; but where, by the contract itself, the vendor appropriates to the vendee a specific chattel-, and the latter thereby agrees to take that specific. chattel, and to pay the stipulated price, the parties are then in the same situation as they toould be after a delivery of goods in pursuance of a general contract.” Parke, J., in Dixon, et al. v. Yates, Kaye, Bond, and Proctor, 5 B. & Ad. 313. The above quotations from Martindale v. Smith, supra, and Dixon, et al. v. Yates, Yayne, Bond, and Proctor, supra, completely cover this case. They speak in plain language the law, and show, conclusively, that, in a case presenting the facts of the instant case, a tender on the part of the vendor is not a necessary prerequisite to a suit by him for the purchase price. — Benjamin on Sales (7th [Bennett’s] Ed.) 791.
“The principle at common law is that the goods have become the property of the buyer, and that the vendor has agreed to take for them the buyer’s promise to pay the price. If, then, the buyer fail to pay, the vendor’s remedy is limited to an action for the breach of that promise; the damages for the breach being the amount of the price promised, to which may be added interest.” —Benjamin on Sales, supra.
“It is said that when the contract of sale is complete, and the vendee does not take away the goods, the vendor may recover the price in indebitatus assumpsit, as the law does not require therefor that complete delivery or that actual receipt which would be necessary to defeat the vendor’s lien for the price, or his right of stoppage in transitu, or which would be required to take the case out of the statute of frauds. And more recently it has been declared that there may be a bargain and sale of goods sufficient to transfer the title, and thus to support an action for goods bargained and sold, with*174out any such delivery as will amount to a transfer of possession.” — Newniark on Sales, § 223.
“There may he a bargain and sale of goods sufficient to transfer title, and thus to support an action for goods bargained and sold, without any such delivery as Avill amount to a transfer of possession. The former is quite consistent with the vendor’s retaining a lien for the price, and thus retaining possession till the price is paid.” — Frazier v. Simmons, 139 Mass. 531, 2 N. E. 112.
“Thus Avhen the contract of sale is complete, and the vendee does not take away the goods, the vendor may recover the price in indebitatus assumpsit. The law does not require that complete delivery, that actual receipt of the goods, which will be necessary to defeat the vendor’s lien for the price, or his right of stoppage in transitu, or Avhich would be required to take the case out of the statute of frauds.” — Morse v. Sherman, 106 Mass. 430.
It seems clear that when there has been a sale of a specific chattel, and the title has passed from the seller to the buyer, then unless the seller, by the terms of the contract of sale, is under a duty to the buyer to deliver possession to the buyer at some place other than the place of business of the seller, it is the duty of the buyer to call for the article at the place of business of the seller and there pay for it and accept it. If he fails to do so, then the seller may bring his action against the buyer for goods bargained and sold. At common law there Avas much technical, difference between an action for goods bargained and sold and an action for goods sold and delivered, and the distinctions Avhich the common-law judges drew between the two forms of action, and Avhich they so thoroughly understood, have led to confusion, at times, in courts where a different or a less exacting system of pleading obtains. Courts, we *1751 hink, sometimes have attempted to apply — or have actually applied — -principles applicable only to an action for goods sold and delivered to an action for goods bargained and sold, and have thus brought about confusion as to ivhen an action may by a seller be brought against a buyer for the price of goods sold before the actual receipt by the buyer of the goods. If A. goes into the store of B. and select a particular hat and agrees to pay B. $8 for it, and pays B. $1 down on it, then the hat at once becomes the property of A. If A. leaves the hat with B. and promises to come back and get it, but fails to.do so, B. owes A. no further duty, with reference to the hat, except to keep it for him. B. is under no duty to take the hat to the house of A. and tender the hat to him. If A. fails to come for the hat, then B. may bring his action for goods bargained and sold, for the balance due on the hat. If, on the other hand, when A. buys the hat and pays B. a dollar down on it, the understanding is that B. is to send the hat to the house of A. and there deliver it and receive the balance of the money, then, while the title passes, B. does not become entitled to his money, or his action for goods bargained and sold, until he carries the hat to A.’s house and there tenders the hat to A. and demands his money. In such a case B.’s complaint against A. for goods bargained and sold must allege a tender by B. of the hat under the terms of the contract. Under the above facts, if B. had sued A. for goods sold and delivered, a common-law judge would not have permitted him to recover, because he would have held that there had been no delivery. The same judge, however, would have permitted a recovery in an action for goods bargained and sold.
While the distinctions drawn by common-law courts were sometimes narrow, they were founded upon rea*176son. These judges stood close to the fountains of justice, and when the form of action was appropriate, these judges required no allegation in a complaint which reason did not support. They only required that a tender of the specific article sold should be alleged in a complaint for goods bargained and sold, when the contract of sale contemplated that after the sale the seller should deliver the article to the buyer at the buyer’s residence, or at some place other than the seller’s place of business. When the form of the action was for goods sold and delivered, then, unless a delivery was shown, no recovery could be had, for in such form of action, as is said in Noy’s Maxims, quoted approvingly by Benjamin in his work on Sales (4th Amer. Ed.) § 314: “If I sell my horse for money I may keep him until I am paid, but I cannot have an action of debt until he be delivered, yet the property of the horse is by the bargain in the bargainee or buyer.” When, however, the form of the action was for goods bargained and sold, then the rule that “the sale of a specific chattel on credit, though that credit may be limited to a definite period, transfers the property in the goods to the vendee, giving the vendor a right of action for the price, and a lien upon the goods, if they remain in his possession, till that price be paid,” which we have above quoted in the language of Lord Denman in Martindale v. Smith, supra, was applicable, and was applied by the courts. Of course, if the contract of sale required the plaintiff to carry the article to the defendant and make a delivery of it at some point other than the plaintiff’s place of business, then it was necessary for the plaintiff to show in his complaint that he had made a tender of the article, and that the defendant had failed to receive and pay for it, or show some reason why a tender had not been made. — 2 Mechem on Sales, § 1674.
*1772. “In respect of the place of delivery, where no place is agreed npon by the parties, it is the general rule that the articles sold are to be delivered at the place where they are at the time of the sale. The store of the merchant, the shop of the manufacturer or mechanic, and the farm or granary of the farmer, etc., must be the place where the demand and delivery are to be made when the contract is silent as to the place.” — 2 Mechem on Sales, § 1124.
In the original opinion we pointed out that a mere delivery of the certificate of the capital stock of a corporation is sufficient to pass the legal title from the vendor to the vendee if such delivery is intended to operate as a transfer of the title to the stock from the vendor to the vendee. This proposition was announced in Duke v. Cahawba Nav. Co., 10 Ala. 82, 44 Am. Dec. 472, and has repeatedly been upheld by the later decisions of this court. — Fisher v. Jones, 82 Ala. 117, 3 South. 13; Campbell v. Woodstock Iron Co., 83 Ala. 351, 3 South. 369; Thompson v. Hudgins, 116 Ala. 93, 22 South. 632. In other words, it is the settled law of this state that in order to pass the legal title and ownership of stock in a corporation from one person to another, no more formality is required than is required in the transfer of title to any other sort of personal property from one person to another. — Thompson v. Hudgins, supra. Such stock is a mere chattel the title to which may pass by delivery merely, just as the title to any other chattel may pass by delivery merely.
The above being true, the original complaint, given a reasonable construction favorable to the plaintiff, as it should in this proceeding be construed, is a declaration for the price of chattels bargained and sold. It not only shows a bargain and sale, but it shows a demand for the price with an offer, not only to deliver the stock, but it *178goes further than that, it shows that the plaintiff has offered to transfer and assign said stock to the defendant. The complaint, as originally filed, was sufficient to support a judgment, but it may have been subject to demurrer because of its failure to allege that the plaintiff was still willing to deliver and to transfer and assign to the defendant the said stock. This demurrable defect the amendment was intended to supply, and did in fact supply. In other words, the original complaint was for the price of goods bargained and sold, and so is the complaint as amended.
Construing the allegations of the complaint both as originally filed, and as amended, favorably towards the plaintiff, as it is our duty to do, the complaint in its original and amended form is sufficient to support a judgment by default for the price of goods bargained and sold, and it is the settled law of this state when “a complaint is sufficient to support a judgment, a motion to set aside the judgment will not be granted, although the complaint may have been subject to demurrer properly filed.”- — O’Neal v. Simonton, 109 Ala. 167, 19 South. 412; Gordon v. Hood, Minor, 122; Turnipseed v. Burton, 4 Ala. App. 612, 58 South. 959.
3. Undoubtedly the rule, as stated by Mr. Cook in his work on Corporations (volume 1 [6th Ed.], 335), that “a person who is under contract to sell and deliver shares of stock may fulfill the obligation on his part by tendering to the vendee certificates of stock, duly indorsed by himself, and containing a power of attorney authorizing the vendee to obtain a registry of the transfer on the corporate books” meets the requirements of the laws of practically all the states.
In the instant case the stock was already sold, and the plaintiff was only under the obligation to deliver, and in his complaint he alleges' that he was ready and *179willing to “transfer and assign” the stock to the plaintiff, and that he had offered to do so. Under the. terms of the sale of stock in the instant case it was the duty of the defendant, after the plaintiff had made demand upon him for the purchase price of the stock and had offered to transfer and deliver the stock to him, to call on the plaintiff for the stock.
Mr. Thompson, in his work on Corporations (volume 4 [2d Ed.], § 4110) lays it down as a general rule that “an action cannot be maintained for the price of stock where there has been no repudiation of the contract unless a valid tender is made and kept good.” He says, however, in the very next section (viz., § 4111) : “Title to stock may vest short of full payment and delivery where that, is the intent of the parties to the contract. It has been held, under a provision in a contract for the sale of stock, to be paid for at a certain time, that the title passed to the purchaser at the time of the contract, though there was a separate agreement that the seller should retain the certificate as security for the price — ■ and he cites the case of Sherwood v. Graham, 106 Minn. 542, 118 N. W. 1011, in Avhich a recovery was had upon an executed contract of sale of stock, although no stock was ever delivered because, under the terms of the sale, no delivery was to be had until the purchase money was paid. In fact the sale of stock in a corporation in this state is like the sale of any other chattel, and is to be governed by the same rules as the sale of any chattel, viz., by the contract which is made by the parties themselves.
4. Many of our states have independent statutory regulations of their own governing the manner in which the title to stock in corporations may be transferred. In many stock transactions the regulations of boards of trade have entered into them and formed a part of *180them. It cannot, therefore, be expected that all of the decisions of courts of last resort upon the subject above discussed will be found to be uniform, or that a rule declared in one state has necessarily any application to a sale of stock in another state. The law of this state is as we have above declared it to be; and, so far as the particular transaction under discussion is concerned, the contract between the parties has the same degree of finality, and is governed by the same rules as would have governed it if the defendant, when he paid to the plaintiff the cash installment, had made to the plaintiff a promissory note, payable on demand, for the balance of the purchase price of the stock, and had left the stock in the possession of the plaintiff pending the payment of said note.
5. Confessedly the defendant owes the plaintiff the money for which the judgment in this case was rendered. The plaintiff confesses that the defendant owns the stock, and that he holds the stock for him. The defendant, upon the payment of the purchase money, will become entitled to demand of and receive from the plaintiff the stock to which the defendant already holds the legal title and the possession of which the plaintiff holds for the defendant.
What injury, in a legal sense, therefore, occurred to the defendant when the complaint in this case was amended we are unable to discover. In fact the amendment was but an assurance to the court and to the defendant that, when the judgment was taken, the plaintiff still held the stock for the defendant, and operated as an assurance to the court and the defendant that the plaintiff set up no claim to the legal title to the) stock, and that upon the payment of the judgment he could demand it of and receive it from the plaintiff.
The application for a rehearing is overruled.