Liver v. Mills

On May 7, 1906, the appellants, who were the owners of a certain automobile, made a contract of conditional sale thereof to S.A. Thompson and J.S. Miller, whereby said vendees were to have possession of the automobile, but title thereto was to remain vested in appellants until the full purchase price was paid. Thompson and Miller paid all of the purchase price except the sum of $132, which was due on May 27, 1906. On June 23, 1906, they sold and delivered the automobile to James J. Liver, respondent herein. On June 26, 1906, Mills and Price, the appellants, instituted an action of claim and delivery against Liver for the recovery of the possession of the automobile. Pending the action, the automobile was, by virtue of a writ, taken from Liver and delivered to Mills and Price, who, on September 17, 1906, recovered judgment declaring that they were entitled to possession. Thereafter, on September 27, 1906, Liver tendered to Mills and Price the balance of $132 which had fallen due May 27, 1906, with interest, and demanded redelivery of the automobile. Compliance with his demand being refused, he commenced this action to recover $450, the value of said machine, and judgment was entered in his favor for such amount, less the $132 (with interest) due under the contract of conditional sale. The defendants appeal from the judgment and from an order denying their motion for a new trial.

The facts as above stated are taken from the findings of the court. So far as we have set them forth, it is not questioned that such findings are in accordance with the testimony. It is, however, claimed by the appellants that the court failed to find upon certain material issues raised by their answer. The answer alleged that prior to the commencement of the action of claim and delivery the defendants herein demanded of Liver that he pay to them the balance of $132 then due, or deliver to them the possession of the automobile, but that said plaintiff refused to do either of these things. It is further alleged that said plaintiff repudiated the terms of the conditional sale, asserted absolute ownership in and right to the possession of the automobile, and denied that said defendants had any right, title, or interest therein. There was evidence in support of these allegations. We think it clear that findings in favor of defendants upon the issues so raised would have required a judgment that the plaintiff take nothing by the action.

The validity of conditional sales is fully recognized in this state (Putnam v. Lamphier, 36 Cal. 151; Kohler v. Hayes, 41 Cal. 455; Hegler v. Eddy, 53 Cal. 597; Sere v. McGovern, 65 Cal. 244, [3 P. 859]; Lowe v. Woods, 100 Cal. 408, [38 Am. St. Rep. 301, 34 P. 959], and it is well settled that "even bona fide purchasers from the person to whom personal property is delivered under an executory contract of sale get no valid claim to the property." (Van Allen v. Francis, 123 Cal. 474, [56 P. 339];Palmer v. Howard, 72 Cal. 293, [1 Am. St. Rep. 60, 13 P. 858].) The plaintiff did not by his purchase from Thompson and Miller, who were not the owners of the automobile, but only of a contract enabling them to acquire it upon a compliance with certain conditions, get any rights superior to those held by his grantors. Whether the property was in his hands or remained in the possession of Thompson and Miller, the vendors were, on default in payment, authorized to retake possession. The contract, as found by the court, does not contain the provision, usually expressed in such contracts, that, on default by the vendees, the vendors might retake possession. But inasmuch as the vendors never parted with the title, such title carried with it the right of possession in the event of default by the vendees. The purchasers had no right of possession except that given them by the contract, which must be construed as authorizing them to retain possession only so long as they should comply with the conditions required to be performed by them.

It has been held in this state, that where the vendor, in case of a conditional sale, retakes possession pursuant to the terms of the contract, the defaulting vendee may still complete the purchase and perfect his right to receive the property by paying the balance due. (Miller v. Steen, 30 Cal. 407, [89 Am. Dec. 124].) This upon the theory that a mere delay in the payment of money is ordinarily "capable of exact and entire compensation," and will not, unless time has expressly been made of the essence of the obligation, bar the right of the party in default to tender payment, with interest, at a later date, and demand performance of whatever obligation was due him upon such payment. (Civ. Code, sec. 1492) The retaking of the property is a right conferred upon the vendor by the contract of sale, and its exercise does not, in and of itself, terminate the life of the contract. The same reasoning may, perhaps, be applicable where the vendor has obtained the possession of his goods by means of an action of claim and delivery. Such action determines only the right of possession, (Riciotto v. Clement,94 Cal. 107, [29 P. 414]), and if, as was held in Miller v. Steen,30 Cal. 407, [89 Am. Dec. 124], possession by way of security may be resumed by the vendor without destroying the vendee's right to still complete the contract, it would seem to be immaterial whether the vendor took such possession peaceably or regained it by action.

But it certainly cannot be the law that a vendee, under a contract of conditional sale (or his assignee, who occupies no better position) may, denying the vendor's title, refuse to pay the balance due or to return the goods, and finally, after the vendor has established his right in an action at law, come in and demand the fulfillment of the very contract which up to that time he has repudiated. A very different case from that of mere delay in performance is presented where a party to a contract distinctly and unequivocally declares that he is not bound by the contract and will not perform the obligations imposed by it upon him. Such declaration and refusal will relieve the other party from all obligation to perform on his part. (Page on Contracts, sec. 1442; Civ. Code, sec. 1485; Hanson v. Slaven, 98 Cal. 377, [33 P. 266]; Rayfield v. Van Meter, 120 Cal. 416, [52 P. 666]; Alderson v. Houston, 154 Cal. 1, [96 P. 884].)

The vendors did not, by retaking the automobile, waive their right to treat the contract as ended by reason of its repudiation by respondent. As owners of the property, they were entitled to its possession. In the face of a repudiation of the contract by respondent, they were not bound to rescind, but were at liberty to treat the right of purchase as ended and to retake the property. Rayfield v. Van Meter, 120 Cal. 416, [52 P. 666].)

Under these views the appellants were entitled to findings on the issues raised by their averments that the plaintiff had denied their title and refused to recognize the obligation of the contract under which his immediate transferrors held possession.

The judgment and order appealed from are reversed and the cause remanded for a new trial.

Shaw, J., Angellotti, J., Melvin, J., and Henshaw, J., concurred.