Summary
In Cornell v. Clark, 104 N.Y. 451 [10 N.E. 888], a case involving the purchase and sale of railroad ties, where the contract provided for the delivery of the ties monthly, "and the balance to be paid after inspection and classification of the ties, and `when they were taken and used,'" it was held that the title to the ties did not pass by the delivery but only after inspection and ascertainment of quality.
Summary of this case from Wanee v. ThomasOpinion
Argued January 28, 1887
Decided March 1, 1887
I.H. Maynard for appellant.
S.L. Stebbins for respondent.
It is plain that no title to the ties which were the subject of the contract between Munson and the Delhi and Middletown Railroad Company, passed to the company on the execution of the contract of December 20, 1871. The contract was then wholly executory. It is inferable from the evidence, that, at the date of the contract, the ties were for the most part uncut on the lands of Munson.
No part of the purchase-money had been paid, and by the terms of the contract no payment was to be made until the ties were delivered at the points designated. It is clear that no title in præsenti passed, or was intended to pass on the execution of the contract. This, however, is not decisive of the question in controversy. The decision turns upon the point whether there was a delivery of the ties in such sense as to vest the title in the railroad company. It is competent for parties to an executory contract for the sale of personal property, to provide in their agreement where and on what event the title shall vest in the vendee. If there is no express agreement on the subject, the question is to be solved by considering all the terms of the contract in connection with the acts of the parties, and applying thereto the rules of law applicable to the case. There is no express provision in the contract of December 20, 1871, upon the subject. It is insisted, however, that the contract provides for a delivery of the ties on the lands of the company, and that a delivery having been made pursuant to the contract that act was decisive on the question of title. It is doubtless true that the delivery of personal property to the vendee, under an executory contract of sale, is an important and often a controlling fact on the question of title. Where the delivery is absolute it furnishes the strongest evidence of an intent to pass the title. The voluntary surrender, by the vendor, of all dominion over the property is, as a general rule, inconsistent with the idea that the title is retained by the vendor. But if the delivery is for a special purpose, as where the property is put into the custody of the vendee to meet some term of the contract not inconsistent with the retention of title by the vendor, such a qualified delivery will not pass the title contrary to the intention. In looking at the contract of December 20, 1871, it is, we think, apparent that it was not contemplated that the title to the ties should pass, on the ties being deposited on the lands of the railroad company. The delivery provided for was for the purpose of inspection and selection. The payment to be made at that time was an advance, and the advance was to be made when the ties were deposited at the points designated. The company, by the contract, were to pay forty-five cents each for first-class ties, and thirty-five cents each for what "shall be adjudged" second-class ties, upon inspection pursuant to the terms of the contract. The company was not bound to take all the ties which might be delivered by the vendor, upon the lands of the company, upon which an advance might be made. It contracted to take only first and second class ties, according to the inspection of the person designated, or to be designated, as provided by the contract, who, in respect to this duty, was constituted the agent of both parties. The power of rejection was involved in the power of selection. The inspector might reject unmerchantable ties not coming within either of the classes mentioned. It could not be known until the inspection had been had and a separation made what part of the ties should be taken, or what number should be paid for, or what sum beyond the advance payment the company was bound to pay, or the vendors entitled to receive. It was not contemplated that there should be an inspection for the purpose of ascertaining the quality of the ties when the advance payment was made. The company could safely advance the fifteen cents on the whole number of ties deposited, but the final payment was to be made "when the ties were taken and used," and when the number and quality of the ties to be taken were ascertained by inspection, the "remainder" of the purchase-money would be known. The case is within the general principle that where anything remains to be done to ascertain and identify the subject of the sale, the title does not pass. What was left to be done was not simply to determine by count or by a division of the whole number of ties into two classes, the amount remaining unpaid, but it involved identification and specification also. The case is unlike Burrows v. Whitaker ( 71 N.Y. 291.) In that case the vendee was to take all the lumber delivered, irrespective of selection. Nothing remained to be done except its separation into classes. In this case the company was bound to take only such part of the ties as should be adjudged by the inspector to be first or second-class ties. The case is more nearly like the case of Stephens v. Santee ( 49 N.Y. 35); see, also, Lingham v. Eggleston, 27 Mich. 324; Bingham on Sales, 227 et seq. There are other circumstances which support the conclusion on this branch of the case. By one contract it was expressly agreed that the title should remain in the vendor until the purchase-money should be paid. A large number of ties were piled on lands of private persons, for which rent was paid by the vendors. It is claimed that the company accepted the ties and waived inspection. We think there was no sufficient evidence upon which the jury would have been justified in finding such acceptance or waiver.
But the defendant assails the title of the plaintiff, or rather he insists that the purchase by the plaintiff in 1875, enured as a purchase by the company, on the ground that the plaintiff, being at that time a director of the railroad company, was disabled from purchasing the ties on his own account, and that in fact he purchased them as agent for the company. The company discontinued its operations in 1874, and its property was sold on foreclosure in 1881. It had paid on the ties in 1872 and early in 1873, the advance payment amounting to $5,257.01, and though called upon to do so, made no further payment. In 1875 the vendors, through one Grant, applied to the plaintiff to become the purchaser of the ties, and it resulted in his agreeing to purchase the first-class ties at the price of thirty-five cents each, provided the vendors would "deduct therefrom what had been paid by the railroad company." This was assented to and the plaintiff paid for the first-class ties in cash the sum of $3,971.09. Subsequently, in 1879, he bought the culls at five or six cents apiece. The negotiation was for a sale to the plaintiff individually, and the receipts for the purchase-money paid by the plaintiff, recited a sale to him. It is not claimed that the plaintiff was authorized to purchase for the company, nor to advance any money on its account, nor is it denied that the $3,791.09 was paid by the plaintiff from his own means. The ties remained where they were orignally deposited until 1879, when they were removed by the plaintiff and were in his possession at the time of the levy by the defendant. Assuming that the plaintiff was disabled by the rule in equity from purchasing the ties on his own account, or from holding them as against the company, nevertheless the legal title was vested in him by the purchase, and the property could not be taken from his possession under an execution against the corporation. The plaintiff was not, in fact, the agent of the company, to make the purchase, nor has the company claimed the benefit of the purchase. The purchase by a trustee of trust property is voidable, not void. The company could only claim the benefit of the purchase by the plaintiff on reimbursing the sum expended by him in obtaining the title. The defendant claiming under the execution is not in a situation in this proceeding to question the plaintiff's title.
We think the verdict was properly directed and the judgment should, therefore, be affirmed.
All concur.
Judgment affirmed.