Opinion
Decided February 14, 1936.
Conditional sales — Vendor's remedies not inconsistent, when — Election of remedies — Taking judgment on notes securing purchase price and foreclosing vendor's lien — Contract not against public policy or contrary to law, when.
1. The taking of a judgment by a vendor of chattel property against the vendee for the balance due on a note given to secure the purchase price under a conditional sale contract providing that the chattel shall remain the property of the vendor "until the price or any judgment for same, is paid in full," and the issuance of execution out of the court rendering the judgment, upon which no levy is made, do not constitute an election of a remedy on the part of the vendor, inconsistent with a suit to enforce the vendor's equitable lien.
2. In such case the Uniform Sales Act permits title to be so reserved in the vendor, conditioned upon payment by the vendee, and such a contract is not against public policy or contrary to law.
ERROR: Court of Appeals for Montgomery county.
Mr. William E. Hoffer and Mr. Arthur Bryant, for plaintiffs in error.
Messrs. Scharrer, Scharrer, McCarthy Hanaghan, for defendant in error.
The question for determination is presented upon the pleadings of the parties and an agreed statement of facts. In the immediate action The National Cash Register Company sought a restraining order against the defendant, J. Vernon Groff, restraining him from disposing of, transferring or encumbering a cash register which in 1929 had been sold by the company to I.A. Bolinger, and asking for the sale of the property and distribution of the proceeds.
On or about October 1, 1929, the company sold a cash register to Bolinger for the sum of $330. Payments by allowance and cash were made totalling the sum of $184.50, and on May 3, 1933, there was a balance due of $115.50. The cash register was sold under a conditional sales contract, Bolinger being in default for the payment of the balance due on the note, representing monthly payments. Suit was instituted by the company against Bolinger in the court of a Justice of the Peace in Franklin township, Warren county, Ohio, and on May 3, 1933, judgment was taken for the balance due on the purchase price note, with interest and costs. In June, 1933, the company caused an execution on the judgment against Bolinger to be issued, upon which, thereafter, the constable made the return "Nothing Found." Soon after the issuance of the execution the defendant, Bolinger, transferred the cash register, the subject of the conditional sale, to Groff, receiving for the purchase price a credit on an account which Groff held against Bolinger. Nothing having been made upon execution from the court of the Justice of the Peace, the instant action seeking to enforce the lien of the company against the cash register was instituted. The conditional sales contract was duly filed, and among other provisions it contained the usual acceleration clause and this further provision: "The register shall remain your property until the price, or any judgment for same, is paid in full."
It is the claim of the defendants, which question they have raised appropriately, that the company has not the right to maintain the instant action and foreclose its equitable lien; that it made election to pursue its remedy at law in the action in the Justice of Peace Court, the taking of judgment in such court, and the issuance of execution on the judgment; that Groff having received the register after judgment taken in behalf of the company against Bolinger, and execution having issued on the judgment, has a prior right over the company to title and possession of the register. The trial court held with the company, made finding in its behalf and entered judgment as prayed in the amended petition.
The question for our consideration is: "Did the taking of judgment in the Justice of Peace Court by the vendor against the vendee for the balance due on the note for the purchase price of the cash register, and the issuance of execution out of said court, upon which no levy was made, constitute an election of a remedy inconsistent with the present suit to enforce an equitable lien?
We have here a special conditional sales contract under which the total balance due was unpaid when judgment was taken. Under the ordinary sales contract, namely, where the rights of the parties are not made the subject of special terms to the contrary, the seller upon default by the buyer, in payment of the purchase price, may (1) retake the property; (2) sue for the purchase price; (3) foreclose his lien. By the express terms of the contract in this case the buyer agreed that the "register shall remain your [the seller's] property until the price, or any judgment for same, is paid in full." So that, unless the contract is against public policy or prohibited by law, the taking of judgment on the note was not inconsistent with the status of title in the vendor, but strictly in accord with the agreement of the parties. We know of no bar to the making of such a contract, and therefore perceive no reason why it should not be enforced.
Execution was issued to the constable out of the court of the Justice of the Peace for the purpose of making a levy upon the goods and chattels of Bolinger. Had the constable levied upon chattels of Bolinger and disregarded the register, such action would have been consistent with the terms of the execution, but, if he seized the register and subjected it to his possession under the writ, then, and not until then, was the action such as to bind the vendor to an election to treat the title to the register as in the vendee, Bolinger. The vendor, having in effect done no more than to take a judgment on its note, could avail itself of the remedy of foreclosure of its lien. Parker Appliance Co. v. Co-Operative Machinery Co., 110 Ohio St. 255, 143 N.E. 891. Inasmuch as the action of the vendor in the court of the Justice of the Peace was not inconsistent with its retention of title under the conditional sales contract, Groff received no paramount right or title to the register under the transfer to him from Bolinger.
We have examined the one Ohio case germane to our immediate question, Albright v. Meredith, 58 Ohio St. 194, 50 N.E. 719. We do not have a copy of the conditional sales contract which the Supreme Court considered in the Albright case, and, therefore can not say whether it contained the language found in the contract in this case. There the vendor not only took judgment for the balance due on the purchase price, and issued execution thereon, but it caused a levy to be made and possession to be taken of the cash register. The court definitely grounds its determination that the vendor had elected to treat the property as that of the vendee upon the combination of several facts, namely, no purpose of the vendor to take the register under its conditional sale, the taking of judgment for unpaid installments or purchase price, and the seizure upon execution of the property which was the subject of the sale. The part which the seizure of the property in execution played in the decision of the court is manifest in the third paragraph of the syllabus, wherein it is said:
"If, instead of such course, [the rejecting of the goods by the vendor] the vendor recovers judgment at law upon the unpaid installments of purchase money, and causes the goods to be seized in execution, such seizure will be regarded as an election to treat the property as belonging to the purchaser." (Italics ours.)
There is nothing in the opinion or in the syllabus to indicate that the court meant to hold that any procedure which the vendor adopted until seizure of the property upon execution constituted an election to treat the property as that of the buyer.
We recognize that courts of many states in construing conditional sales contracts have held that a judgment taken for the full amount due on the purchase price is an election to treat the property sold as in the vendee, and a waiver by the vendor of any right either to take the property under the conditional sales contract or to enforce its equitable lien. There are, however, many decisions contra, and there has been a definite trend in authority to recognize terms in conditional sales agreements as expressly defining the rights of vendors, though in derogation of their rights at common law.
We will not undertake to cite authorities at length, but they may be found collated in the annotations in 12 A.L.R., 503; 37 A.L.R., 91; 83 A.L.R., 959. Much of the contrariety of opinion results from the difference in the language of the contracts under which the parties transacted their sales.
In Fuller v. Byrne, 102 Mich. 461, 60 N.W. 980, and E.E. Forbes Piano Co. v. Wilson, 144 Ala. 586, 39 So. 645, the courts had under consideration contracts of sale with provisos as to the passing of title identical with the terms of the conditional sale in the instant case. In both of these cases the courts held that the taking of judgments against the vendees did not release the lien on the property or pass title thereto to the vendee. Other cases with similar holdings, but predicated upon somewhat different language, are Sanitary Scale Co. v. Ryser, 262 Ill. App.?,? 657; In re Steiners Improved Dye Works, Inc., 44 F., (2nd), 557; Canadian Typograph Co. v. MacGurn, 119 Mich. 533, 78 N.W. 542; American Box Machine Co. v. Zentgraf, 45 N.Y. App. Div., 522, 61 N.Y. Supp., 417, 7 N.Y. Ann. Cas., 182.
Although it has not been urged, we are of the opinion that the rights of the parties in the contract here under consideration are defined and controlled by our uniform sales act, as the contract or action thus far taken thereunder is not in conflict with our conditional sales act. Conditional sales are expressly comprehended in Section 8381 (3), General Code; the intention of the parties will be ascertained by the terms of the contract, property sold will be transferred to the buyer when the parties intend it to be transferred, which intention shall be determined in part by the terms of the contract, Section 8398, General Code; and any right, duty, or liability arising under a contract to sell may be negatived by express agreement, Section 8451, General Code; and reservation may be made by contract of the right of property in the goods sold until certain conditions have been fulfilled, Section 8400, General Code.
It is our conclusion that the judgment of the trial court should be affirmed, and it will be so ordered.
Judgment affirmed.
BARNES, P.J., and BODEY, J., concur.