The insertion, in a contract of bailment or lease, of a provision giving an option of purchase at a fixed price, and, in case of its exercise, applying payments of rent then made to the purchase price, does not, as matter of law, turn the bailee or lessee into a conditional vendee. A sewer contractor stated to the plaintiff that he desired to rent one of its cableways, and might wish to buy it if he obtained a large job. After some negotiation as to the rental price and term of the lease it was finally agreed that the plaintiff should submit to the contractor, as it afterward did, a written proposition to lease the cableway for not less than four months at $200 per month, payable in advance, the rent to be applied on the purchase price of $3,150 if the contractor should conclude to buy within that period; if he should decide not to purchase at all he was to ship the cableway back to the plaintiff at his own expense and in good condition; and the title to the cableway was to remain in the plaintiff until paid for. The contractor accepted this proposition in writing and ordered the cableway. After using it for several months the contractor, having paid nothing on the rent, abandoned it and also his job, and the defendants attached the cableway as his property, upon the ground that the contract was one of conditional sale which had not been acknowledged and recorded as the statute (§§ 4864, 4865 as amended by Chap. 113 of the Public Acts of 1905) required. Held that there was nothing in these facts which impugned the conclusion of the trial court that the contract was one of bailment and not one for a conditional sale. The question of whether a contract is in reality what it purports to be on its face, or is a mere pretense to give a false appearance to the agreement which the parties actually made, is one of fact to be settled by the trial court upon a consideration of all the circumstances attending the transaction, among which the preliminary negotiations may be of importance.
BALDWIN, J.
By General Statutes, §§ 4864, 4865, and Public Acts of 1905, p. 324, Chap. 113, all contracts for the conditional sale of personal property, other than household furniture, musical instruments, phonographs, and phonograph supplies, bicycles, or property exempt from attachment and execution, "shall be in writing, describing the property and all conditions of said sale, and shall be acknowledged before some competent authority and recorded within a reasonable time in the town clerk's office in the town where the vendee resides;" and all conditional sales of personal property not made in conformity to these provisions "shall be held to be absolute sales, except as between the vendor and vendee or their personal representatives, and all such property shall be liable to be taken by attachment and execution for the debts of the vendee, in the same manner as any other property not exempted by law."
There is nothing in the facts specially found which militates against the conclusion of the Superior Court that the contracts on which the defendants rely in support of their attachments were contracts of bailment, and not contracts for a sale.
While the dress in which the parties to a conditional sale may clothe their agreement is not of controlling importance in determining the rights of creditors under our statutes, the insertion in a contract of bailment or lease of a provision giving an option of purchase at a fixed price, and making, in case of its exercise, payments previously made in the form of rent applicable to the purchase price, does not, as matter of law, turn the bailee or lessee into a conditional vendee. His character and position depend on the real intent and purpose of the contract.
The negotiations leading up to the contracts out of which this litigation has arisen may properly be considered in determining their intent and purpose, as between the parties to these actions. Bartholomew v. Muzzy, 61 Conn. 387, 392, 23 A. 604. The preliminary negotiations between the Lambert Company and the McGovern Company, in respect to each of the cableways, began with a request for a lease, and the naming by the former of a rent considerably higher than that finally inserted in the proposal. The indefiniteness of the term for which the cableways were turned over to the Lambert Company; the fact that no rent was ever paid; and all the other circumstances of each case, were to be and were considered by the trial judge in determining whether the original requests were mere pretences, to give a false look to the arrangement to be made. What it really was remained a question of fact, and is conclusively settled as such by the finding of the Superior Court. Harris v. Coe, 71 Conn. 157, 162, 41 A. 552; Romeo v. Martucci, 72 Conn. 504, 509, 77 Amer. St. Rep. 327, 45 A. 1, 99. The defendants are right in their contention that the contract imposed on the Lambert Company a duty to sell at the price named, should the McGovern Company conclude, within the specified period of four months, to purchase. But the option to buy, thus created, might well be a mere incident of a bailment for hire. The only duty which the McGovern Company assumed, aside from the proper care of the cableway, was to pay a monthly rent in advance for not less than four months, and eventually to return it to New Jersey, if it should not be purchased.
These considerations dispose of all the reasons of appeal which merit discussion, and make it unnecessary to inquire whether, if there had been conditional sales of the cableways, our statute would have called for the record of the papers either in New Jersey, where the McGovern Company had its corporate seat, or in Waterbury, where it was working under its contract.