Sale, Conditional. Contract, Performance and breach, Validity. The owner of certain chattels made with one desiring to purchase them an agreement in writing whereby the chattels were to be delivered to the prospective purchaser, the title remaining in the vendor "until the same shall have been fully paid for," the vendee to have the use of them meanwhile and to care for them and keep them in repair, to give to the vendor access to them at any time for purposes of inspection and repair but not to permit any one else to use them, to keep them insured for the vendor's benefit, and to pay a certain sum down and certain other sums making up the balance of the purchase price with interest in quarterly instalments. It also was provided that the vendee should give certain notes corresponding in amount and times of payment and rate of interest to the quarterly payments to be made by him, "as collateral to the payment for said chattels," and that "on the payment of any one of the said notes the instalment corresponding thereto shall be deemed paid, and the said" vendor is "at liberty to dispose of any or all of said notes before or after maturity." On full performance of the agreement, the title to the chattels was to vest in the vendee, but "on failure" by the vendee "to keep the terms" of the agreement, the vendee was to give the vendor access to the chattels and to make no opposition to a removal of them. After having failed to pay several of the instalments, the vendee assigned his rights under the agreement to one who knew of its terms and to whom, through a third person, he also conveyed and gave possession of the premises where the chattels were. The vendor, while still retaining possession of the vendee's notes, replevied the chattels, and the vendee's assignee brought an action of tort or contract against the vendor, contending that the taking was wrongful. Held, that the agreement could not be said to be in violation of morality or against public policy, that, the notes being given "as collateral," the vendor did not have to deliver them up or rescind the contract before taking possession of the chattels, and that the taking, having been made after the vendee had broken the terms of the contract, was lawful.
BRALEY, J.
In these cases, the rights of the parties depend on the written agreement under which the chattels described in the writ of replevin were sold and delivered to the defendant corporation. It is evident upon perusal of the contract, that the negotiable promissory notes were not given or accepted in payment of the purchase price, but only taken as collateral security. Until the consideration had been fully paid in money, it is also expressly provided, that the title was not to pass, but remained vested in the vendor, while any sums paid and received in part performance "shall be deemed to be done on account of the use of, or right to use, the said chattels." If upon default the chattels had been taken without suit, no action to recover back the payments could have been maintained. Lorain Steel Co. v. Norfolk Bristol Street Railway, 187 Mass. 500, 506. Upon failure of performance, the vendor therefore rightfully could appropriate the partial payments in satisfaction of the rental value of the property during the time it was held and used by the vendee, and retake the property, even if the notes, not having been negotiated although negotiation was permitted, were not tendered to the maker either before suit or at the trial. Nor were they bound, as the defendants contend, to show rescission. The contract being conditional with the conditions unperformed, and there having been no election to treat the sale as absolute, the plaintiffs' title to the property never had been devested. Marston v. Baldwin, 17 Mass. 606. They also could resell, either before or after taking possession. Hubbard v. Bliss, 12 Allen, 590. However improvident from the vendee's present point of view some of its provisions may have been, it cannot be said that the contract was violative of morality or against public policy, and no reason appears why it should not be enforced. Benner v. Puffer, 114 Mass. 376. New York Bank Note Co. v. Kidder Press Manuf. Co. 192 Mass. 391. The vendee having defaulted, the plaintiffs could maintain replevin against the defendants, by whom the judge upon the evidence was warranted in finding the property was unlawfully held and detained. Cottrell Sons Co. v. Carter, Rice Co. 173 Mass. 155.
It follows from what has been said, that in the second case the plaintiff, who purchased with knowledge of the agreement, is bound by its terms and acquired no rights which it could assert in bar of the enforcement of the defendants' title. Lorain Steel Co. v. Norfolk Bristol Street Railway, 187 Mass. 500.
The various rulings requested at the trial, to the refusal of which the defendants in the first case and the plaintiff in the second case excepted, were properly denied, and the exceptions must be overruled.
So ordered.