Emerson-Brantingham Implement Co. v. Arrington , 216 Ala. 21 ( 1927 )

It is the settled law in this state that the vendor in a conditional sale of chattels, who successfully asserts his right to repossess the property, thereby abandons his right to recover the purchase price. Sandlin v. Maury Nat. Bank,210 Ala. 349, 98 So. 190; Sanders v. Newton, 140 Ala. 335,37 So. 340, 1 Ann. Cas. 267. This principle is very generally recognized by the American courts. 24 R. C. L. 491, § 785.

The proposition presented by defendant's special plea numbered 8 is that when a conditional vendor has exercised his right to repossession by taking from the vendee a part of the property sold to him, he elects to pursue that remedy in toto, and loses the right to recover, not merely the whole of the purchase price, but even such part thereof as covered that part of the property which has not been reclaimed.

The theory of the plea is that, although the sale in this case was for numerous items of machinery, each item separately priced, the sale was in fact a single transaction, or else became by statement a single account, for the whole of which an aggregate price was due; and that this claim or account could not be split into two or more parts, one part to be satisfied by rescission of the sale as to its items, and the other part by recovery of the price applicable to its items.

Counsel have cited no case, and our own search has discovered none, in which this proposition has been discussed. This case seems, therefore, to be one of first impression, and it must be determined by the application of general principles.

In the case of Oliver v. Holt, 11 Ala. 574, 578 (46 Am. Dec. 228), it was said:

"This rule of law, that a demand not divisible in its nature, cannot be split up into several causes of action, has been recognized by this court in two cases. * * * A consequence of this rule is, that a judgment in a suit for a part of the claim, is a bar to an action for the remainder. This results necessarily from the entirety of the contract; being incapable of division, so as to be the foundation of several suits, a recovery of a part, is an election to take that for, and is therefore equivalent to, a recovery of the whole. This principle has been asserted in a great many cases. Guernsey v. Carver, 8 Wend. [N.Y.] 492, (24 Am. Dec. 60), was an action for goods sold and delivered upon an account, consisting of distinct items, delivered on different days, but all due. It was held to be an entire demand, and that a recovery for a part was a bar to an action for the residue. * * * Modifications of the rule may be found in some cases, which seem to invade this principle; but the rule itself is, we believe, universally recognized, and indeed the only question would seem to be, whether a continuous running account, is an entire thing, or whether each item of which it is composed is a separate debt. That it is an entire thing, is expressly decided in many of the cases referred to, and on principle it would seem difficult to attain any other conclusion."

And it was so held, though the items of the account formerly recovered, and those presently sued for, were separate and distinct. This view is sustained by an overwhelming weight of authority. 1 Corp. Jur. 1113, § 288. A fortiori, stated accounts are held to be entireties, so that separate items are not suable separately except by abandoning all others. 1 Corp. Jur. 1113, § 290.

In McLane v. Miller, 12 Ala. 643, it was declared that no action will lie for the recovery of a balance of a claim, a part of which has been used as recoupment of damages in a former suit. That case was reaffirmed in S. N. Ala. R. R. Co. v. Henlein, 56 Ala. 368 374, wherein the court quoted approvingly from Guernsey v. Carver, 8 Wend. (N.Y.) 492, 24 Am. Dec. 60, that —

"The whole account being due when the first suit was brought, it should be viewed in the light of an entire demand, incapable of division for the purpose of prosecution. The law abhors a multiplicity of suits."

It is elementary law that a party "cannot hold onto such part of the contract as may be desirable on his part and avoid the residue; but must rescind in toto, if at all." Stephenson v. Allison, 123 Ala. 439, 447, 26 So. 290, 292; Kelly v. L. N. R. R. Co., 154 Ala. 573, 578, 45 So. 906; 35 Cyc. 139 (sales); 13 Corp. Jur. 623, § 682 (contracts).

The application of these principles to the instant case lead to the conclusion that, in retaking possession of any material part of the machinery sold, the plaintiff rescinded the entire contract of sale, thereby canceling the consideration which supported the obligation to pay either the note or the purchase price due on the account, and so lost the right to have any recovery thereon, either total or partial; provided that it is made to appear, by appropriate allegation in the plea, that the residue of the machinery was still in the possession of the vendee. If the vendee had sold any parts of the machinery, that of course effected a severance of that part of the account; and for the invoice price of that part an action could be maintained, notwithstanding the vendor's repossession of the other part. This is plainly the purpose and effect of the contract.

The plea is defective in the particular noted, and did not bring the defense within the principle under discussion, and the demurrer should have been sustained.

Defendant's pleas numbered 9, 10, and 11, seek to avoid liability on the notes and account sued on, upon the theory that plaintiff is a foreign corporation and has not qualified to do business within the state as required by the laws of Alabama; and that the claims sued on are founded on a transaction which constituted the doing of business within the state.

The question presented by the demurrer to these pleas is whether the shipment of the machinery, under the terms of the contract exhibited, was interstate commerce, or was, on the contrary, doing business within the state, and therefore subject to its laws.

Notwithstanding some of its minor provisions, the dominant and distinguishing features of this contract are the unconditional promise of the purchaser to pay a stipulated price for the articles to be shipped, and the reservation of title in the vendor until they were paid for, as security for that payment. These features clearly constitute the transaction a "conditional sale," as distinguished from a mere agency to sell on consignment or otherwise. Sumner v. Woods, 67 Ala. 139, 42 Am. Rep. 104; Industrial Finance Corporation v. Turner (Ala. Sup.) 110 So. 904;¹ Note to Fleet v. Hertz, 94 Am. St. Rep. 238, 242. This identical contract was so construed in the case of Emerson-Brantingham Implement Co. v. Lawson (D.C.) 237 F. 877, 881, the court saying:

"There can be no question but that the orders signed by Brom, and the delivery of the goods thereunder, constituted a conditional sale. Language could not be plainer."

The machinery in question was shipped by the vendor from Nashville, Tenn., to the purchaser at Montgomery, Ala. The theory of these pleas seems to be either that plaintiff was selling this machinery in Alabama through the local agency of this defendant — the transaction with defendant being a consignment merely — or that the mere fact that the contract was made in Alabama excludes it from the field of interstate commerce, and stamps it as intrastate business.

The first theory, as we have seen, is invalid, because the transaction was in fact a sale to defendant. And, it may be observed, if the theory of consignment and agency were conceded, defendant, as agent, could not, it seems, take advantage of the failure of plaintiff to qualify for doing business within the state, so far as concerns his own obligations to plaintiff, growing out of their mutual contract of agency. Georgia Home Ins. Co. v. Boykin, 137 Ala. 350, 368,34 So. 1012; In re Hovey, 198 Pa. 385, 48 A. 311; Memphis, etc., Co. v. Agnew, 132 Tenn. 265, 177 S.W. 949, L.R.A. 1916A, 640, 646; 14a Corp. Jur. 1306, § 4010. The demurrers, however, do not present that question.

The second theory is contrary to the decisions of this court, and to those of the federal courts. Ware v. Hamilton Brown Shoe Co., 92 Ala. 148, 9 So. 136; Culberton v. American Trust Banking Co., 107 Ala. 457, 19 So. 34; Dozier v. State of Ala.,218 U.S. 124, 30 S.Ct. 649, 54 L.Ed. 965, 28 L.R.A. (N.S.) 264; Sioux Remedy Co. v. Coke, 235 U.S. 197, 35 S.Ct. 57,59 L.Ed. 193, 196, 197.

On the face of the pleadings, the transaction in question — the sale and shipment of the machinery — was interstate commerce, and not subject to the laws of Alabama. The case of Cable Piano Co. v. Estes, 206 Ala. 95, 89 So. 372, is not in point, since in that case the property sold was within the state, and hence a sale made within the state was in no sense interstate commerce. It is of no consequence that a clause of the contract provides for a resale to or for the vendor, at its option, of goods remaining unsold in the vendee's hands at certain times, because no such sale is relied on by plaintiff. So, also, the case of Langston v. Phillips, 206 Ala. 174,89 So. 523, is not in point, because the business done was not an act of commerce.

It results from the foregoing considerations that pleas 9, 10, and 11, set up invalid defenses, and the demurrers thereto should have been sustained.

Plea 4 is a plea of non est factum in Code form. The replication to this plea sets up a good estoppel against the defense presented by the plea, and the demurrer to the replication was erroneously sustained. The elimination of this replication cannot be held as error without injury, since estoppels must be specially pleaded, and are not available under the general issue.

For the errors noted, the judgment of nonsuit will be reversed, and the cause remanded for further proceedings.

Reversed and remanded.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.

¹ 215 Ala. 460.

On Rehearing.