Lynch Davidson & Co. v. Denman Lumber Co. , 270 S.W. 225 ( 1925 )

^* Writ of error dismissed for want of jurisdiction April 29, 1925. (after stating the facts as above). The trial court decided that the legal effect attaching to the facts shown was "a cancellation or abrogation of the contract by mutual consent of the parties." The appellant insists that the conclusion was erroneous.

It is clear from the evidence that the contract expressly called for delivery of the lumber at the point of shipment, which was New Willard. The property then, as a matter of law, passed to appellee upon the delivery to the carrier at New Willard on September 20, 1920, and it is admitted by the parties that delivery to the carrier and the issuance of the bill of lading was a complete performance of the contract by appellant, the seller. In this view the appellant was not legally warranted, in virtue of the contract, in stopping the delivery. Hence the rights and remedies of appellant concerning the car of lumber, after delivery to the carrier at New Willard, were such only as an unpaid seller of goods would have. The lumber was sold on credit, with express stipulations as to time of payment. The bill of lading was an "open one," with no reservation of right to stop delivery in transit. In such case, where the property in the lumber has passed to the buyer and the seller has parted with the possession, as here shown, the unpaid seller has the equitable right to stop the lumber in transits only in case of the insolvency of the buyer. 5 Elliott on Contracts, § 5065; 24 R.C.L. p. 133. Insolvency of the buyer is of prime importance and a necessary condition to the right or its exercise. Carder v. Ry. Co.,170 Mo. App. 698, 153 S.W. 517; Music Co. v. Bridge, 134 Wis. 510,114 N.W. 1108. As appears, the appellee "was entirely solvent," and not insolvent, at the time and after the stoppage orders were given by appellant. The stoppage orders then were not under, but independent of, the contract, or any legal or equitable right of stoppage in transitu. Consequently, the act of appellant in directing the railroad companies to withhold delivery of the lumber would be characterized, legally speaking, as a purely voluntary act of countermand of the delivery and resumption of the car of lumber. The stop order had the effect to not only place appellant in control of the lumber, but in possession of it, through the railway agent acting in pursuance of appellant's express orders The order to the delivering carrier was: "Do not deliver car to consignees, but hold for our account."

That the appellee was refused delivery of the car of lumber upon arrival at place of destination is an admitted fact in the record. The appellee made prompt demand for the delivery, and was shown the stop orders. Appellee thereupon at once "told the said railway agent that the withholding orders of the plaintiff were accepted by the Denman Lumber Company, and for the railway agent to so advise the plaintiff." At the same time, and while the withholding orders were in effect, the appellee wired the appellant: "We are returning bill of lading and invoice Mo. P. to-day and replacing order." The bill of lading and invoice were promptly returned to appellant in a letter advising that the withholding of the lumber was "all right, except the reflection on our credit." The contract called for "quick shipment" of the lumber. In such facts the contract was, as determined by the court, rescinded by mutual consent, neither party thereafter having any enforceable rights therein.

The consent of the parties to the rescission of a subsisting simple contract may be implied from acts conduct with reference to their dealings with the property, and need not be shown by an express agreement. 35 Cyc. p. 129; 2 Black on Rescission and Cancellation, § 526. Thus, for instance, as applicable here, where the seller without legal justification and on his own volition takes back into his possession and control the property sold and delivered, and holds it subject to his order or as his property, or takes steps which are inconsistent with a completed sale and delivery of the property continuing in force, his assent to a rescission of the sale can be presumed. Such act of the seller of repossession of the property is, in effect, and is regarded as, a declaration of intention to countermand the delivery and reclaim the property, in such case there is open to the buyer the legal right either to sue as for conversion, or the alternative of assenting to the repossession of the property and the abandonment of the contract on the part of the seller and treating the contract as dissolved. In the event the buyer, as here, expressly consents or acquiesces in the seller resuming possession of the property sold and delivered, thereupon a rescission or abrogation is effected, not necessarily for legally sufficient cause, but by the mutual consent of the parties.

In respect to the application of this rule it is immaterial what the specified reasons of the seller may have been in resuming possession and control of the property, when the reasons are not warranted by terms of contract or law. In the act of resuming possession, and in the expressed consent of the seller thereto, a rescission or abrogation is legally effected. No legal reason is apparent to preclude the appellee, which has not paid for the lumber, from consenting, as it did, for appellant to have the lumber on such demand therefor, evidenced by the stop order. The appellee was not in fault or in default in respect to the stop order or refusal of the delivery so as to estop it from assenting to appellant's voluntary demand. The appellee acted promptly in the assent, and it is competent for parties to abrogate a simple contract by a naked agreement to that effect. The fact that appellant, after the notice of assent was given by appellee, offered back the possession of the lumber, would not prevent rescission or reinstate the contract in the absence of appellee's consent.

We have carefully considered the brief of appellant, which is well and clearly presented, and conclude that, in view of the evidence, the propositions therein should be overruled.

The judgment is affirmed.