Raymond Bros. Impact Pulverizer Co. v. Thomas , 159 Wash. 550 ( 1930 )

In the majority opinion, it is held that the judgment appealed from should be affirmed, the opinion being based largely upon the authority of the cases of West American Finance Co. v. Finstad,146 Wn. 315, 262 P. 636; Lahn Simmons v. Matzen WoolenMills, 147 Wn. 560, 266 P. 697, and Gervasi v. Seattle Rainier Valley R. Co., 148 Wn. 635, 269 P. 1050.

In the Finstad case, it was held that a contract purporting to be a contract of conditional sale should be held to be a chattel mortgage as against a subsequent purchaser in good faith and for value.

In the second of the cases cited, an agreement providing for the installation of and payment for a sprinkler system in a woolen mill was held to be a chattel mortgage and not a contract of conditional sale, the contract providing that in case of default the seller could remove the sprinkler system, sell the same and apply the proceeds, less cost and a reasonable attorney's fee, upon notes which had been given, at the time of the execution of the contract, for the purchase price, the contract construed as a whole showing that the relation of debtor and creditor was created thereby. The action was waged between the vendor of the sprinkling system, on the one part, and the woolen mills which had purchased the same and several other parties, as defendants. Notes had been given by the purchaser to the vendor, as provided for in the contract, and it was apparently the intention of the parties that, after the removal of the property by the vendor upon default, the sale of the property and the credit of the proceeds on the notes, the vendee should still be liable for any balance of the purchase price remaining unpaid. After purchasing the sprinkling system, the woolen mill had gone into the hands of a receiver, and the rights of its creditors were involved.

In the Gervasi case, it was held that the purchaser of an automobile under a contract which, while purporting to be a contract of conditional sale, was in effect, under the prior decisions of this court, a chattel mortgage, could recover for damages to the car sustained while the same was in his possession, notwithstanding the fact that he thereafter defaulted in his payments under the contract. If the contract under which Mr. Gervasi purchased the automobile was in law a chattel mortgage instead of a contract of conditional sale, and for that reason the title to the car had passed to Mr. Gervasi, he could, of course, maintain an action for damages against a person who subsequently injured his property, notwithstanding the fact that he might still owe a portion of the purchase price of the automobile which he had purchased.

In the case at bar, the action is pending between the parties to the original contract. The rights of no third party have intervened, nor is there the question of any claim on behalf of a creditor. The contract between the parties affected, when drawn, no one but themselves, and it still concerns them, and them only. Without going into a detailed analysis of the provisions of the contract to be construed in the case at bar, it seems to me that it differs from the contracts which have been held by this court to be in fact chattel mortgages instead of contracts of conditional sale, as such contracts purported to be.

An examination of the contract here in question convinces me that it was by the parties thereto intended to be a contract of conditional sale, and that, while it contains provisions which the courts could properly hold to be unenforceable, as inconsistent with the manifest intent of the contract, considered as a whole, and particularly when considered in connection with certain specific provisions thereof, this court should not, unless the law positively requires such a holding, so construe the agreement as to make for the parties thereto a contract not in the contemplation of either one of them, at the time the agreement was made, and which establishes between them as to the property covered thereby a relationship fundamentally different from and, indeed, repugnant to, the relation which the parties intended to establish.

While it is true that contracts between individuals are frequently construed by the courts in such manner as to result in the establishment of different legal obligations from those which the parties probably had in contemplation, courts are loath to so construe lawful agreements between competent parties in such manner as to fundamentally change the contractual relationship which the parties sought to establish between themselves. In the case at bar it seems clear that the parties by their contract intended the personal property covered thereby to remain the property of the seller, appellant, until paid for.

In my opinion, the contract differs from those construed by this court in the cases hereinabove referred to, and, the rights of no third party having intervened, the contract should be held to be one of conditional sale, and the judgment appealed from should be reversed.

FULLERTON, TOLMAN, and HOLCOMB, JJ., concur with BEALS, J.