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(132 Wash. 667, 233 Pac. 35.)
stroyed, there is, in our opinion, an entire failure of consideration."
Professor Elliott, in the section cited from his work, supra, reasons as follows: "Where there is a sale of specific goods the parties must have contemplated that there was something in existence to be sold, and if goods agreed to be sold perish or are destroyed without fault of the buyer or seller, before the risk passes to the buyer, the agreement is thereby avoided.
There being no subject-matter, an essential element of a valid sale is lacking."
So Mechem, Sales, ubi supra: "The question of the effect of the accidental destruction of the property before it was fully paid for has also given rise to decisions apparently in conflict. The true view would seem to be that the loss follows the title. Hence in the case of a conditional contract to sell where no title passes until payment in full, the loss, unless otherwise provided by the contract, would fall upon the party agreeing to sell; while in the case of a sale upon condition subsequent, the loss would fall upon the purchaser, and so the decisions are when not complicated by other facts."
In the greater number of the cases supporting the majority rule it is said that the purchaser has a qualified title to the property, and the seller holds the title merely as security for the purchase price, some courts stating that the contract is equivalent to a chattel mortgage. But a different rule has been established in this state regarding the character and effect of contracts of conditional sale of chattels. We have consistently held that under the statutes of this state no title whatever passes under a conditional sales contract of personal property,
no title passes. and that the rela
tion of debtor and creditor is not created. In Winton Motor Carriage Co. v. Broadway Auto. Co. 65 Wash. 650, 37 L.R.A. (N.S.) 71, 118 Pac.
817, it was said that "it seems inconceivable that the absolute title remain in the seller, and at the same time the purchase price be an enforceable debt obligation against the purchaser."
And in the following cases we have stated and reiterated that one who takes property under a conditional bill of sale is not the owner, and has no element of title: Stewart & H. Drug Co. v. Reed, 74 Wash. 401, 133 Pac. 577; Norman v. Meeker, 91 Wash. 534, 158 Pac. 78, Ann. Cas. 1917D, 462; Peterson v. Chess, 92 Wash. 682, 159 Pac. 894; Barbour v. Hodge, 99 Wash. 578, 170 Pac. 115. We have, therefore, aligned ourselves against the decisions of those jurisdictions holding that the title is merely reserved as security, or that the vendee has a qualified property in the title.
Nor can we agree with the reasoning of those courts that have placed their conclusions on the ground that the purchaser has absolutely bound himself to buy and pay for the article, and that, if it is destroyed while in his possession, that is no reason why he should be relieved. On the contrary, the promise to buy and pay for the article is mutual and interdependent with the promise of the vendor to sell and deliver the article. The promises being mutual and interde- effect of inabilipendent, when the ty of one party one cannot comply the other is under no obligation to comply. See Hawley v. Kenoyer, 1 Wash. Terr. 609, and Hogan v. Kyle, 7 Wash. 595, 38 Am. St. Rep. 910, 35 Pac. 399.
Bridges, J., dissenting:
Most of the members of the court are of the opinion that under a conditional sales contract the loss must follow the title, and that, since we have held that under a conditional sales contract the purchaser obtains no title or interest in the thing purchased, the loss must fall upon the vendor because he has both the legal and equitable title. This view has caused us to review our cases holding that the purchaser, before completion of the contract, does not obtain any interest in the property purchased. I have long been of the opinion that these cases are unsound and against the best interests of the people of this state. However, if I could be convinced that to overturn them would be greatly detrimental, I would be in favor of adhering to them. But I am unable to see that any considerable harm can follow the overruling of those cases; on the contrary, I can see great benefit in so doing, and in laying down a rule which is supported by almost all of the decisions, which is that the purchaser under such a contract obtains an interest in the property purchased, at least to the extent of the payments made on the purchase price.
Since it has become necessary to determine whether we will adhere to our previous decisions or overrule them, I am in favor of the latter, for the reasons given by Judge Tolman in his dissenting opinion in the case of Ashford v. Reese, Wash., 233 Pac. 29.
I am, however, of the opinion that there is no reason back of the rule which requires the loss to follow the title. My investigation of this question (which includes the reading of nearly all the cases) convinces me that the loss should be on the purchaser, not because he has or has not any interest in the property purchased, but because he has agreed to purchase and has agreed to un
conditionally pay the purchase price. I cannot see any reason why one who has agreed to pay the purchase price, and who has received possession of the thing purchased, should be able to deny his agreement simply because the property has been destroyed, lost, or damaged while in his possession. Suppose the property involved in this case had not been completely destroyed, but had been damaged 5, 10, or 20 per cent of its value, would the majority still hold that the vendor must stand the loss, and that the purchaser may repudiate his agreement, refuse to carry out his contract, and recover what has already been paid by him? If, during the life of the contract, the property increases in value, the purchaser gets the benefit thereof, and if it decreases in value, or is by the elements damaged, he ought to bear the loss. If the property be real estate and be affected by a stream of water, and, during the life of the contract, accretion adds to the property he thereby benefits, why should he not stand the loss if the same stream should cut off or destroy a part of the land which he has agreed The rule contended to purchase?
for by me is stated in 24 R. C. L. 494, as follows: "The authorities are not in accord as to the liability of the buyer for the unpaid part of the agreed price where the property is accidentally destroyed while in his possession and without his fault. According to the better view, if the buyer has entered into an unconditional promise to pay the price the fact that the property is accidentally destroyed while in his possession does not relieve him from liability for the unpaid and subsequently accruing instalments of the price."
The case of Burnley v. Tufts, 66 Miss. 48, 14 Am. St. Rep. 540, 5 So. 627, is probably the leading case on this subject, and is referred to by nearly all of the other cases. There the court said: "Burnley unconditionally and absolutely promised to pay a certain sum for the property the possession of which he received from Tufts. The fact that the prop
(132 Wash. 667, 233 Pac. 35.)
erty has been destroyed while in his Ark. 403, 140 S. W. 582, 36 L.R.A.
custody and before the time for the payment of the note last due, on payment of which only his right to the legal title of the property would have accrued, does not relieve him of payment of the price agreed on. He got exactly what he contracted for, viz., the possession of the property and the right to acquire an absolute title by payment of the agreed price. The seller had done all that he was to do except to receive the purchase price; the purchaser had received all that he was to receive as the consideration of his promises to pay, to relieve him from this obligation the court must make a new agreement for the parties, instead of enforcing the one made, which it cannot do."
The following additional cases support the view I have tried to express: Marion Mfg. Co. v. Buchanan, 118 Tenn. 238, 8 L.R.A. (N.S.) 590, 99 S. W. 984, 12 Ann. Cas. 707; Hollenberg Music Co. v. Barron, 100
(N.S.) 594, Ann. Cas. 1913C, 659; Whitlock v. Auburn Lumber Co. 145 N. C. 120, 12 L.R.A. (N.S.) 1214, 58 S. E. 909; Exposition Arcade Corp. v. Lit Bros. 113 Va. 574, 75 S. E. 117, Ann. Cas. 1913D, 335; Tufts v. Wynne, 45 Mo. App. 42; Lavalley v. Ravenna, 78 Vt. 152, 2 L.R.A. (N.S.) 97, 112 Am. St. Rep. 898, 62 Atl. 47, 6 Ann. Cas. 684.
I am therefore of the belief that this case ought to be decided without reference to our former decisions concerning the location of the title to the property sold. I dissent.
Who bears loss incident to destruction of goods sold conditionally.
I. Introductory, 1319.
II. View that purchaser bears loss, 1319. III. View that vendor bears loss, 1327.
As to recovery by conditional vendvendee against third person for damage to or destruction of property, see annotation following Lacey v. Great Northern R. Co. post, 1337.
In discussing the question who bears the loss incident to the destruction of goods sold conditionally, this annotation is confined to cases involving the rights of the vendor and purchaser as between themselves only.
II. View that purchaser bears loss. Rule stated.
The weight of authority supports the rule that, where goods are sold and delivered to the vendee under an agreement that the title is to remain in the vendor until payment, the loss or destruction of the property while
in possession of the vendee before payment, without his fault, does not relieve him from the obligation to pay the price, and therefor he suffers the loss.
United States. Chicago R. Equipment Co. v. Merchants' Nat. Bank (1890) 136 U. S. 268, 34 L. ed. 349, 10 Sup. Ct. Rep. 999. Compare J. M. Arthur & Co. v. Blackman (1894) 63 Fed. 536.
Arkansas. Phillips v. Hollenberg Music Co. (1907) 82 Ark. 9, 99 S. W. 1105; Roach v. Whitfield (1910) 94 Ark. 448, 140 Am. St. Rep. 131, 127 S. W. 722; Hollenberg Music Co. v. Barron (1911) 100 Ark. 403, 36 L.R.A. :(N.S.) 594, 140 S. W. 582, Ann. Cas. 1913C, 659.
Illinois. See Cooper v. Chicago Cottage Organ Co. (1895) 58 Ill. App. 248.
Indiana. Jessup v. Fairbanks, M. & Co. (1906) 38 Ind. App. 673, 78 N. E. 1050.
Neally v. Wilhelm (1854)
4 G. Greene, 240, 61 Am. Dec. 118. Compare Swaney v. Alstott (1907) 134 Iowa, 63, 8 L.R.A. (N.S.) 1032, 111 N. W. 406. Kentucky.
Prather v. Norflet (1818) 1 A. K. Marsh. 178. Mississippi. - Burnley V. Tufts (1888) 66 Miss. 48, 14 Am. St. Rep. 540, 5 So. 627. See also McPherson v. Acme Lumber Co. (1893) 70 Miss. 649, 12 So. 857.
New York. Ballard v. Burgett (1869) 40 N. Y. 314; Humeston v. Cherry (1880) 23 Hun, 141; National Cash Register Co. v. South Bay Club House Asso. (1909) 64 Misc. 125, 118 N. Y. Supp. 1044. See also Hintermister v. Lane (1882) 27 Hun, 497. Compare Edward Thompson Co. v. Vacheron (1910) 69 Misc. 83, 125 N. Y. Supp. 939.
North Carolina.-Tufts (1890) 107 N. C. 47, 10 L.R.A. 526, 22 Am. St. Rep. 863, 12 S. E. 68; Whitlock v. Auburn Lumber Co. (1907) 145 N. C. 120, 12 L.R.A. (N.S.) 1214, 58 S. E. 909. See also Lancaster v. Southern Ins. Co. (1910) 153 N. C. 285, 138 Am. St. Rep. 665, 69 S. E. 214.
Oklahoma. Harley & Willis v. Stanley (1909) 25 Okla. 89, 138 Am St. Rep. 900, 105 Pac. 188.
Pennsylvania. Peerless Bread Mach. Co. v. Matthews (1923) 81 Pa. Super. Ct. 329.
Tennessee. Marion Mfg. Co. v. Buchanan (1906) 118 Tenn. 238, 8 L.R.A. (N.S.) 590, 99 S. W. 984, 12 Ann. Cas. 707. See also Planters Bank v. Vandyck (1871) 4 Heisk. 617;
Carolina, C. & O. R. Co. v. Unaka Springs Lumber Co. (1914) 130 Tenn. 354, 170 S. W. 591.
Vermont. Fuller V. Buswell (1861) 34 Vt. 107; LaValley v. Ravenna (1905) 78 Vt. 152, 2 L.R.A. (N.S.) 97, 112 Am. St. Rep. 898, 62 Atl. 47, 6 Ann. Cas. 684. See also French v. Osmer (1895) 67 Vt. 427, 32 Atl. 254.
Virginia-Exposition Arcade Corp. v. Lit Bros. (1912) 113 Va. 574, 75 S. E. 117, Ann. Cas. 1913D, 335.
Wisconsin.-Osborn v. South Shore Lumber Co. (1895) 91 Wis. 526, 65 N. W. 184. England.
Compare Elphick v. Barnes (1880) L. R. 5 C. P. Div. 321.
Canada. Hesselbacher v. Ballantyne (1898) 28 Ont. Rep. 182; Goldie & McC. Co. v. Harper (1900) 31 Ont. Rep. 284; Sawyer & M. Co. v. Robert son (1900) 1 Ont. L. Rep. 297. See also Thibault v. Martel (1910) 11 Quebec Pr. Rep. 224.
Reason and application of rule.
One reason for the foregoing view has been well expressed in American Soda Fountain Co. v. Vaughn (N. J.) supra. That was an action on one of a series of notes given for the purchase money of a soda-water apparatus, to which the vendor reserved the title, and which had been destroyed by fire before the note sued on had become due. The defense interposed was a total failure of consideration for the note. Swayze, J., speaking for the court, said: "The question to be determined is, What was the consideration of the note? If the passing of the title to the apparatus was the consideration, the defense must prevail. If the delivery of the apparatus, with the right to acquire title, was the consideration, the plaintiff must prevail. We think the consid eration for the note was the delivery of the apparatus with the right to acquire title. . . . The consideration for these payments, and for the monthly instalments as they fell due. must necessarily be the same as the consideration for the notes not yet matured. It can hardly be contended that the consideration for the payments already made, and for the notes
which matured prior to the fire, and which we may assume were paid, has failed. It must have failed if the consideration was the passing of the title. The language of the note and order also indicates that the obligation of the defendant was absolute immediately upon the delivery of the goods, and was not conditioned in any way upon the passing of the title. The title was retained by the plaintiff merely as security for the unpaid purchase money. Nothing remained to be done by the plaintiff to perfect the title of the defendant; that title would have become perfect immediately upon payment."
The court said in Marion Mfg. Co. v. Buchanan (Tenn.) supra: "We are of opinion the true rule is that the loss must fall on the purchaser: First, because his promise to pay the purchase price of the machinery was unconditional. The machinery had been actually delivered, and was being used by the defendant. There was no provision in the contract that the purchaser was to be released from the payment of the price in the event the machinery was destroyed by fire before payment of the purchase money notes. The retention of title in the vendor was a mere security for the payment of the price. Second, the purchaser should sustain the loss, because the machinery passed under his dominion and control, and, if the rule were otherwise, the purchaser would have no incentive to take care of the property. This rule, moreover, is in accord with the policy of this state in dealing with conditional sales."
In Harley v. Stanley (Okla.) supra, the court said: "There is some conflict of authority on the question presented, but to our minds the great weight of authority supports the general rule laid down in 6 Am. & Eng. Enc. Law, 2d ed. 455, which is stated as follows: 'Where personal property is sold and delivered to the vendee under an agreement that title is to remain in the vendor until payment, the loss or destruction of the property while in the possession of the vendee before payment, without fault, does
not relieve him from the obligation to pay the price.'"
"A conditional sale of personal property by which the vendee takes possession of the property with an unconditional promise to pay for it, but the vendor retains the title till payment in full of the purchase price is made, confers upon the vendor the absolute right of the purchase price, and imposes upon the vendee the unconditional obligation to pay the purchase price, and also casts upon the vendee all the risks of loss incident to the full and complete ownership of the property, unless otherwise specially provided by contract. 6 Am. & Eng. Enc. Law, 2d ed. 455." Phenix Ins. Co. v. Hilliard (1910) 59 Fla. 590, 138 Am. St. Rep. 171, 52 So. 799.
In O'Neill-Adams Co. v. Eklund (1915) 89 Conn. 232, 93 Atl. 524, Ann. Cas. 1918D, 379, the facts and the law were stated by the court as follows: "The question presented by the appeal is this: Can there be a recovery for property sold and delivered on condition that the title shall not pass until full payment has been made therefor, when, without fault of the purchaser, the property is destroyed? There is some conflict of authority on the right of a vendor, who retains title to the property until the payment of the purchase money, to recover the amount unpaid when the property has been destroyed without the fault of the vendee. The Sales Act . provides: 'Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer the goods are at the buyer's risk, whether delivery has been made or not, except that (a) where delivery of the goods has been made to the buyer, or to a bailee for the buyer, in pursuance of the contract, and the property in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery.' Eklund had obtained the possession of the property with the right