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2. TITLE RETAINED, BUT POSSESSION PASSED
Breach of Contract.-Where the seller has passed the possession to the buyer, even though it is agreed that title shall not pass to the buyer until payment has been made, the seller can still sue for damages for breach of contract in case the buyer fails to pay as agreed.
Recovery of Purchase Price.—But in such cases he may also sue the buyer for the agreed price itself, as distinct from suing to recover damages. This is different from the majority rule in cases where the seller has parted with neither possession nor title, as just dis.. cussed. The reason for this difference—that is, the reason why he can sue for the price despite his retention of title if he has given possession, but can not sue for it if he has not given possession is not clear.
The logical reason would be that the seller in giving possession to the buyer has given him a quid pro quo by which the debt of the buyer is created. This is the theory which the courts have expressly stated in many instances.28
28—This is very obvious in the fault of either party. The seller case of Burnley v. Tufts, 66 Miss. sued to recover the unpaid part 48. Tufts had sold to Burnley a of the purchase price and was held soda water apparatus, with the ex- entitled to the money. The court's press stipulation that title should opinion shows that possession was not pass until the price had been the consideration for the buyer's paid, and that if the payment were promise to pay, and not title, and not made at the times the install- that this consideration had been ments were stated to be due the executed. "Burnley," said the seller might retake possession of court, "unconditionally and absothe apparatus. It does not appear lutely promised to pay a certain that there was any stipulation that sum for the property, the possesthe buyer should have possession sion of which he received from till payment or default, but that Tufts. The fact that the property was obviously the intent of the has been destroyed while in his parties. The apparatus was de- custody and before the time for stroyed by fire, after several pay. the payment of the last note due, ments had been made, while in on payment of which only his the buyer's possession but without right to the legal title of the property would have occurred does not in futuro) of the whole value of relieve him of payment of the the manikin, and that the passing price agreed upon. He got ex- of the title shall come as a future actly what he contracted for, viz., advantage to him when he has the possession of the property and paid the whole. The words (in the the right to acquire an absolute contract) 'in consideration of its title by payment of the agreed delivery' are not accidental nor price. The transaction was some- insignificant. * * * If a man is thing more than an executory con- willing to contract that he shall be ditional sale. The seller had done liable for the whole value of a all that he was to do except to re- chattel before the title passes, ceive the purchase price; the pur- there is nothing to prevent his dochaser had received all that he ing so, and thereby binding him. was to receive as the considera- self to pay the whole sum. tion of his promise to pay." In When, as here, all the conditions White v. Solomon, 164 Mass. 516, have been complied with the perthe buyer had even refused to take formance of which by the terms of possession of the chattel. Before the contract entitles the vendors his refusal, however, the seller to the whole sum, if the vendors had delivered it to an express afterward have not either broken company for carriage to the buyer. the contract or done any act The buyer's contract provided that diminishing the rights given them "in consideration of its delivery in express words, the buyer can for me, freight prepaid, at the ex- not by an act of his own repudiatpress office specified below, I ing the title gain a right of repromise to pay the sum of (the coupment, or otherwise diminish purchase price)." The court his obligation to pay the whole stated the general rule, that a sum which he has promised." seller who still retains title, even Accd., Natl. Cash Register Co. v. though only because of the buyer's Hill, 136 N. C. 272, 68 L. R. A. refusal to accept it, is not entitled 100, similar to White v. Solomon, to the purchase price but only to and quoting it with approval; damages. But it then went on to Tufts v. Griffin, 107 N. C. 47, fol. decide that "in the case at bar the lowing Tufts V. Burnley; Natl. buyer has said in terms, that al- Cash Register Co. v. Dehn, 139 though the title does not pass by Mich. 406; Bierce v. Hutchins, 205 the delivery to the Express Com. U. S. 340; Gray v. Booth, 64 N. Y. pany, if it does not, delivery shall App. Div. 231; Amer. Soda Founbe the whole consideration for an tain Co. v. Vaughn, 69 N. J. L. 582, immediate debt (partly solvendum "The question to be determined is:
In other instances the seller has maintained his suit for the price without the court's having indicated any reason why he could do so. It may be that these courts have felt simply that the promise to pay, itself, created a debt and no executed consideration, or quid pro quo, was necessary. Or it may have been that inasmuch as possession was already with the buyer the seller could, by bringing his suit for the price, elect to pass the title to the buyer and that the buyer by not actively rejecting it would be presumed to have consented to it. This passage of title would then, of course, be the necessary executed consideration.29
What was the consideration of the note? If the passing of the title to the apparatus was the consideration, the defense must prevail. If the delivery of the apparatus, with the right to acquire title, was the consideration the plaintiff must prevail. We think the consideration for the note was the delivery of the apparatus with the right to acquire title.” Lancaster v. Southern Insurance Co., 153 N. C. 285; Harley v. Stanley, 25 Okla. 89; Roach v. Whitfield, 94 Ark. 448; Lavalley v. Ravenna, 78 Vt. 152; Dunlap v. Grote, 2 C. & K. 153; Boyer v. Ausburn, 64 Ga. 271, express agreement to pay in event of loss; Dederick V. Wolfe, 68 Miss. 500; Hollenberg v. Barron, 100 Ark. 403, even though seller had retaken possession at time of the sale; Marion Mfg. Co. v. Buchanon, 118 Tenn. 238; Whitlock v. Auburn Lumber Co., 145 N. C. 120, 12 L. R. A. (n. 8.) 1214; Kilmer V. MoneyWeight Scale Co., 36 Ind. Ap. 568.
29-A number of courts, apparently considering that the promise to pass title is the real consideration, refuse to allow the seller to recover the purchase price after the goods have been destroyed.
Bishop v. Minderhout, 128 Ala. 162, predicated upon the principle that the risk of loss follows title; Randle v. Stone, 77 Ga. 501; Swaney v. Alstott, 134 Iowa 63, 7 L. R. A. (n. s.) 1032; Glisson v.
Heggie Bros., 105 Ga. 30; Tabb-ut, V. American Insurance Co., 185 Mass. 419, allowing the conditional buyer to recover from an insurance company only the value of his interest in the chattel and not the full value. Sloan v. McCarty, 134 Mass. 245. Worden Grocery Co. v. Blanding, 161 Mich. 254, 126 N. W. 212, holding a note given for the price, on a conditional sale, not negotiable because the buyer would not be liable if the seller could not pass title; Fleming v. Sherwood, 24 N. D. 144, 43 L. R. A. (n. s.) 945, idem.
Some courts have held that notes given for the contract price in conditional sale agreements are not negotiable because of uncertainty in the obligation of pay. ment. This uncertainty of obligation is not, however, clearly predicated upon possibility that the buyer might not be liable. Rather, it seems to be based on the fact that the seller may not choose to hold him to payment, but may elect to retake the chattel. So long as the seller has the option, to demand payment on default or to retake the property, it is clear that the obligation to pay is not certain; the buyer may have to pay or not as the seller chooses. These cases do not, therefore, indicate that the buyer is not liable for the full purchase price regardless of title.
Bannister v. Rouse, 44 Mich.
But whatever the reason, it seems clear that a seller who has given possession to the buyer is not restricted to a recovery of damage for the buyer's failure to pay, but can bring suit for the whole agreed price.
Titular Actions. Despite the fact that he can thus sue for the purchase price, and although he has parted with possession, the seller, because he has retained title, is still the owner in practically every respect. So long as the buyer has possession the seller can not prevent title from passing to him on performance of the condition. In this respect the seller's absolutism of ownership is limited.30
In other respects the seller is the owner of the property. He can sell or otherwise transfer his right in the goods to others.81 He can himself maintain a titular action against a third person.88
Recovery of Possession.—Being owner, he can retake possession from the buyer or anyone holding under him. If the buyer's contract provides that he shall have possession so long as he is not in default, the seller can not retake possession before default.38 But if the buyer is in default the seller can retake possession, whether the contract expressly gives him that right or not.84
428; Chicago Ry. Co. v. Merchants Bank, 136 U. S. 268; but cf. Third Natl. Bk. V. Armstrong, 25 Minn 530; Iron Wks. V. Paddock, 37 Kan. 510.
30-See discussion of Buyer's Rights, post, p. 176.
31-Everett v. Hale, 67 Me. 497, payments by buyer to the seller are ineffective after notice that seller has transferred the title to another; Burnell v. Marvin, 44 Vt. 277, transferee can maintain a trover action; Foundry Co. v. Pascagoula Co., 72 Miss. 608.
32-Smith V. Gufford, 36 Fla.
481, 51 Am. St. 37; see other authorities cited in re the rights of third persons.
33—Post, p. 176.
34–Wiggins v. Snow, 89 Mich. 476, even without such provision in the contract; Ryan v. Wayson, 108 Mich. 519, idem; Tufts V. D'Arcambal, 85 Mich. 185, 24 Am. St. 79; Hegler v. Eddy, 53 Cal. 579; Gerow v. Castello, 11 Colo. 560, 7 Am. St. 260; Smith v. Gutford, 36 Fla. 481, 51 Am. St. 37, 18 So. 717; Perkins V. Grobben, 116 Mich. 172; Turk v. Carnahan, 25 Ind. Ap. 125; Crompton V. Beach, 62 Conn. 25; Segrist v. Crabtree, 131 U. S. 287; Seanor V. McLaughin, 165 Pa. 150; Walsh v. Taylor, 39 Md. 598; Palmer v. Kelly, 56 N. Y. 637, buyer had failed to keep property insured as contract provided.
There is strong authority that the seller may even use such force as is necessary to retake possession, subject, however, to criminal liability for breach of the peace. There is conflict in this regard, however.85
Furthermore, where the contract provides, either expressly or by implication, that the seller may retake possession in case of default, he may do so without first giving back what he has received from the buyer.86
After Suit for the Purchase Price.—This right of the seller to retake possession if the conditional buyer makes default may, or may not, be affected by his having
35—W. T. Walker Furniture Co. V. Dyson, 32 App. D. C. 606, 19 L. R. A. (n. 8.) 606, annotated.
36-Tufts v. D'Arcambal, 85 Mich. 185, 24 Am. St. 79; Perkins v. Grobben, 116 Mich. 172; Crompton v. Beach, 62 Conn. 25; Lippincott v. Rich, 22 Utah, 195; Duke V. Shackleford, 56 Miss. 552; Pfeifer V. Norman, 22 N. D. 168, 38 L. R. A. (n. 8.) 891; Raymond Co. v. Kahn, 124 Minn. 426; Fairbanks v. Malloy, 16 Ill. Ap. 277, because the retaking is not strictly a rescission. Fleck v. Warner, 25 Kan. 492; Hawkins v. Hersey, 86 Me. 394, even in an action for trover. Even in an action for conversion by a third person, in privity with the buyer, the defendant can not set off payments made and the seller is entitled to the full value of the chattel, Lorain Steel Co. y. Norfolk, etc. Ry. Co., 187 Mass. 500.
Contra, Hays v. Jordan, 85 Ga. 741.
Seller need not give up notes received for future payments, Kirby v. Tompkins, 48 Ark. 273; Hoe v. Rex Mfg. Co., 205 Mass. 214.
This right to retake possession without returning what the buyer has paid has been changed by statute in some states.
By thus retaking possession without refunding money paid the seller does not necessarily put an end to the contract. Tufts v. D'Arcambal, 85 Mich. 185, 24 Am. St. 79.
If the seller does intend by his retaking of possession to rescind the contract, it appears tiat the buyer may then sue to recover the money he has paid.
Miller v. Steen, 30 Cal. 402, "If the contract has been rescinded, the plaintiffs (buyers) are entitled to recover the money paid. If the contract was not rescinded, the vendees became entitled to the possession upon payment of the full amount due.”
See further, post, p. 103.