Opinion
September Term, 1901.
A. Page Smith, for the appellants.
Learned Hand, for the respondent.
The conclusion reached by the County Court seems, from the opinion printed in the record, to be solely based upon this dictum found in the opinion of the learned justice writing in Earle v. Robinson (91 Hun, 370), viz.: "None of these remedies apply to the case at bar, or to any conditional sale, where the title to the property remains in the vendor." It is not quite certain, from the case as reported, what remedies the learned justice referred to; but if he intended to include all of the known remedies which the law governing contracts gives to a seller under a contract of sale, where payment and delivery are to be coincident, to wit, the right to sue for the purchase price, or to resell and bring action for the difference between the contract price and the sum realized, or the right to recover the difference between the contract price and the market price at the place and at the time fixed in the contract for transfer of title, then, indeed, it may be truthfully said that the ordinary contract of sale on the installment plan, such as is here under consideration, is a contract in which the seller is without remedy and his contract belongs to some anomalous and uncatalogued species wholly outside the sphere of the known laws governing contracts. Under this theory such contracts ought to be considered as entirely harmless by one of the contracting parties, and might be safely entered into by the buyer without any grave deliberation as to their terms.
We are not prepared, however, to give credence to a proposition so serious in its bearing upon commercial affairs, and are inclined to the belief that contracts of this class have the same inherent capabilities as to self-enforcement and the same right to command the aid of the courts to compel enforcement as have other valid contracts.
With the questions as to whether the remedy by a resale or the remedy by action for the difference between the contract price and the market price are either of them available to the seller, where the seller stipulates to retain title until final payment, we have nothing to do and express no opinion. It is obvious, however, that only in exceptional cases could there be any difference between the selling price and the market price in the case of merchandise so contracted to be sold, and hence this remedy, if available, would prove to be fruitless since no damages by this measure could be proven. Perhaps Earle v. Robinson ( supra) is authority for the proposition that the remedy by resale is not available since that question was in a measure involved in that case.
The question here is: Can the seller by such a conditional contract, after he has performed all the precedent acts which the contract contemplates to be performed on his part, compel payment of the installments of the purchase price as they mature? So far as I have been able to discover, those who answer in the negative base their conclusion upon the sole ground that title must first vest in the buyer before any recovery can be had of any portion of the purchase price. Just why this should be so declared is difficult to comprehend. The logical result of such reasoning would seem to be that the contract itself is invalid. This must be necessarily so if the contract is not enforcible by judicial aid. Here we have a contract in which there are independent covenants made by the contracting parties, each covenant supported by a good consideration, a contract not against public policy, no covenant in it to enforce which would be against conscience, an ordinary commercial contract; a promise to pay a certain sum of money on a fixed day is one of the independent covenants on the part of the buyer, and yet it is claimed that he cannot be made to pay because he has agreed that he will pay before the property vests in him. If the contract is lawful and valid I see no good reason why he may not be sued and be made to pay so far as a judgment for the sum promised will aid to that end. The seller under a contract of this nature stands upon his contract. He seeks no remedy because of a breach. He sues upon his contract just as a holder of a promissory note may sue the maker to enforce payment when payment has been refused. It would be as reasonable to leave it optional with the promisor in a promissory note to pay or not to pay as to leave it optional with a promisor in such a contract. The fact that the title to the property by the terms of the contract is not to vest in the buyer until a later day and until all the payments have been made in no way weakens the promise. The promise to pay is supported by ample consideration other than the actual vesting of the title. It is supported by the promise of the seller to vest the title at a future day and upon this promise the buyer has relied. Of course the seller under such a contract cannot have both the property and the purchase price, but the contract does not contemplate that he shall have both. And it is to be presumed that the seller will vest the title in the buyer at the time agreed upon; if he fails, the buyer has his action against the seller. When the buyer has fully performed the title vests in him by operation of law, and when the buyer stipulates for possession at once, as in this case, the property, in case the buyer performs, is quite beyond any different disposition thereof by the seller. There is no room here for apprehension even on the part of the purchaser. Nothing more is to be done to vest in him the title except performance of the covenants to pay made on his part. Hence, the vesting of title is not a condition precedent to a right of action for a matured installment of the purchase price. In Morris v. Sliter (1 Den. 59), BRONSON, Ch. J., says: "Where it appears from the terms of the agreement, or the nature of the case, that the things to be done were not intended to be concurrent acts, but the performance of one party was to precede that of the other, there he who was to do the first act may be sued, although nothing has been done or offered by the other party. He has not made performance by the other party a condition precedent to his liability, but has trusted to a remedy by action on the agreement."
This is the declaration of a principle, and not a theory; and it is a principle which has obtained in its entirety in the court of last resort in this State to the present time. It is the law applicable to all contracts. This was said in an action brought to recover a past due installment covenanted to be paid in a contract for the sale of land. The contract contemplated that title should not vest in the buyer until payment of the final installment. The court held that the action was well brought, and the promised payment could be recovered although the property remained vested in the seller.
The same doctrine was held in Paine v. Brown ( 37 N.Y. 228) and in Eddy v. Davis (116 id. 247). The fact that the subject of the contract in these cases was land in no way weakens the doctrine as to its universal applicability as the law of contracts. It makes no difference whether the subject be land or merchandise.
In Meriden Britannia Company v. Zingsen ( 48 N.Y. 252), EARL, J., writing for the court, applies the doctrine declared in Morris v. Sliter, in its entirety, to a sale of a chose in action. In that case the defendant contracted to deliver, in the following February and March, certain plated ware, in payment for a claim against a third person, and plaintiff agreed to transfer to defendant such claim on receipt of the plated ware. The defendant failed to make delivery, hence the action for its value. One of the defenses was a failure by plaintiff to transfer or offer to transfer the claim before bringing action. The court held that unnecessary; that it was not so contemplated by the contract; that the payment of the purchase price was made by the contract a precedent act, and plaintiff might enforce payment, although title to the article sold had not vested in the buyer. "The buyer had trusted to a remedy by action on the agreement."
These cases would seem to set at rest the question of the necessity of the title vesting in the buyer before payment of any part of the purchase price can be enforced by action.
Our attention is called by respondent to the following cases, which it is claimed are authority for the conclusion of the learned County Court: Earle v. Robinson (91 Hun, 363); Ackerman v. Rubens ( 44 App. Div. 227), and National Cash Register Company v. Schmidt (48 id. 472).
Earle v. Robinson fails to be authority for the reason that the question here presented was not involved in that action. It was not up for discussion or decision. What was then said by the learned justice writing the opinion, which might by any implication bear on this question, is to be regarded as dictum only.
Ackerman v. Rubens is not authority upon this question, for the reason that not even by dictum is the subject referred to. The only matter sought to be disposed of was the sufficiency of the evidence of damages by a resale when the seller becomes the buyer, and the conclusion of the Appellate Division on this question was reversed by the Court of Appeals in June, 1901. ( 167 N.Y. 405.)
In the case of National Cash Register Company v. Schmidt, as reported ( 48 App. Div. 472), it is not disclosed whether the action was brought to recover the purchase price agreed upon or any past due installment of the purchase price, or whether it was brought for damages on account of a breach of the contract by the buyer. From the opinion in the case it would appear that the action was for damages. The learned justice writing the opinion, after stating the facts as to the breach, says: "He, therefore, became liable in damages for non-acceptance under the rule that when a vendor has not transferred to the buyer the property in the goods, which are the subject of the contract, the vendor's only right of action against the buyer is to recover damages for his refusal to accept the thing sold. (Benj. Sales, [7th Am. Ed.] § 758.)" The learned justice in this very general declaration of a rule of law, that such is the only right of action, fails to give credit to the author of that work on Sales to a modification and limitation on the rule found in the same edition at section 762, and in these words: "Although in general the vendor's recovery in damages is limited to the difference between the price fixed in the contract and the market value on the day appointed for the delivery, — according to the rule as stated by PARKE, B., in Laird v. Pim (7 M. W. 478) * * * there may be special terms agreed on in conflict with this rule. A vendor may well say to a buyer, `I want the money on such a day, and I will not sell unless you agree to give me the money on that day, whether you are ready or not to accept the goods,' and if these terms be accepted, the vendor may recover the whole price of goods, the property of which remains vested in himself. In such a case the buyer would be driven to his cross action, if the vendor, after receiving the price, should refuse delivery of the goods." This does not support the learned justice writing the opinion in National Cash Register Company v. Schmidt, to wit: "That when a vendor has not transferred to the buyer the property in the goods, which are the subject of the contract, the vendor's only right of action against the buyer is to recover damages for his refusal to accept the thing sold." But this holds a doctrine just the contrary. However, no other authority for the declaration is cited by the learned justice.
In the following cases the precise question involved in the case at bar was ably discussed and decided: Brewer v. Ford (54 Hun, 116), in which the opinion was written by BARKER, J., and Marvin Safe Co. v. Emanuel (21 Abb. N.C. 181; S.C., 14 N Y St. Repr. 681). These cases hold that the seller, under a contract like the one here considered, may sue for and recover each installment of the purchase price as it matures. I have been unable to find any case where it was apparent that this question was directly involved which holds to the contrary. Upon both reason and authority, therefore, the judgment in this case should be reversed.
Judgment reversed, with costs, and with costs in the courts below, and a new trial granted in the City Court of Albany.
All concurred, except PARKER, P.J., dissenting.
Judgments of the County Court and City Court of Albany reversed, with costs, and costs in the courts below and a new trial granted in the City Court of Albany; order to be settled by KELLOGG, J.