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2. TITLE RETAINED, BUT POSSESSION PASSED

Breach of Contract.-Where the seller has passed the possession to the buyer, even though it is agreed that title shall not pass to the buyer until payment has been made, the seller can still sue for damages for breach of contract in case the buyer fails to pay as agreed.

Recovery of Purchase Price.-But in such cases he may also sue the buyer for the agreed price itself, as distinct from suing to recover damages. This is different from the majority rule in cases where the seller has parted with neither possession nor title, as just dis cussed. The reason for this difference—that is, the reason why he can sue for the price despite his retention of title if he has given possession, but can not sue for it if he has not given possession-is not clear.

The logical reason would be that the seller in giving possession to the buyer has given him a quid pro quo by which the debt of the buyer is created. This is the theory which the courts have expressly stated in many instances.28

28-This is very obvious in the case of Burnley v. Tufts, 66 Miss. 48. Tufts had sold to Burnley a soda water apparatus, with the express stipulation that title should not pass until the price had been paid, and that if the payment were not made at the times the installments were stated to be due the seller might retake possession of the apparatus. It does not appear that there was any stipulation that the buyer should have possession till payment or default, but that was obviously the intent of the parties. The apparatus was destroyed by fire, after several payments had been made, while in the buyer's possession but without

fault of either party. The seller sued to recover the unpaid part of the purchase price and was held entitled to the money. The court's opinion shows that possession was the consideration for the buyer's promise to pay, and not title, and that this consideration had been executed. "Burnley," said the court, "unconditionally and absolutely promised to pay a certain sum for the property, the possession of which he received from Tufts. The fact that the property has been destroyed while in his custody and before the time for the payment of the last note due, on payment of which only his right to the legal title of the prop

In other instances the seller has maintained his suit for the price without the court's having indicated any reason why he could do so. It may be that these courts have felt simply that the promise to pay, itself, created a debt and no executed consideration, or quid pro quo, was necessary. Or it may have been that inasmuch as pos

erty would have occurred does not relieve him of payment of the price agreed upon. He got exactly what he contracted for, viz., the possession of the property and the right to acquire an absolute title by payment of the agreed price. The transaction was something more than an executory conditional sale. The seller had done all that he was to do except to receive the purchase price; the purchaser had received all that he was to receive as the consideration of his promise to pay." In White v. Solomon, 164 Mass. 516, the buyer had even refused to take possession of the chattel. Before his refusal, however, the seller had delivered it to an express company for carriage to the buyer. The buyer's contract provided that "in consideration of its delivery for me, freight prepaid, at the express office specified below, I promise to pay the sum of (the purchase price)." The court stated the general rule, that a seller who still retains title, even though only because of the buyer's refusal to accept it, is not entitled to the purchase price but only to damages. But it then went on to decide that "in the case at bar the buyer has said in terms, that although the title does not pass by the delivery to the Express Company, if it does not, delivery shall be the whole consideration for an immediate debt (partly solvendum

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in futuro) of the whole value of the manikin, and that the passing of the title shall come as a future advantage to him when he has paid the whole. The words (in the contract) 'in consideration of its delivery' are not accidental nor insignificant. *** If a man is willing to contract that he shall be liable for the whole value of a chattel before the title passes, there is nothing to prevent his doing so, and thereby binding himself to pay the whole sum. When, as here, all the conditions have been complied with the performance of which by the terms of the contract entitles the vendors to the whole sum, if the vendors afterward have not either broken the contract or done any act diminishing the rights given them in express words, the buyer can not by an act of his own repudiating the title gain a right of recoupment, or otherwise diminish his obligation to pay the whole sum which he has promised."

Accd., Natl. Cash Register Co. v. Hill, 136 N. C. 272, 68 L. R. A. 100, similar to White v. Solomon, and quoting it with approval; Tufts v. Griffin, 107 N. C. 47, following Tufts v. Burnley; Natl. Cash Register Co. v. Dehn, 139 Mich. 406; Bierce v. Hutchins, 205 U. S. 340; Gray v. Booth, 64 N. Y. App. Div. 231; Amer. Soda Fountain Co. v. Vaughn, 69 N. J. L. 582, "The question to be determined

session was already with the buyer the seller could, by bringing his suit for the price, elect to pass the title to the buyer and that the buyer by not actively rejecting it would be presumed to have consented to it. This passage of title would then, of course, be the necessary executed consideration.29

is:

What was the consideration of the note? If the passing of the title to the apparatus was the consideration, the defense must prevail. If the delivery of the apparatus, with the right to acquire title, was the consideration the plaintiff must prevail. We think the consideration for the note was the delivery of the apparatus with the right to acquire title." Lancaster v. Southern Insurance Co., 153 N. C. 285; Harley v. Stanley, 25 Okla. 89; Roach v. Whitfield, 94 Ark. 448; Lavalley v. Ravenna, 78 Vt. 152; Dunlap v. Grote, 2 C. & K. 153; Boyer v. Ausburn, 64 Ga. 271, express agreement to pay in event of loss; Dederick v. Wolfe, 68 Miss. 500; Hollenberg v. Barron, 100 Ark. 403, even though seller had retaken possession at time of the sale; Marion Mfg. Co. v. Buchanon, 118 Tenn. 238; Whitlock v. Auburn Lumber Co., 145 N. C. 120, 12 L. R. A. (n. s.) 1214; Kilmer v. MoneyWeight Scale Co., 36 Ind. Ap. 568. 29-A number of courts, apparently considering that the promise to pass title is the real consideration, refuse to allow the seller to recover the purchase price after the goods have been destroyed.

Bishop v. Minderhout, 128 Ala. 162, predicated upon the principle that the risk of loss follows title; Randle V. Stone, 77 Ga. 501; Swaney v. Alstott, 134 Iowa 63, 7 L. R. A. (n. s.) 1032; Glisson v.

Heggie Bros., 105 Ga. 30; Tabbut v. American Insurance Co., 185 Mass. 419, allowing the conditional buyer to recover from an insurance company only the value of his interest in the chattel and not the full value. Sloan v. McCarty, 134 Mass. 245. Worden Grocery Co. v. Blanding, 161 Mich. 254, 126 N. W. 212, holding a note given for the price, on a conditional sale, not negotiable because the buyer would not be liable if the seller could not pass title; Fleming v. Sherwood, 24 N. D. 144, 43 L. R. A. (n. s.) 945, idem.

Some courts have held that notes given for the contract price in conditional sale agreements are not negotiable because of uncertainty in the obligation of payment. This uncertainty of obligation is not, however, clearly predicated upon possibility that the buyer might not be liable. Rather, it seems to be based on the fact that the seller may not choose to hold him to payment, but may elect to retake the chattel. So long as the seller has the option, to demand payment on default or to retake the property, it is clear that the obligation to pay is not certain; the buyer may have to pay or not as the seller chooses. These cases do not, therefore, indicate that the buyer is not liable for the full purchase price regardless of title.

Bannister v. Rouse, 44 Mich.

But whatever the reason, it seems clear that a seller who has given possession to the buyer is not restricted to a recovery of damage for the buyer's failure to pay, but can bring suit for the whole agreed price.

Titular Actions.-Despite the fact that he can thus sue for the purchase price, and although he has parted with possession, the seller, because he has retained title, is still the owner in practically every respect. So long as the buyer has possession the seller can not prevent title from passing to him on performance of the condition. In this respect the seller's absolutism of ownership is limited.30

In other respects the seller is the owner of the property. He can sell or otherwise transfer his right in the goods to others.31 He can himself maintain a titular action against a third person.32

Recovery of Possession.-Being owner, he can retake possession from the buyer or anyone holding under him. If the buyer's contract provides that he shall have possession so long as he is not in default, the seller can not retake possession before default.33 But if the buyer is in default the seller can retake possession, whether the contract expressly gives him that right or not.34

428; Chicago Ry. Co. v. Merchants Bank, 136 U. S. 268; but cf. Third Natl. Bk. v. Armstrong, 25 Minn. 530; Iron Wks. v. Paddock, 37 Kan. 510.

30-See discussion of Buyer's Rights, post, p. 176.

31-Everett v. Hale, 67 Me. 497, payments by buyer to the seller are ineffective after notice that seller has transferred the title to another; Burnell v. Marvin, 44 Vt. 277, transferee can maintain a trover action; Foundry Co. v. Pascagoula Co., 72 Miss. 608.

32-Smith v. Gufford, 36 Fla.

481, 51 Am. St. 37; see other authorities cited in re the rights of third persons.

33-Post, p. 176.

34-Wiggins v. Snow, 89 Mich. 476, even without such provision in the contract; Ryan v. Wayson, 108 Mich. 519, idem; Tufts v. D'Arcambal, 85 Mich. 185, 24 Am. St. 79; Hegler v. Eddy, 53 Cal. 579; Gerow v. Castello, 11 Colo. 560, 7 Am. St. 260; Smith v. Gufford, 36 Fla. 481, 51 Am. St. 37, 18 So. 717; Perkins v. Grobben, 116 Mich. 172; Turk v. Carnahan, 25 Ind. Ap. 125; Crompton v.

There is strong authority that the seller may even use such force as is necessary to retake possession, subject, however, to criminal liability for breach of the peace. There is conflict in this regard, however.

Furthermore, where the contract provides, either expressly or by implication, that the seller may retake possession in case of default, he may do so without first giving back what he has received from the buyer.36

-After Suit for the Purchase Price.-This right of the seller to retake possession if the conditional buyer makes default may, or may not, be affected by his having

Beach, 62 Conn. 25; Segrist v. Crabtree, 131 U. S. 287; Seanor v. McLaughin, 165 Pa. 150; Walsh v. Taylor, 39 Md. 598; Palmer v. Kelly, 56 N. Y. 637, buyer had failed to keep property insured as contract provided.

35-W. T. Walker Furniture Co. v. Dyson, 32 App. D. C. 606, 19 L. R. A. (n. s.) 606, annotated.

36-Tufts V. D'Arcambal, 85 Mich. 185, 24 Am. St. 79; Perkins v. Grobben, 116 Mich. 172; Crompton v. Beach, 62 Conn. 25; Lippincott v. Rich, 22 Utah, 195; Duke V. Shackleford, 56 Miss. 552; Pfeifer v. Norman, 22 N. D. 168, 38 L. R. A. (n. s.) 891; Raymond Co. v. Kahn, 124 Minn. 426; Fairbanks v. Malloy, 16 Ill. Ap. 277, because the retaking is not strictly a rescission. Fleck v. Warner, 25 Kan. 492; Hawkins v. Hersey, 86 Me. 394, even in an action for trover. Even in an action for conversion by a third person, in privity with the buyer, the defendant can not set off payments made and the seller is entitled to the full value of the chattel, Lorain Steel Co. v. Norfolk, etc. Ry. Co., 187 Mass. 500.

Contra, Hays v. Jordan, 85 Ga. 741.

Seller need not give up notes received for future payments, Kirby v. Tompkins, 48 Ark. 273; Hoe v. Rex Mfg. Co., 205 Mass. 214.

This right to retake possession without returning what the buyer has paid has been changed by statute in some states.

By thus retaking possession without refunding money paid the seller does not necessarily put an end to the contract. Tufts v. D'Arcambal, 85 Mich. 185, 24 Am. St. 79.

If the seller does intend by his retaking of possession to rescind the contract, it appears that the buyer may then sue to recover the money he has paid. Miller v. Steen, 30 Cal. 402, "If the contract has been rescinded, the plaintiffs (buyers) are entitled to recover the money paid. If the contract was not rescinded, the vendees became entitled to the possession upon payment of the full amount due."

See further, post, p. 103.

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