Hearing In Bank Denied.
Appeal from a judgment of the Superior Court of Tulare County. William W. Cross, Judge.
A conditional sale of personal property by which the title is to remain in the vendor until the performance of some act or the happening of some event, even though the property has been delivered to the vendee, is valid; and a purchase thereof by an innocent third party in no way affects the title of the vendor, even where the promise to pay is absolute. (Civ. Code, secs. 707, 708; Putnam v. Lamphier , 36 Cal. 152; Robinson v. Haas , 40 Cal. 474; Kohler v. Hayes , 41 Cal. 456; Hegler v. Eddy , 53 Cal. 598; Sere v. McGovern , 65 Cal. 244; Zuchtmann v. Roberts , 109 Mass. 53; 12 Am. Rep. 663; Loomis v. Bragg , 50 Conn. 228; 47 Am. Rep. 638; Lewis v. McCabe , 49 Conn. 141; 44 Am. Rep. 217; Sumner v. Woods , 67 Ala. 139; 42 Am. Rep. 104; Haak v. Linderman , 64 Pa. St. 499; 3 Am. Rep. 612; Ketchum v. Brennan , 53 Miss. 596; Ballard v. Burgett , 40 N.Y. 315; Redewell v. Gillen , 4 N.M. 78; Sanders v. Keber, 28 Ohio St. 636; Bailey v. Harris, 8 Iowa 331; 74 Am. Dec. 312; Moseley v. Shattuck, 43 Iowa 543; Morgan v. Kidder , 55 Vt. 370; Freeman on Executions, sec. 124; Harkness v. Russell , 118 U.S. 663; Heryford v. Davis , 102 U.S. 235.)
Bradley & Farnsworth, for Appellant.
Lamberson & Middlecoff, Davis & Allen, and C. L. Russell, for Respondents.
The contract set out in the findings was not a conditional sale. The execution of the contract, the delivery of the sheep in pursuance thereof, and the payment of the consideration, constituted an absolute sale with an attempt to create a lien in favor of the vendor. (Civ. Code, secs. 1721, 2872; Code Civ. Proc., sec. 1180; Palmer v. Howard , 72 Cal. 293; 1 Am. St. Rep. 60; Hart v. Barney etc. Co ., 7 F. 553; Heryford v. Davis , 102 U.S. 235.)
JUDGES: Harrison, J. Garoutte, J., and Van Fleet, J., concurred.
May 14, 1892, Jose Sefreno Silva was the owner and in possession of certain sheep then in the county of Tulare, and on that day entered into a written agreement with Joaquin Coelho Barberia and his copartners, which was signed and executed by all the parties thereto, and is as follows:
" For and in consideration of the agreements hereinafter mentioned, I, the said Jose Sefreno Silva, of the first part, do hereby contract and agree to sell to the said Joaquin Coelho Barberia and Joaquin Goncafus Denes, and Joaquin Coelho Dronellez, and Jose Martins, all being copartners, 2,132 sheep, consisting of 902 lambs, and 1,230 ewes -- consideration to be paid as follows, to wit: $ 2,374.70 cash paid to-day, the receipt whereof is hereby acknowledged; the balance in two equal payments, $ 1,559.65 payable May 1, 1893, $ 1,559.65 payable October 1, 1893, all to draw interest at ten per cent per annum, interest payable annually.
" It is hereby contracted and agreed by all parties that the said second parties are to take and run the aforesaid sheep until the expiration of the aforesaid named payments, free of charge, to the said Jose Sefreno Silva; to have the wool, and sell or dispose of the same, to run the sheep. It being further contracted and agreed that the sheep are to remain and be the property of the said Jose Sefreno Silva, and that the title of the sheep is to remain and vest in him, his heirs, and assigns until the aforesaid payments are made. It is further contracted and agreed that the said Silva is to give a bill of sale at the time when all the payments are made, and it is further contracted and agreed that in the event that the second parties desire to pay the said Silva on or before the time heretofore mentioned, together with the interest accrued, then he, the said Silva, hereby contracts and agrees to then make a bill of sale to the second parties, or their order, or heirs, or assigns.
" It is further contracted and agreed by the second parties that in the event anything should occur that they, the said second parties, should fail to cause the aforesaid payments to be made, or should fail to [42 P. 449] keep the sheep and their increase up to the present worth, then it is hereby contracted and agreed that the said Silva, his heirs, order, or assigns, shall have the power to take possession of this band of sheep at any time, and sell the same to best advantage, and apply proceeds to the payment of this contract, and if any moneys be left, then same is to be paid to the said heretofore named second parties, their order, heirs, or assigns."
On the day that the contract was executed the parties of the second part paid the sum therein recited to have been paid, and took possession of the sheep, and on May 2, 1893, they made the second payment therein provided for. They remained in possession of the sheep until August 8, 1893, when the sheep were sold and delivered to the defendants by the sheriff of Tulare county, under an execution regularly issued against the said Barberia et al. In August, 1892, Silva sold and assigned to the plaintiff his interest in the sheep, and also assigned to him his interest in the above agreement. At the time of the purchase of the sheep by the defendants, and prior thereto, they had notice that the plaintiff claimed the sheep. The payment provided in the agreement to be made October 1, 1893, has not been made, and on October 4, 1893, the plaintiff demanded the sheep of the defendants, and on their refusal commenced the present action for their recovery, and under proceedings had therefor obtained possession of the sheep. The cause was tried by the court, who made findings in favor of the defendants, and rendered judgment accordingly. The plaintiff has appealed directly from the judgment upon the judgment-roll alone, without any bill of exceptions.
It cannot be controverted that it was the purpose of the parties when they entered into this agreement to provide that the ownership of the sheep should remain in Silva until he should have received the price at which he had agreed to sell them. Neither can it be controverted that the owner of property may include in any executory agreement for its sale which he makes any conditions which he may desire to insert, and make their performance essential before he shall be deprived of his ownership. One who has the absolute ownership of property "may use it or dispose of it according to his pleasure, subject only to general laws." (Civ. Code, sec. 679.) The right of an owner to sell his property upon the condition that he shall not be divested of the title thereto until the price has been paid is not only not prohibited by the laws of this state, but has been frequently recognized. (Kohler v. Hayes , 41 Cal. 455; Hegler v. Eddy , 53 Cal. 597.) In Harkness v. Russell , 118 U.S. 663, may be found an exhaustive discussion of this subject by Mr. Justice Bradley, in which he has presented the history of the law in reference thereto, both in England and in the several states of this country, and in which it was held "to be established by overwhelming authority that, in the absence of fraud, an agreement for a conditional sale is good and valid, as well against third persons as against the parties to the transaction; and that a bailee of personal property cannot convey the title, or subject it to execution for his own debts, until the condition on which the agreement to sell was made has been performed."
The question is always one of intention, and whenever, upon a proper construction of the instrument, it is apparent that it was the intention of the parties thereto that the sale should be conditioned upon the payment of the price, it is the duty of the court to carry out that intention. The agreement in the present action is purely executory, and contains no terms consistent with a purpose to transfer the title to the sheep before the price had been fully paid. It is distinctly agreed "that the sheep are to remain and be the property of the said Silva, and that the title of the sheep is to remain and vest in him, his heirs, and assigns until all the aforesaid payments are made." This intention to retain the title to the sheep was not defeated by their delivery to the vendees. The transfer of the possession of personal property does not convey the title, except in pursuance of an agreement therefor. The vendees became only bailees of the sheep, with the obligation on their part to "run" them until the time of the last payment, and, as a consideration therefor, they were to have the wool grown by the sheep. The vendees were not, by the agreement, under any obligation to make the payments specified therein, and, in this respect, the agreement differs in a marked degree from that involved in Palmer v. Howard , 72 Cal. 293, 1 Am. St. Rep. 60, relied upon by the respondents. In that case St. Clair made an absolute promise to pay the price named in the instrument, and this was assigned by the court as one of the chief reasons why the agreement should be construed as a sale, rather than a bailment; whereas, in the present case, there is no agreement to pay the price, or by which Silva could have maintained any action against the vendees for any part thereof. If the sheep had perished or been destroyed without any fault of the vendees, the loss would have been that of Silva, and if he had resumed possession under the clause authorizing him to do so upon failure to make the payments, and, upon a sale of the sheep, had not obtained the amount of the agreed price, he would have had no recourse against them for the deficiency.
The provision in the present instrument that Silva was to give a bill of sale at the time when all the payments should be made indicates that the parties contemplated that, until that time, the title should remain in him, and, in this respect, also, the present case differs materially from the agreement which was presented in Palmer v. Howard. In Kohler v. Hayes, supra, it was said: [42 P. 450] "The provision for the giving of a bill of sale upon the payment of the price of the piano indicated that it was not the intention of the parties that the title should pass upon the making of the agreement." We are of the opinion that the instrument in question created only a conditional sale, and that the plaintiff was entitled to recover the sheep from the defendants.
The judgment is reversed, and the court below is directed to enter judgment upon the findings in favor of the plaintiff.