Strong v. Taylor — 2 Hill & Den. 326

Majority

p. 326

Strong vs. Taylor.

Headnote

S. & D. entered into a written contract by which the former agreed to sell, and the latter to purchase, a canal boat for $300, provided that amount should be paid by D. in freighting wheat and flour on the canal under the direction of S. <fc. : Held, a conditional sale, and that no property vested in D. which could be levied on and sold under afi.fa. against him, until the purchase money was fully paid.

Otherwise, semble, had an actual sale taken place, and the contract been put' in this form for the purpose of hindering and delaying D.’s creditors.

Under a bona fide contract of this nature, the vendee is entitled to the possession of the thing sold for the purpose of paying for it in the manner stipulated ; but it is to be thus possessed as the property of the vendee till the condition of payment is fulfilled.

Where a party is possessed of an interest in property liable to be divested on his failure to comply with a condition subsequent, such an interest may be seized and sold on execution against him, and the purchaser, on complying with the condition, will acquire an absolute title. Semble

Replevin, tried before Willard, C. Judge, at the Monroe circuit, in September, 1840. The action was in the cepii for a canal boat, tackle and furniture, which had been levied upon by the sheriff of Rensselaer on an execution against one Dubois, and subsequently delivered to the defendant on his receipting the property to the” sheriff. The principal question which arose at the trial was whether, at the time of the levy, the title to the boat, &c. was in the plaintiff or Dubois. It appeared in evidence, on the plaintiff’s own showing, that Dubois held the property under an instrument executed by him and the plaintiff in the following words: “ Whereas Joseph Strong, of the city of Rochester, is the owner of a canal boat called 1 Signal;’ said Strong hereby agrees to sell the same to Milton Dubois for the sum of $300, provided the same amount is paid as follows, viz: said Dubois agrees on his part to purchase said boat at the sum of $300, and to pay for the same in freighting flour and wheat to and from such places as said Strong shall direct, at the customary prices of freight as established by the regular forwarding lines on the Erie canal, said Dubois hereby promising and agreeing to pay

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the said Strong, or allow him to retain out of such freight, one half the amount thereof until the full sum of $300, the purchase money of said boat and furniture, is reserved retained and paid over to said Strong, together with the interest on the said sum of $300 from and after this 22d day of December, 1838. In witness,” &c. Signed, “ Joseph Strong,” (L. S.) “ Milton Dubois,” (L. S.) It was admitted that all the purchase money had not been paid.

The defendant’s counsel asked the judge to nonsuit the plaintiff, on the ground, 1. That the instrument was a sale and mortgage, and that consequently, the mortgage not having been forfeited, Dubois had such an interest in the boat, &c. as might be sold on execution; and 2. That if the instrument was not a sale and mortgage, it was a conditional sale vesting in Dubois the right of possession, and a conditional interest in the property, which might be levied on and sold on an execution against the latter. The judge refused to direct a nonsuit, and the defendant’s counsel excepted. The jury found a verdict for the plaintiff, and a motion was now made in behalf of the defendant for a new trial upon a bill of exceptions.

S. Stevens, for the defendant.

J W. Gilbert, for the plaintiff.

By the Court,

I was at first inclined to view the contract of sale as a mortgage, and the interest of Dubois that of a mortgagor in possession, and therefore the subject of levy and sale on an execution against him; (Otis v. Wood, 3 Wend. 498 ;) but upon further reflection and examination, the soundest view is, perhaps, to regard the contract as a conditional sale, in which aspect the property did not vest in the vendee, and would not, till the performance of the condition. (2 Kents Comm. 497. Ross on Sales, 60, 63. Barrett v. Pritchard, 2 Pick. 512 .)

The contract is in writing and imports, in terms, an

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agreement to sell only on condition of payment in the mode specified; a condition which the vendor had a right to impose for his own security, and which, as it clearly appears upon the face of the contract, cannot be disregarded.

As the contract was executory and vested no title to the boat in Dubois, it remained absolutely in Strong, subject to the qualification, (not expressed, but necessarily implied,) that the former was entitled to the possession and use of the boat for the purpose of paying the price, in pursuance of the terms agreed on. But as the property did not pass to Dubois, the boat was to be thus possessed and used by him as the boat of Strong, to become the property of Dubois on his paying the price in the manner contemplated.

The sum of the whole case is this: The right of Dubois rested in contract, and contract only, by virtue of which he might, at a future day, acquire an interest in the property ; but till the fulfilment of the condition, i. e. payment-of the purchase money in the mode pointed out by the contract, nothing passed. True, he had possession, and even a right to the possession; this was however for a specific object, not unqualified, but for the sole purpose of performing his part of the agreement. So much may be implied from the terms and nature of the agreement, but nothing more.

I concede, where a party takes and is possessed of an interest in property, liable to be divested on his failure to comply with a condition subsequent, such interest may be seized and sold on execution, and the purchaser on complying with the condition would acquire an absolute title. That is the case with respect to a mortgagor in possession. But here no interest in the property passe’d to Dubois, save what rested in contract—an interest which it is not pretended can be the subject of levy and sale. I have before remarked, that although the right of Dubois to the possession of the boat may be implied from the contract and sale, there being no express provision to that effect, yet it can be carried no

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farther than for the purpose of paying the stipulated price in freight.

Regarding the case then in the light of a conditional sale, the case of Barrett v. Pritchard, (2 Pick. R. 512,) is a full authority for the ruling at the circuit, and the same may be said of the other cases and books already referred to.

I admit, if the contract were merely colorable—if an actual sale had in fact taken place between the parties, and the contract been put into this form for the sake of “ hindering and delaying” the creditors of Dubois, the result might be different; but no such point was made on the trial, and it is, therefore, unavailable here.

Indeed, there is perhaps not much in this suggestion ; for at most it only raises the question, whether the boat is the subject of a levy as against Dubois or Strong. In the view we have taken, it would be liable to the creditors of the latter; but upon general principles, and in a practical point of view as a question of public policy, it is of very little importance which set of creditors are allowed to seize the property.

New trial denied.

Cases cited

Otis v. Wood 3 Wend. 498 N.Y. Sup. Ct. p. 327