Overholt v. Burbridge et al.

ceived the money for another's use can have no right to claim it. If one of the parties to an illegal and unenforceable contract, who has received profits under it, admits that a specified sum is due to the other party, it has been held that the latter may maintain an action upon an account stated between them, or, if he has made a special promise to pay him, the action may be brought on that promise." The following cases uphold and declare this same doctrine: Peters v. Grim (Pa.), 24 Atl. 192, 34 Am. St. Rep. 599; Munns v. Donavan Com. Co. (Iowa), 91 N. W. 789; Farmer v. Russell, 1 B. & P. 296; Petrie v. Hannay, 3 Term, 418, 419; W. U. Telegraph Co. v. U. P. R. Co. (C. C.), 3 Fed. 423; Manchester R. Co. v. R. Co., 66 N. H. 132, 20 Atl. 383, 9 L. R. A. 689, 49 Am. St. Rep. 582; Buchanan v. Bank, 55 Fed. 226, 5 C. C. A. 83; Hatch v. Hanson, 46 Mo. App. 334; DeLeon v. Trevino, 49 Tex. 89, 30 Am. Rep. 101; Pfeuffer v. Maltby, 54 Tex. 454, 38 Am. Rep. 631; Gilliam v. Brown, 43 Miss. 641; Elder v. Talcott, 43 Ill. App. 439; Repplier v. Jacobs, 149 Pa. 167, 24 Atl. 194; Clark v. Brown, 77 Ga. 606, 4 Am. St. Rep. 98; McNaughton v. Haldeman, 160 Pa. 144, 28 Atl. 647.

We are of the opinion that the facts in this case, when applied to the foregoing principles of law, clearly establish plaintiff's right to recover, and that the court erred in finding the issues in favor of defendants and dismissing the action.

The judgment is reversed, with directions to the trial court to proceed in accordance with the views herein expressed. Costs to be taxed against respondents.

BARTCH, C. J., and STRAUP, J., concur.

1 Furniture & Carpet Co. v. Sorensen.

FREED FURNITURE & CARPET COMPANY, a Corporation, Respondent, v. P. A. SORENSEN, Appellant.

No. 1589. (79 Pac. 564.)

Note.

1. Conditional Sale: Construction of Contract: A contract note for a specified amount, providing for its payment in certain weekly installments, was given for the price of personal property described therein, reserved the title to the property in the seller until fully paid for, authorized the seller in case of default to take possession of the 'property and indorse the value thereof on the note, or resell the same, and indorse the proceeds on the note, and in either case to charge the balance due thereon to the maker. Held to constitute a conditional sale, which is valid not only between the parties thereto but, in the absence of fraud, as to third parties, and, though not recorded, to give the seller a right to the possession of the property on default of payment superior to a lien of a mortgage made by the purchaser.1

2. Same: Renewal Note: Effect.

The fact that the parties to a conditional sale note determined and adjusted their accounts a new note being given for the balance due, but containing the same reservation of title and provisions for enforcement, does not render the transaction an absolute sale with security for the debt.

3. Same: Costs: Apportionment: Discretion. Revised Statutes 1898, section 3339, authorizes costs to the prevailing party in an action, among others, for the recovery of personal property Section 3341 gives the court discretion to apportion costs in all actions other than those mentioned in section 3339. Held, in an action for personal property, that, though plaintiff recovered a portion only of the

1 Russell v. Harkness, 4 Utah 197, 7 Pac. 865, affirmed 118 U. S. 663, 7 Sup. Ct. 51, 30 L. Ed. 285; Sho-honetz v. Campbell, 7 Utah 46, 24 Pac. 672; Hirsch & Co. v. Steele, 10 Utah 18, 36 Pac. 49; Machine Works v. Parsons, 10 Utah 105, 57 Pac. 244; Lippencott v. Rich, 19 Utah 140, 56 Pac. 806; Id., 22 Utah 196, 61 Pac. 526; Detroit Heating Co. v. Stevens, 16 Utah 177, 52 Pac. 379; Laundry v. Dole, 22 Utah 311, 61 Pac. 1103.

Furniture & Carpet Co. v. Sorensen.

property sued for, the court is not authorized to apportion the costs, but should allow costs as matter of course to the prevailing party.

4. Same: Harmless Error.

Though plaintiff recovered only a portion of the personal property sued for, it is not reversible error to direct each party to pay his own costs, where it appears that defendant was not prejudiced by such direction.

(Decided February 6, 1905.)

Appeal from the Third District Court, Salt Lake County.-Hon. T. D. Lewis, Judge.

Action to recover the possession of certain chattels or their value. From a judgment in favor of the plaintiff, the defendant appealed.

AFFIRMED.

S. P. Armstrong, Esq., for appellant.

All of said contracts contain provisions authorizing plaintiff, under certain conditions, to declare the note due and payable at once, and to take possession of, and sell the property, "and from the proceeds of such sale pay the balance then due on said note, together with all costs for the taking and selling of said property, holding the residue, if any there shall be, subject to the disposal of the maker hereof."

This provision, which requires the vendor on retaking to sell the property, and to account for any surplus to the vendee which may be left after satisfying the note, renders the transaction a sale with mortgage back as security for the purchase price. In short, it is a controlling feature in determining the contract to be a purchase-money mortgage, and not a conditional sale. Shaub v. Screven, 19 S. Car. 446-7; Palmer v. Howard,

2 Miller v. Zeigler, 3 Utah 17, 5 Pac. 518; Dudley v. Facer, 8 Utah 403, 32 Pac. 668.

Furniture & Carpet Co. v. Sorensen.

72 Cal. 296, 1 Am. St. 60; Herryford v. Davis, 102 U. S. 235, 246; Russell v. Harkness, 4 Utah 202.

If plaintiff retakes the property it must sell it; it could not simply take it and hold it as owner. If plaintiff were the actual owner, why not? This provision is inconsistent with the theory that plaintiff is the owner. As the court says in Palmer v. Howard, 72 Cal. 296: "Moreover, Palmer and Rey were bound to resell the property if they repossessed themselves of it. They could not have kept it as an owner; and not only so, but they were bound to resell for the benefit of the St. Clairs. This provision is, that if they retake they shall sell 'to the best advantage, rendering to said borrower all surplus, if any, after paying the price agreed upon and the expenses of removal and sale.' This is not a feature of an executory contract of sale. It is the chief characteristic of a mortgage, and is the very sum and substance of proceedings for foreclosure.'

Another controlling feature which determines the contract to be a mortgage, is the fact that the vendee is bound to pay the full purchase price, without any option of turning the property back and thus being relieved from further payment. Andrews v. Bank, 20 Colo. 313; Herryford v. Davis, 102 U. S. 235, 246; Hart v. Barney, 7 Fed. 552-3; Palmer v. Howard, 72 Cal. 296; Aultman v. Silha, 85 Wis. 359,

The language of the instrument; "this day sold," is significant. These words show a contract of sale, not to sell. It is not that the vendor will sell, but has sold. "Its meaning is, therefore, that of a sale with retention of the legal title as security for the purchase money." Beardsley v. Beardsley, 138 U. S. 265-7.

The renewal contract which superseded the original contracts was a mortgage, not a conditional sale. If there could be any room for doubt about the nature of this transaction, it should be resolved in favor of the theory of a mortgage. Turner v. Kerr, 44 Mo. 431-2; Aultman v. Silha, 85 Wis. 359.

The rule permitting these secret liens "is at best

Furniture & Carpet Co. v. Sorensen.

a harsh one, and should not be enforced except in cases where the agreement to so hold the title is positive and unambiguous." Edwards v. Simonds, 65 Mich. 355; Palmer v. Howard, 72 Cal. 295; Knittel v. Cushing (Tex.), 44 Am. R. 600; Greer v. Church (Ky.), 13 Bush 434-5.

However disguised, a transaction which is in substance a mortgage will be treated as a mortgage and within the chattel mortgage Act, as to parties dealing with the debtor. Damm v. Mason, 98 Mich. 244; Barney v. Hart (Ky.), 1 S. W. 416; Perkins v. Bank, 43 S. Car. 44; Note, 1 Am. St. 63.

"Conditional sales are not favored in law, and where it is doubtful from the face of the instrument whether the contract is a conditional sale or a mortgage, the courts generally treat it as a mortgage, for the reason that such construction will be most apt to attain the ends of justice, and prevent fraud and oppression." Singer v. Smith, 40 S. Car. 531.

Each party is entitled to tax costs.

Where part of the property, in replevin, is given to plaintiff and a part to defendant, each party is entitled to his costs; not as the judgment was given in this case, that each party pay his own costs. Deshler v. Gwillim, 23 Kan. 313-6; Powell v. Hinsdale, 5 Mass. 343; Seymore v. Billings, 12 Wend. 289; McLaren v. Thompson, 40 Me. 287; Brown v. Smith, 1 N. H. 38-9; Lanyon v. Woodard, 65 Wis. 549; Clark v. Keith, 9 Ohio 74; Knowles v. Pierce, 5 Houst. 184; Wright v. Mathews (Ind.), 2 Blackf. 189; Poor v. Woodburn, 25 Vt. 239.

Messrs. Booth, Lee & Ritchie for respondents.

The contracts are conditional sale notes and not mortgages. The appellant cites and relies upon the case of Palmer v. Howard, 72 Cal. 293-6, for a reversal of the decision of the trial court. The above case was a very poorly considered case, and the Supreme Court of California has overruled it. Rodgers v. Bachman,