Opinion
Hearing Granted by Supreme Court Sept. 12, 1927.
Appeal from Superior Court, Orange County; R. Y. Williams, Judge.
Suit by American Fruit Growers, Inc., of California, against Calvin E. Jackson and the Fidelity & Deposit Company of Maryland. Judgment for defendants, and plaintiff appeals. Affirmed.
Johnson, Justice pro tem., dissenting.
COUNSEL
W. H. Wadsworth, J. N. Owen, and Bordwell & Mathews, all of Los Angeles, for appellant.
Scarborough, Forgy & Reinhaus, of Santa Ana, and Fred Forgy, of Berkeley, for respondents.
OPINION
THOMPSON, J.
This action was brought against the sheriff of Orange county and his surety to recover the value of certain farm equipment claimed by the plaintiff as its property, and which was seized by the sheriff on February 25, 1922, as the property of H. J. Osborne under a writ of attachment in an action brought by the Irvine Company, as plaintiff, against Osborne, as defendant. Subsequent to the attachment and on March 2, 1922, the plaintiff served on the sheriff a third party claim, asserting its ownership of the property and demanding its release. Surrender was refused and the plaintiff brought this action for conversion. Judgment was rendered in favor of the defendants and the plaintiff appeals.
The court found that plaintiff was not the owner of the property in dispute, but that, with certain exceptions not necessary to be noted here, the property seized belonged to Osborne. While appellant has assigned four different reasons why the judgment should be reversed, they are in fact but one attack upon the judgment for the reason that the evidence does not support the finding. It is assumed by appellant that the court based its judgment upon the theory that certain statements of account, which were rendered by plaintiff to Osborne and retained by him without objection, created an account stated. The respondents insist that:
"The findings and judgment of the court are based on the theory that title to the property which is the subject of this action had passed to Osborne, and that statements sent Osborne to which he did not object were evidence of this fact and of the exercise of the option embodied in the farming contract."
As indicated by this quotation, there existed a written contract between the plaintiff and Osborne for the production of vegetables by the latter as a lessee of lands of the Irvine Company, under which the plaintiff agreed to furnish Osborne with the necessary stock and implements and to advance to Osborne such money as might be necessary for the production of his crop of vegetables, and Osborne in turn agreed to deliver all his vegetables to the plaintiff for sale on commission. This agreement gave Osborne an option continuing until July 1, 1921, to purchase the farm equipment at invoiced price as shown by a designated inventory. On March 17, 1921, the plaintiff rendered a statement to Osborne which showed an item under the date of February 18, reading "Trapp Estate equip. $10,000." On April 30, 1921, another statement was sent, including the charge for the equipment item, again on July 15, 1921, and December 8, 1921, and lastly on February 14, 1922. These statements also show that Osborne was not successful in repaying the advances made to him, but was continuously in plaintiff’s debt on account thereof. The plaintiff’s testimony explanatory of the mailing of these statements to Osborne is in effect that plaintiff’s vice president, who had charge of the finances of the plaintiff in California, wanted the information in a concrete form so that he might be guided in making his advances to the corporation. A portion of Osborne’s testimony is as follows:
"Q. Did you at any time or in any way take up the matter of the option with the American Fruit Growers that is set out in that agreement?
"The Witness: Do you mean did I go to them or tell them at any time?
"Q. Yes. A. No; I didn’t.
"Q. Did you ever pay the American Fruit Growers the invoice price as set forth in that agreement, or any other price for the equipment?
A. No.
"Q. Which I show you as listed under paragraph 5 of the plaintiff’s complaint?
A. No; I never paid them any money at any time." On cross-examination, Osborne testified that he received the statements referred to and noticed the equipment item in the March statement, and that the debit items carried forward in subsequent statements included the amount of that equipment debit, and that he made no protest. On redirect examination, the following took place:
"Q. Did you ever have any conversation with Mr. Fogg, treasurer and vice president of the American Fruit Growers, regarding your account?
A. In what way do you mean?
"Q. Well, in regard to any matters?
A. No; except that once in a while he would bring down a paper, and he would say, ‘Do you think you will ever pull out of this?’ and he would show me figures this long.
"The Court: Looked dubious to you, did it?
A. It did. ***
"Q. I will ask you, did you ever own it [the equipment] at that time? ***
A. Well, I didn’t feel like I could go out and sell it.
"Q. What do you mean by that? The question is, Did you ever own the property? ***
A. Well, I never felt really clear about it myself; seemed it was charged to me, and yet I knew I hadn’t paid any money on it, I had never exercised my option.
"The Court: Did you realize that the cost of celery, whatever it was, ran up so many thousand dollars, that would be taken out of it if you let the account stand that way? A. It was my choice.
"Q. Well, if you let the accounts come to you and not make any objection to the statement of your account?
A. Yes; I had always figured if the cauliflower or the cabbage ever brought enough money I would buy it, but as it was, my cabbage and cauliflower never brought enough money to pay out.
"Q. Bought it at that price, even if it deteriorated down to nothing?
A. To nothing; yes, sir.
"Mr. Wadsworth: If the court please, the option only ran to the 7th day of July, 1921, which was only nine months after he went into possession of it. If I may say, it would not have deteriorated to nothing, wouldn’t have time in that time.
"The Court: I was just asking how
"Mr. Wadsworth: I want to bring out he had to exercise his option by a certain time or he lost that right."
Osborne was asked, on cross-examination, whether on the day of the attachment he had not stated at the office of the Irvine Company, in the presence of J. H. Breckenridge, its secretary and treasurer, and of C. J. Cogan, assistant to the superintendent, that he was the owner of the equipment. Osborne denied that he had said that he was the owner, but stated that what he did say was that it was charged to him, and he showed the gentlemen named his contract. Mr. Breckenridge and Mr. Cogan do not precisely agree in their versions of what was said to Osborne. Breckenridge testified that Osborne said he owned the property and showed them plaintiff’s statements upon which he had been charged with it. Cogan, however, testified:
"Osborne stated he considered himself the owner of that property as it had been charged to him on a statement which he produced."
We do not agree that if the statements sent to Osborne and acquiesced in by him constitute an account stated the question in this case is concluded, but rather that the vital question is whether the statements mailed by the plaintiff and the acts and declarations of Osborne with respect thereto constitute evidence of an exercise of the option and the transfer of title. If they do, in fact, constitute evidence by way of admissions, then the explanatory testimony given by the plaintiff’s witnesses merely raises a conflict in the evidence and the judgment of the trial court upon that question must be taken as final, for, as has been so many times stated, it is not the province of this court to interfere with the judgment of the trial court when there is any substantial testimony to support it. It has been decided by the Supreme Court in Wilson v. Hotchkiss, 171 Cal. 617, 154 P. 1, L. R. A. 1916F, 389, Ann. Cas. 1917B, 570, that where a vendee is in possession of personal property as was the case here, in one capacity, that it is sufficient to establish that possession is held in the new capacity of owner by oral declarations or by acts of dominion over the property inconsistent with his former holding. In other words, in this case so long as the option remained unexercised there was no obligation on the part of Osborne to pay any amount on account thereof, and so there was no occasion prior to the expiration of the option by limitation of time for the plaintiff to have mailed statements charging him with the purchase price, and also if the option had expired by limitation of time without exercise there was no occasion for the plaintiff to charge Osborne with the purchase price.
These statements constituted admissions inconsistent with the former holding by Osborne of possession of the property as a lessee. While the case of Wilson v. Hotchkiss, supra, is upon a somewhat different question, nevertheless its principle and declaration as to what constitutes evidence are clearly applicable here when it says:
"Where a sale is made to a vendee in possession, whatever may have been the nature of his prior possession, the law does not require a quitting of it and a retaking of possession as the new owner. Snider v. Thrall, 56 Wis. 674, 14 N.W. 814. All that is required is evidence showing that the possession is retained by the vendee in his new capacity of owner. And what evidence will establish this? Manifestly it may be established by proof of acts of dominion over the property inconsistent with his former holding as bailee or pledgee, but equally may it be established by his declarations that he so holds the property as owner. On principle this must be so, for it would indeed be strange if a pledgee, formally reciting the oral contract by which he had purchased the property and declaring that he held possession of it no longer as pledgee but as absolute owner, could have the evidence of these declarations excluded from the consideration of the jury upon the ground that they were mere declarations and not a part of his acts or conduct in dealing with the property. They are essentially a part of his acts and conduct, and so we find it declared as ‘well settled that any acts of the parties indicative of ownership by the vendee may be given in evidence to show the receipt and acceptance of the goods to take the case out of the statute of frauds. Conduct, acts and declarations of the purchaser may be given in evidence for that purpose.’ Garfield v. Paris, 96 U.S. 557, 24 L.Ed. 821. And without multiplying citations, reference may be made to Browne on Statute of Frauds, § 321e, where he states: ‘The conduct of the buyer showing an acceptance *** may be drawn *** from what he says.’ And again quoting from the same author, page 433, footnote, ‘An examination of the cases will show that evidence has uniformly been received even in New York of the conduct of the parties, i. e., what they did and said, without in any way discriminating between acts of doing and acts of saying.’ See, also, Mechem on Sales, § 382; Williston on Sales, § 87."
While statements made by Osborne could not be binding on the plaintiff if not made in the presence of one who could bind it, yet we feel constrained to hold that the acquiescence of Osborne to the statements is some evidence to contradict his statement that he had not purchased because in an analogous situation the Legislature has provided in section 1870 of the Code of Civil Procedure, subdivision 3, that, "An act or declaration of another, in the presence and within the observation of a party, and his conduct in relation thereto" may be proved on the trial. While these statements were not made literally within the presence of Osborne, nevertheless they were received by him and were such as to naturally call for a correction if they were not true. His acts and declarations with respect thereto constitute some evidence at variance with his denial of purchase. Estate of Snowball, 157 Cal. 301, 107 P. 598.
By section 1140 of the Civil Code it is provided that:
"The title to personal property, sold or exchanged, passes to the buyer whenever the parties agree upon a present transfer, and the thing itself is identified, whether it is separated from other things or not."
It has been uniformly held that whether title passes or not is a matter of intention. Kohler v. Hayes, 41 Cal. 455; Palmer v. Howard, 72 Cal. 293, 13 P. 858, 1 Am. St. Rep. 60. Two important items in determining the intention of the parties are delivery of possession and unconditional promise of the vendee to pay. In fact, it is stated in Benjamin on Sales (7th Ed.) p. 373, American note, that:
It is "uniformly agreed as stated in the last note, that a delivery to the carrier of goods duly directed to the buyer, either with or without a bill of lading in his favor, ordinarily passes the title instantly, but that the seller may avoid this conclusion by appropriate acts or words. ***"
In this case Osborne had been vested with the possession of the property and the statements sent to him and to which he acquiesced indicated an unconditional promise on his part to pay the purchase price. Hence the trial court was justified in finding from this evidence that the option had been exercised and the title transferred.
Judgment affirmed.
I concur: CRAIG, J., Acting P. J.
JOHNSON, Justice pro tem.
I find myself unable to concur in the affirmance of the judgment, which, to my mind, makes a forced gift of plaintiff’s property to the Irvine Company, the attaching creditor of its tenant, Osborne.
It is stated in plaintiff’s opening brief that the trial court’s decision was based on the theory that the accounts, submitted by plaintiff to Osborne and retained by him without objection, created an account stated, whereby title was shown to have been transferred from plaintiff to Osborne, and the defendants acquiesce in this statement. I think, therefore, that the accounts and the testimony explanatory of the equipment item should receive more attention than has been given them in the majority opinion.
Osborne leased from the Irvine Company certain farm lands which had previously been under lease to Roy D. Trapp, who had died. Part of the assets of Trapp’s estate consisted of the equipment in question, which plaintiff purchased in September, 1920, for $10,000. Under date of September 1, 1920, plaintiff and Osborne entered into their agreement whereby, among other things, plaintiff agreed to let Osborne have the use of this equipment in his farming operations, and to advance him also such money as he might need for his crops, and Osborne in turn agreed to deliver his vegetables to plaintiff for sale on commission. The agreement further gave Osborne an option until July 1, 1921, to purchase the equipment at the cost price to plaintiff.
Osborne continued his farming operations until the time of the Irvine Company’s attachment in February, 1922, but did not at any time expressly or affirmatively exercise his option to purchase the equipment from plaintiff, nor did he ever receive a bill of sale or its equivalent. No transfer of title to the equipment took place by any overt act of the parties, nor was there any outward circumstance evidencing such transfer. The contention of the defendants is, however, that a change of ownership was brought about by reason of the fact that plaintiff sent Osborne certain transcripts from plaintiff’s books of account and on receipt of those transcripts Osborne remained silent.
From these facts it is concluded not only that there was an exercise of the option by Osborne, but that, without payment of a single dollar, the title to $10,000 worth of plaintiff’s property was forthwith bestowed on Osborne and placed at the disposal of his creditors.
Up to February 18, 1921, whatever records were kept by plaintiff in reference to the equipment were kept in an account separate from the vegetable account of Osborne. At the date mentioned plaintiff’s vice president and treasurer, Mr. Fogg, who had come from the east at the instance of what he calls plaintiff’s parent company at Pittsburg, to watch the finances of the subsidiary California corporation, caused the equipment account to be combined on plaintiff’s books with Osborne’s vegetable account. This was done without conference with Osborne and on Fogg’s own initiative; and the memorandum giving this instruction to the bookkeeper contained the following explanatory notation:
"To combine accts. This is purely a suspense item but transferred to Osborne’s acct. for the purpose of showing at all times amount of money invested by A-F-G in this project."
And Fogg in his testimony said:
"I wanted this information in a concrete form to guide me in making my advances for this corporation."
It is quite apparent that there was no intention at this time on plaintiff’s part to treat the equipment as having been sold to Osborne.
According to the vegetable account, as it stood at the beginning of February, 1921, Osborne had a debit balance against him of $9,702.91 for plaintiff’s advances for his farming operations. No further statement was rendered to Osborne until March 17th. The statement then rendered began on the debit side with the previous balance of $9,702.91, and showed, besides certain money advances, the item under the date of February 18, reading, "Trapp estate equip. $10,000." With this item added, the debit balance was made by this account to appear as $21,340.41. The next statement dated April 30, 1921, started with the debit of $21,340.41, and, after adding debits for further advancements and giving credits arising from sales, showed a net debit at the close of April of $16,888.28. This included, of course, the amount of the item which had appeared in the March statement regarding the equipment. On July 15, 1921, another statement was sent to Osborne, beginning with the debit balance of $16,888.28 shown by the previous statement, and by reason of the excess in proceeds of sales over intermediate advances, the debit balance was shown at that time to have been reduced to $15,112.42, including still the March item in relation to equipment. Then on December 8, 1921, there was submitted a statement beginning with the previous debit balance of $15,112.442, and showing an increase, through additional advances, to $21,752.41. The remaining statement introduced in evidence is dated February 14, 1922, which, taking the debit balance of the December statement and continuing the account, showed a reduction of the debit balance, through sales of vegetables, to $18,871.52. Two copies of this statement were put in evidence, one bearing the pencil notation "Bookkeeping purposes only," the other not. If from each of the debit balances shown in the foregoing statements, beginning with that of March 17th, the sum of $10,000, representing the cost price of the equipment, is deducted, it will be seen that on his vegetable account Osborne was continuously in plaintiff’s debt, and was at no time in position to buy the equipment.
From the record I am satisfied that it appears without contradiction that on plaintiff’s part there was no intention of doing anything more than to consolidate in one account, for plaintiff’s own information and guidance, the records of all its outlays and all receipts from sales in connection with the Osborne contract, so as to ascertain by reference to that one account how plaintiff’s expenditures compared with its receipts.
The way in which the matter was regarded by Osborne is shown by the excerpts from his testimony set forth in the majority opinion. He there says that he knew that he had never paid anything on the equipment; that he did not feel that he "could go out and sell it"; and that he had never exercised his option.
Reference is made in the majority opinion to a conversation between Osborne and representatives of the Irvine Company on the day of the attachment, at which time, according to the testimony of Breckenridge secretary and treasurer of the Irvine Company, Osborne stated that he owned the property and also exhibited plaintiff’s statement of account. This conversation was not in the presence of any representative of plaintiff, and Osborne denied that he had said that he was the owner. Assuming, however, that the trial judge accepted Breckenridge’s version of the conversation, I do not follow the reasoning of the learned Justices with whom I am associated in this case, that such ex parte declaration of Osborne, because inconsistent with his position as a licensee, was evidence against plaintiff of a completed sale. The cases cited in support of that view are cases wherein a controversy arose between the immediate parties to the transaction, involving the question whether possession originally held as a bailee or pledgee had subsequently been transformed into possession held as a vendee in the capacity of owner. In such cases declarations of the defendant admitting his ownership were, of course, admissible against him in disproof of a contention on his part that his original possession remained unchanged in character. Osborne is, however, not a party to this action; and there being no similar situation here, I am unable to perceive the applicability of the cases cited. The declarations said to have been made by Osborne to these strangers to his transaction with plaintiff were but extrajudicial expressions of opinion, and could not speak into being an ownership which did not in fact exist. McClenahan v. Keyes, 65 Cal.App. 467, 473, 224 P. 241.
There could have been no ownership in Osborne unless there has been an acceptance of his option accompanied by acts sufficient in law to work a transfer of title. Whether there had been such an acceptance of the option and a change of title must depend on the inferences reasonably to be drawn from the evidence as a whole; and in dealing with the evidence, we are to consider not only the nature and state of the accounts themselves in connection with the retention of them by Osborne without protest, but also the relations of the parties and the bearing of their acts and conduct upon the ownership of the equipment.
The affirmance of the judgment implies that the evidence is sufficient to justify the inference that Osborne exercised his option, and then to impose upon that inference the further inference, piled like Pelion upon Ossa, that without performing any condition of payment, Osborne became vested with absolute ownership. The basis relied upon for that ultimate conclusion is the receipt and retention of the accounts.
In so far as the statements of account are concerned, it does not follow that because they were received without objection, they were, as defendants contend, converted into accounts stated. The plaintiff and Osborne had their written agreement; and when there is a previous written agreement defining the rights of the parties, a departure from that agreement, whereby certain unwarranted charges are made in an account rendered, will not necessarily conclude the debtor, even though he keeps silent and lets the account stand as rendered. For where one rendering an account knows that he has included items against the other that he had no right under their contract to include, retention of the account does not make it an account stated or create an estoppel. Blanck v. Pioneer Mining Co., 93 Wash. 26, 159 P. 1077.
In determining whether we have a stated account, or merely a bookkeeper’s current account exhibiting the excess of plaintiff’s expenditures over receipts, in the account of March 17, 1921, in which the item of equipment first appeared, and which showed, with that item, included, a debit balance of $21,340.41, we must look at the situation of the parties at that time and their relation to each other. Osborne had begun his farming operations in the preceding September. For use in cultivation under his contract, he had been supplied by plaintiff with $10,000 worth of equipment, and plaintiff had advanced all the money for making his crops. Yet the sale of the crops had never produced enough to place a dollar to Osborne’s credit on the books; and under his contract he had merely an option until July 1, 1921, to purchase the equipment at cost price to plaintiff. Apparently his only hope of being able to exercise the option and become owner of the equipment was out of the profits that might come from sales of his produce, and Osborne’s ability to buy, as the trial judge remarked, "looked dubious."
The reasons for consolidating the equipment and the vegetable accounts were explained by plaintiff’s vice president and treasurer, and show beyond peradventure that there was no intent on plaintiff’s part to effect a transfer of title; and without mutual intent minds cannot possibly meet. Osborne’s testimony shows that he and plaintiff were continuing their operations after the time limited for exercise of the option and until the time of the attachment in the hope that the situation might better itself, and while their relations continued, statements were submitted at irregular intervals. But never at any time did the parties come together and definitely agree on any balance due plaintiff, nor was anything ever done in the way of payment for any of the equipment. There was at all times an entire absence of that finality in the adjustment of the financial relations which is essential to the creation of an account stated.
Respecting the accounts the case is something like that of Newburger-Morris Co. v. Talcott, 219 N.Y. 505, 114 N.E. 846, 3 A. L. R. 287, where there were transactions between a shipper of goods and a factor, who made advances against the merchandise and the net value of outstanding accounts. Monthly accounts current were submitted by the factor to the shipper and passed without objection. The question in the case was whether these statements were to be treated as accounts stated. It was held that they lacked the finality essential to the statement of an agreed account between the parties. In the course of its opinion, the court said:
"Here the relation was that of principal and factor under an agreement that was to last at least a year, and indefinitely thereafter unless terminated by notice of 30 days. Not till the contract was at an end did the duty to make advances cease. *** The debit balances shown by these monthly statements did not, therefore, constitute a present debt. They did not speak the language of present demand for payment or adjustment. *** They were provisional advices. They were not definitive demands. ***"
The case cited is followed in Watson v. Gillespie, 205 A.D. 613, 200 N.Y.S. 191, which involved accounts between the defendants, who were a London firm engaged in import and export business, and the plaintiff, who was their New York manager, receiving as part of his compensation a share of the profits. The parties followed a system of annual accounting, which the defendants contended stated each year a final account, but which the court held to be merely accounts current, saying:
"The fundamental principles of contract law apply to accounts stated. The minds of the parties must meet. The offeror cannot render a ‘current’ unsettled account as a basis for subsequent liquidation and be bound on an account stated by the offeree accepting the current account as a closed, settled account between the parties. The minds of the contracting parties, in such a case, do not meet. There can be no contract. This principle of law is clearly expounded by the Court of Appeals in the case of Lockwood v. Thorne, 18 N.Y. 285. The court said, at pages 288, 289: ‘The minds of the parties must meet upon the allowance of each item or claim allowed, and upon the disallowance of each item or claim rejected. They must mutually concur upon the final adjustment, and nothing short of this in substance will fix and adjust their respective demands as an account stated. *** And, as the minds of both parties are supposed to meet and concur, it must necessarily be competent to show how the party rendering the account understood the transaction. If the evidence should show clearly that he did not understand that there had been any final adjustment of their respective demands between them, it would be strange, if the courts should disregard the understanding of the parties themselves, and decree an adjustment between them contrary to their own understanding in the matter. "’
The mere submission of statements while transactions are in progress, and with no intention to strike a final balance, is not sufficient to make such statements accounts stated. The element of finality is one of the attributes of a stated account, and without that element no binding effect attaches. Mercantile Trust Co. v. Doe, 26 Cal.App. 246, 253, 255, 146 P. 692; Richmond D. Co. v. A., T. & S. F. Ry. Co., 31 Cal.App. 399, 409, 410, 160 P. 862; Suffern v. Mandell, 212 A.D. 1, 208 N.Y.S. 275.
The testimony as a whole, to my view, shows clearly that there was no meeting of minds between plaintiff and Osborne in relation to purchase of the equipment, and that neither understood that there had been any exercise of the option. That being so, the account, whatever its character, cannot be made an instrument to create a liability where none existed before. Bennett v. Potter, 180 Cal. 736, 746, 183 P. 156; Stimson Mill Co. v. Hughes, 8 Cal.App. 559, 561, 97 P. 322; Dawson T. Co. v. Rosenberg I. & M. Co. 63 Cal.App. 489, 491, 218 P. 782. There had certainly been nothing evidencing in any wise an acceptance of the option when the equipment item was first entered in the account of March 17, 1921, and, in my judgment, the retention of that and subsequent statements by Osborne, without anything further, fell far short of the requirements for a transfer of title. Even if Osborne had given written notice of election to purchase, such election, standing alone, would not have operated ipso facto to change the ownership. Transfer of personal property is effected upon a sale only through a contract that has been executed. There must, in the first place, be the requisite meeting of minds in an agreement, but until the agreement is supplemented by acts of a character sufficient to vest title in the vendee, the title remains in the vendor.
I am unable to find sufficient in the evidence to justify the inference that Osborne ever became obligated for the equipment. But if, notwithstanding the circumstances surrounding the accounts, the retention of them were to be deemed tantamount to an express exercise of the option, I lack, nevertheless, the magic to distill from the evidence the elements necessary to transmogrify Osborne’s original possession as a licensee into the possession of an absolute owner. The exercise of the option could do no more than create an executory contract of sale. It could not operate ipso facto to clothe Osborne with plaintiff’s ownership. To have an executed sale, there must, in the first place, be the meeting of minds in an agreement, and in the second place, the agreement, when made, must be followed by performance-which is an entirely distinct phase of the transaction. The mere election could not both ripen Osborne’s option into a binding agreement of sale, and then, stopping there, arrogate all the benefits of a full performance. In the law of sales, it is an elementary rule that unless the contract otherwise provides, the covenant of the buyer to pay the price and that of the seller to transfer the title are mutual and dependent covenants to be contemporaneously performed. Dealing with an option to buy land embodied in the provisions of a lease, the Supreme Court, in Cates v. McNeil, 169 Cal. 697, 706, 147 P. 944, 948, said:
"What the respondents acquired under the option clause was an irrevocable right of option to purchase the property at a specified price if they should at the end of 10 years elect to do so and all that was necessary on their part to do as far as the terms of the option are concerned in order to constitute a binding contract for the sale and purchase of the premises was to give notice of their acceptance of the right. This they did. Payment of the purchase price at that time was not a condition required by the option and it is not for the court to incorporate terms in it which the parties to it did not incorporate or even mention. Of course, payment would be essential before respondents would be entitled to a conveyance of the land but that is a matter pertaining to the performance of the contract of purchase and sale which had been created by the acceptance. In the absence of anything in the contract itself the obligation of the parties in the performance of the contract is governed by the law applying generally to bilateral contracts for the purchase and sale of property under which the agreement or covenant of the vendor to convey and the vendee to pay the purchase price are considered mutual and dependent covenants and are to be performed contemporaneously by the respective parties."
In the present case the agreement between plaintiff and Osborne did not undertake to fix any time for transfer of title, in case the option should be exercised. The rule governing parties under such circumstances is expressed in Watson v. Coast, 35 W.Va. 463, 473, 14 S.E. 249, 252, as follows:
"Having thus a contract it simply remained for the parties or the law to execute it according to its terms, and so far as it does not prescribe, as prescribed by law; and the matter of payment is in this case as in ordinary cases of executory contract. The covenant or obligation to pay and that to pass title are mutual and dependent; the one cannot be required before the other is ready to be performed."
In like manner, it is said in Joyce v. Tomasini, 168 Cal. 234, 240, 241, 142 P. 67, 69:
"The agreement does not fix the time for the making of the deed in case the option should be exercised, nor does it expressly declare that the defendant will execute a deed. But the contract, in that event, would become an agreement to sell the land for the stated price, and by section 1731 of the Civil Code, such an agreement binds the seller to convey the title. In the absence of anything appearing to the contrary, covenants to pay the price on the one hand and to transfer the property on the other, are deemed to be dependent, and a conveyance would be due, in this instance, upon payment of the price. 1 Sugden on Vendors, bottom page 239."
It is not contended by defendants that Osborne either expressly exercised his option or that he ever made any payment on the equipment.
The fact that for farming purposes Osborne had possession of the equipment as a licensee would, of course, dispense with formal delivery in furtherance of any transfer of title, but it would not relieve him of the conditions necessary to be performed by him in order to complete the purchase and acquire title. Mere possession is not such an indicium of ownership as will bind the true owner, and Osborne was never held out to the Irvine Company as owner of the equipment. His possession rested on the crop agreement, whereby he had the privilege of using the equipment in his farming operations, and before his creditors could have legal recourse against the equipment, there would have to be an actual change of title.
It is quite a significant circumstance, indicating that plaintiff did not regard the title as being in Osborne, that plaintiff, in June, 1921, insured the equipment in plaintiff’s own name as owner. If the ownership had passed to Osborne, an insurance policy in plaintiff’s name as owner would have been valueless, and the very fact that plaintiff did take insurance in its own name shows that plaintiff was not recognizing any ownership in Osborne.
The findings against ownership in the plaintiff depend entirely on the inference that, because Osborne did not object to the accounts transmitted, the plaintiff forthwith lost its title, regardless of payment, and Osborne without so much as a gesture, became invested with sole, exclusive, and unconditional ownership, giving the attaching creditor a right to have the property sold at execution sale in satisfaction of Osborne’s debt.
To my thinking, the evidence is wholly insufficient to support the findings; and the judgment in favor of defendants, since it has the effect of expropriating plaintiff’s property to pay Osborne’s debt to the Irvine Company, should not be allowed to stand.