Hart v. Wood , 202 Iowa 58 ( 1926 )

I. A brief statement of the facts is necessary to an understanding of the legal questions presented.

In April, 1919, the defendant W.E. Wood and one Hillesheim jointly negotiated with the defendant Knudtson for the purchase of a Chalmers automobile. In such negotiations a cash sale was first contemplated. $1,650 was fixed upon as the price. This amount was more than the purchasers could pay at that time. They did pay to Knudtson the sum of $740, and executed their note for $910, payable December 1st following, and received delivery of the automobile. This transaction was had in Elgin, in Fayette County, where Knudtson was engaged in business. The purchasers occupied, as tenants, the farm of the plaintiff, situated in Allamakee County. Shortly thereafter, Wood and Hillesheim severed their relation, and Hillesheim transferred all his interest in the joint property to Wood. On October 4, 1919, defendant Wood and wife gave to plaintiff a bill of sale of all the property in their possession upon the farm, — the same being intended as security for indebtedness owed to plaintiff. On November 17th following, Knudtson, by mutual arrangement with Wood, took back the automobile, and held the possession of the same, pursuant to such arrangement. On December 6th, this suit was begun against both defendants.

The main contention between the parties is largely one of law, and is whether the transaction of April 28th amounted to a conditional sale of the automobile by Knudtson to the purchasers. If a conditional sale, then the bill of sale to the plaintiff takes priority over any right of Knudtson's. The contention for Knudtson is that the contract of April 28th was a contract for bailment only. Knudtson testified that it was agreed between him and the purchasers that they might take the automobile and use it, and if they paid their note on December 1st, they should thereby become owners of the automobile; but if they failed on such date to pay such note, then they should return the automobile, and accept a surrender of their note. It is claimed that, upon this testimony, it was error for the court to direct a verdict for the plaintiff. One infirmity in that evidence for the purpose for which it is put forward is that it does not stand alone in the testimony of Knudtson himself. His other testimony was that the negotiations had reference to a contemplated sale; that a part of the purchase price was paid; that a promissory note was taken for the balance; that Knudtson has held this promissory note ever since; that he did not surrender it when he received back the automobile. It is contended, however, that the partial payment was to be retained by Knudtson as compensation for the use.

It further appears from the testimony of Wood, whose interest in the litigation is quite nominal, and who is represented by the same counsel with Knudtson, that he redelivered the automobile to Knudtson under an arrangement whereby Knudtson was to sell it and apply the proceeds first to the discharge of the promissory note, with interest, and that any balance remaining should be paid to Wood. This evidence was not denied by Knudtson. We ought not, therefore, wholly to segregate the particular evidence of Knudtson upon which the claim of bailment is predicated, from the remainder of his evidence; nor should we wholly disregard the evidence of Wood, which was given in Knudtson's behalf.

There is a further fact in the record that seems to call for our consideration of the evidence on its merits as a whole, in support of the ruling of the trial court.

We have already noted that the jury was excused, though not discharged, and that this was done by stipulation of the parties on January 21, 1921. The motions were submitted, and taken under advisement. Decision was not made until November 1. APPEAL AND 12th following. The record does not disclose a ERROR: stipulation that decision might be rendered in review: vacation or at a future term. But no objection presump- of any kind was made to the entry of decision tions: and judgment on November 12th, nor was any submission question raised, by motion or otherwise, of the to court. authority of the court so to do. Manifestly, the jury had been fully discharged at this time, by operation of law, if not by the specific order of the court. There was no way left, at that time, for the disposition of the case upon the merits of the evidence, except that it should be done by the court. In the absence of objection by either party, we must necessarily presume that the jury had been rightfully discharged by their consent, and that they had submitted the whole issue to the court, notwithstanding the pendency of the motions.

The evidence of the two defendants, taken as a whole, clearly presents a case of conditional sale, and not of bailment. MaxwellMotor S. Corp. v. Bankers Mtg. Sec. Co., 195 Iowa 384; Morse Sammis v. Chicago, R.I P.R. Co., 73 Iowa 226; 2. SALES: Wright v. Barnard Bros., 89 Iowa 66; Bentley conditional Olmstead v. Snyder Son, 101 Iowa 1; Moline sales: Plow Co. v. Braden, 71 Iowa 141. Nothing is innocent better settled, under the decisions, than that a subsequent contract which in its essence is a sale upon purchaser. condition of payment of the purchase price may not be concealed by any cover of mere words.

In view of the peculiar condition of the record before us, as bearing upon this question, we are not disposed to draw too fine a line as to whether a jury question was presented by the particular testimony of Knudtson to which we have already adverted. We are disposed to the contrary view, and to the view that a verdict for Knudtson, if rendered, could not be sustained, upon the testimony of the defense as a whole.

There is no claim that the plaintiff had any notice, actual or constructive, of the conditional sale.

We hold at this point that the transaction was one of conditional sale, and that the plaintiff, under his subsequent bill of sale, took priority over the right of Knudtson under his conditional sale, as an innocent purchaser, without notice.

II. It is urged by each defendant that the suit was brought in the wrong county. Knudtson was living in Fayette County, and Wood in Allamakee County, at the time the suit was commenced. The automobile was in possession of Knudtson in Fayette County, having been delivered to Knudtson by Wood, a few days previously, in Allamakee County.

Manifestly, Wood is in no position to say that the suit was brought in the wrong county. Nor is Knudtson in any position to say so, if Wood was a proper party to the suit. No application was presented for a change to the proper county. 3. PARTIES: Goldsmith v. Willson, 67 Iowa 662. This failure defendants: might be excused on the ground that a motion proper could not lie while Wood was a party to the parties: case. Such is the argument for Knudtson. His replevin. contention is that the case should have been dismissed as to Wood, for want of any interest therein; that, if it had been so dismissed, then the statute would have required a dismissal as to Knudtson, as having been sued in the wrong county. We inquire, therefore, whether Wood was properly made a party. The plaintiff claimed title under Wood. He had to show title good as against Wood, before he could prevail, even against Knudtson. If Wood delivered the automobile to Knudtson, then Knudtson's right of possession was referable also to the title of Wood. In such case, Knudtson became the bailee of Wood. As to a third party, his possession would be the possession of Wood, in a legal sense. This of itself rendered Wood a proper party. Whether he was a necessary party, we need not determine.

III. It is also urged that the plaintiff's case should have been dismissed for want of demand. To have dismissed on this ground, would have been an abatement only. The defendants each answered only in bar. Such answer went to the 4. REPLEVIN: merits, and denied the right of the plaintiff in abatement: toto. It is at least doubtful whether a want of defendant in such an attitude is entitled to demand. complain of want of demand. The purpose of a demand is to furnish opportunity to one rightfully in possession to surrender his possession to the rightful claimant without being subjected to suit or the costs thereof. Where the defendant asserts his absolute right to maintain possession as against the plaintiff, regardless of demand, we see little occasion for abating a suit for want of demand. When the defendant discloses such to be his attitude, he discloses also that a demand upon him would have been a useless formality. It is argued herein that the defendant Knudtson was rightfully in possession, and was therefore entitled to the preliminary demand, as a matter of law. Granted that he was rightfully in possession as between him and Wood, he was not rightfully in possession as between him and the plaintiff. His claim of right of possession was permanently hostile to the plaintiff.

Granted that Wood was rightfully in possession prior to November 17th, yet on that date he delivered the property to Knudtson, in hostility to the title of plaintiff under his bill of sale. Knudtson received it, knowing that the act of Wood was in breach of his obligation to plaintiff. Wood had wrongfully put it out of his power to deliver the possession to the plaintiff under his bill of sale, and surely a demand upon him would have been useless.

We deem it clear that neither defendant is in any position to complain of want of demand.

IV. Defendants complain also of the form of the judgment entered, in that it fixed no value upon the 5. REPLEVIN: property. It appears that the property was left judgment: in the hands of defendant Knudtson under a failure to delivery bond. Failure of the court to find a fix value. valuation of the property operated apparently to the detriment of the plaintiff, rather than to that of the defendant Knudtson.

If it can be said that the failure of the judgment in this regard operates to the prejudice of the defendant Knudtson, we think he would be entitled to have the defect rectified. We are disposed to say at this point that the defendant Knudtson may, at his own election, have the case remanded for a correction of the judgment in this respect, and for a further hearing upon such issue in the district court, if he be so advised.

In all other respects, the judgment below is affirmed. —Affirmed.

De GRAFF, C.J., and ALBERT and MORLING, JJ., concur.