U.S. Hoffman MacHinery Corp. v. Harris , 167 S.C. 443 ( 1932 )

This appeal is from an order of Hon. T.S. Sease, Circuit Judge presiding in the Court of Common Pleas for Spartanburg County, which directed a verdict in favor of the defendant, who is the respondent here. The following narrative gives the pertinent history of the occurrences out of which the litigation arose:

January 6, 1928, D.W. Lawton, of Spartanburg, S.C. addressed to United States Hoffman Machinery Corporation, 105 Fourth Avenue, New York City, a communication which was dated at 139 1/2 Morgan Square, Spartanburg, S.C. and which directed the company to ship to him two Hoffman Pressing Machines (describing them). After fixing the price and terms and times of payment, the writing contained this provision: "The title and ownership of said machine is to remain in United States Hoffman Machinery Corporation, its successors and assignees, until the full purchase price is paid in cash, and if default shall be made in the payment of any note or installment of the purchase price, the said Corporation, its successors or assignees, may at their option declare the entire amount unpaid and all unpaid notes immediately due and payable. * * *"

The writing further contained the following stipulation: "This agreement constitutes the whole contract between the parties hereto * * * This order shall not be binding on your Company until accepted by it at its office in the City of New York."

It was signed "D.W. Lawton, purchaser's signature," in the presence of two witnesses. At the same time D.W. Lawton made and delivered the notes called for by the contract. These were dated at 139 1/2 Morgan Square, Spartanburg, S.C. January 6, 1928.

The contract bears upon its face this indorsement: "Accepted at the City of New York this, March the 8th, 1928, and filled with machines Nos. 17619 20."

Prior to February 1, 1928, D.W. Lawton, for the Hub City Cleaning Pressing Company, a partnership composed of D.W. Lawton and A.M. Faucett, entered into an oral contract with J.T. Harris, the respondent, for the rent of a storeroom on Church Street in the City of Spartanburg. Here the presses were erected and the pressing club opened for business therein the 9th of February, 1928.

The title retaining instrument was lodged for record in the office of the Registrar of Spartanburg County March 13, 1928, and by error, was recorded under the name of D. W. Lawter; this was changed to D.W. Lawton "10-13-28, which it is evident was intended for October 13, 1928.

The Hub City Cleaning Pressing Company vacated the rented premises the 9th of August, 1928, being in arrears for rent for three months in the sum of $225.00. They left the pressing machines in the leased building. D.W. Lawton was in default on his notes for the purchase price of the pressing machines. September 26, 1928, the plaintiff — appellant here — made demand upon the respondent for the possession of the machines, giving him notice of its title retaining contract; the demand was refused. Thereafter, January 12, 1929, action in claim and delivery was begun by appellant, who gave the necessary bonds and took the machines in his possession. Respondent did not replevy them.

At the trial both parties made motion for directed verdicts. After argument his Honor directed a verdict for the defendant in these words: "We find for the defendant the property in dispute, or Six Hundred and Twenty-five Dollars, the value thereof."

After hearing argument on motion for new trial, his Honor passed an order fixing the amount due the defendant for rent at $225.00 with interest from August 1, 1928, and directed that, upon payment of that amount to defendant, and the costs of the action, "the property in dispute be thereupon released from the rent lien and all interests of defendant therein be satisfied." He refused the motion for new trial.

Appellant relies upon four exceptions to sustain this appeal.

The first exception charges error to the presiding Judge for that he overruled appellant's motion for directed verdict which was predicated upon this: "The uncontradicted proof was to the effect that the chattels in dispute were sold by appellant to D.W. Lawton under a title retaining contract signed by D.W. Lawton, upon which there was past due and unpaid $590, etc."

We think the proof is conclusive that the property in dispute was the property of D.W. Lawton. The written contract of purchase shows that he bought it; he alone signed the contract, and he alone signed the notes. It is true that he took A.M. Faucett into a partnership with him, but the terms of the partnership are nowhere stated. They may have included only the operation of the plant. Certainly there is not a word of proof that Lawton ever conveyed to Faucett an interest in the two pressing machines sold to him by plaintiff. It is true that in his answer to the complaint the defendant, Harris, does say that he rented the premises to the Hub City Cleaning Pressing Company, a partnership composed of D.W. Lawton and A.M. Faucett, but his testimony shows that his negotiations were wholly with Lawton; he knew nothing of Faucett as a partner in the business till afterward. Moreover, the presiding Judge permitted an amendment to the answer to conform it to the testimony. There can be no reasonable doubt that the pressing machines were the property of D.W. Lawton. But this was not in itself sufficient ground for the direction of a verdict in favor of defendant. There were other issues beside the question of ownership of these chattels which could determine the rights of the litigants.

Exceptions 2 and 3 are disposed of by what we have said in reference to Exception 1 and what we shall say of Exception 4, which is in effect, that it was error not to hold "that title retaining contract was actually accepted by appellant on the date of the shipment of the machines in January, 1928, and that the subsequent entry of acceptance on March 8 was only a clerical act not in any way affecting the legal rights of the parties thereto, established by the shipment under the order, the error being that the lien of the said title retaining contract attached to the said chattels immediately upon their shipping by appellant, and the said chattels were therefore subject to the said lien when they were placed upon the rented premises, upon their arrival at Spartanburg, S.C. and that the said lien was therefore superior to any lien which the landlord of said rented premises may have acquired for rent."

This exception presents the crux of the whole case. When did the title retaining contract become effective?

Respondent vigorously contends that the contract did not become of force until it was accepted by the machinery company, and that the entry on the contract shows that it was not so accepted till March 8, 1928. With equal vigor appellant argues that the machinery company accepted the contract when it shipped the pressing machines in January. It was already of force so far as Lawton was concerned; there was nothing remaining for him to do to make it binding on him. It only remained for appellant to accept it for it to become binding on it. Lawton said in the contract, already signed by him, "this shall not be binding on your Company until accepted by it at its office in the City of New York."

This provision does not prescribe that the acceptance shall be in writing. Can acceptance be made in any other way?

"Anything that amounts to a manifestation of a formed determination to accept, communicated, or put in the proper way to be communicated to the party making the offer would doubtless complete the contract." 6 R.C.L., 606, citing cases.

How better could acceptance be manifested in the present case than by the act of shipping the pressing machines to Lawton?

"An assent to an offer which is requisite to the formation of the agreement is an act of the mind; and is either expressed or evidenced by circumstances from which such assent may be inferred." 6 R.C.L., 605, § 28.

"As a general rule if a particular mode of acceptance is prescribed by the offer the condition must be complied with, unless it is waived. But while a party making an offer may specify how it shall be accepted in order to complete the contract, yet, if he does not so specify, anything which in law would be an acceptance is sufficient. And where the acceptance actually reaches the person who has made the offer it is immaterial by what mode it is sent. So an offer in writingmay be accepted orally, nor need assent be manifested bysigning the offer. But an offer may prescribe for its acceptance in writing, in which case a verbal acceptance will be insufficient unless it is assented to by the offerer. The right to receive written notice of acceptance may be waived by parol. An oral acceptance may be good, notwithstanding there has been a previous ineffectual attempt to accept in writing." (Italics added.) 13 C.J., 280, 281, § 85.

"Appellant contends that the judgment of the civil Court should have been reversed because there never was a valid contract for the manufacture and sale of the truck, for the reason that the written order therefor was never countersigned by an officer of the company, as required by its express terms. It is quite fundamental that parties may become bound by the terms of a contract, even though they do not sign it, where their intention to do so is otherwise indicated. Manifestly the provision requiring the order in question to be countersigned by an officer of the company was inserted for the benefit of the company, and to prevent its liability thereon until ratified by some one occupying a position of responsibility with the company. * * *

"Conceding that the order was never countersigned by an officer of the company, as required by its terms, the inquiry is whether the company otherwise became bound thereon. It is undisputed that shortly after the date of the order the company started work on the truck to be delivered in fulfillment thereof, that appellant was cognizant of the fact, that he secured work in the factory in order that he might work on `his' truck and become familiar with its construction, that delay in its completion was the subject of frequent complaint and discussion, and that he even had the truck out on trial trips. If this is not sufficient to indicate an acceptance of the order by the company the receipt and retention by it of $450.00 down payment is certainly sufficient to estop it from denying its acceptance of the order."Albright v. Stegeman Motor Car Company, reported in168 Wis. 557, 170 N.W., 951, 952, 19 A.L.R., 463, sustained by the citations from a number of jurisdictions.

"But ordinarily written acceptance is not essential, although the offer or order provides that acceptance shall be made in that manner. At least it has been held that the shipping of goods ordered on a written form constitutes an acceptance of the contract, although the order expressly provided that it would become a contract `upon the acceptance by the dealer in the space below,' and the seller never wrote in an acceptance. Hercules Mfg. Co. v. Wallace (1921),124 Miss., 27, 86 So., 706. In such a case the provision requiring written acceptance is for the benefit of the offeree and may be waived by him."

From annotation in the case of Wood B. Co. v. D.E.Hewit Lumber Co. (89 W. Va., 254, 109 S.E., 242), reported in 19 A.L.R., 467.

It is manifest that plaintiff's title retaining provision attached to the goods, the pressing machines, before the contract of rent was made and before they went into the rented building.

In our present case D.W. Lawton, who ordered the pressing machines, did not stipulate that acceptance be in writing, but if it had been so required, he waived its nonperformance by accepting the chattels which were shipped to him F.O. B., immediately on the receipt of the order. It may be said further that Lawton is making no point that the contract was not accepted till March 8, 1928, that objection is made by his landlord. Conceding the right of the landlord, the defendant here, to make it, it is not tenable; the proof is conclusive that the offer was accepted and the goods shipped in January, and the contract of rent was not made till February and the tenancy did not begin till February 9th.

The point is made that the title retaining contract was not recorded till March 13, 1928, and was then incorrectly recorded and indexed as for "D.W. Lawter," instead of "D.W. Lawton."

It does not appear that the defendant suffered by this. He testified that he never examined the books to see if there were any incumbrances on the chattels in his building rented by Lawton, until the tenants were behind with their rent. He seems to have rested upon the assumption that he, as landlord, had a lien on the tenant's goods superior to all other liens and claims of priority, in which assumption he was in error. In the well considered case of Fidelity Trust Mtg. Co. v. Davis et al., 158 S.C. 400, 155 S.E., 622,625, Mr. Associate Justice Blease, now Chief Justice, made an elaborate, thorough study and statement of the laws affecting the relations of landlords and tenants and the rights of others as related to them. He announces these conclusion,inter alia:

"It is thus seen that these statutes give a landlord no lien on the personal property of his tenant, other than on the crops raised on the demised premises for rent due by his tenant. While the landlord has no lien on such personal property, yet the statutes have preserved to him, in a modified form, his common-law right to distrain on such property. * * *

"An analysis of the authorities will admit of the following propositions:

"(1) The landlord is entitled to as much as one year's rent in arrears to be paid by the execution, or other creditor, before the goods of his tenant can be seized under execution or other pretense. Section 5283, Civ. Code 1922. But this provision is subject to the amendment of 1878, limiting the distress to the property of the tenant owned in his own right. Dial Warehouse Co. v. Levy, 39 S.C. 265,17 S.E., 776.

"(2) The landlord is precluded from distraining upon his tenant's property over which the tenant gave a mortgage (a) before the rent contract was entered upon, or (b) before such property was brought upon the demised premises, unless the landlord first pay the mortgage debt. Section 5286, Civ. Code 1922; Morgan Silver Plate Co. v. Bobo UndertakingCo., 107 S.C. 280, 92 S.E., 720.

"(3) The landlord may distrain upon the personal property of his tenant, even though the tenant has made an assignment for the benefit of his creditors or put a mortgage thereon, provided such assignment or mortgage be executed after the contract of tenancy has been entered upon. Section 5285, Civ. Code 1922."

This opinion was concurred in by all the members of the Court. It was affirmed by the case of Ex parte Stackley andT.S. Burch (Lucas Brunson v. Gotham Braid Works,Inc.), reported in 161 S.C. 278, 159 S.E., 622. It is true that in the case last mentioned the landlords were allowed their claim of preference, although they had not distrained for their rent, but this was allowed because the property had gone into the hands of a receiver before they could levy their distress for rent. In other words they were not guilty of laches in the matter. The property was in the hands of a receiver appointed by the Court. It was in custodia legis. If the landlords had attempted to levy a distress warrant, they would have been in contempt of Court. In re. Bishop (D. C.), 153 F., 304, 305.

In the present case no levy was made, nor attempted to be made although the defendant, respondent, knew of the title retaining contract from September 26, 1928, when plaintiff's attorneys notified him of it and demanded possession of the pressing machines. The proceedings in claim and delivery were not begun until January 12, 1929, yet respondent made no effort to levy upon the property. Evidently he relied upon his supposed prior lien for rent.

But this question has little force now; the matter is settled by the conclusion of this Court that the title retaining contract, which is in effect a chattel mortgage, had been placed upon the property before the rent contract had been entered upon, and before the property was placed upon the rented premises.

In the case of Morgan Silver Plate Co. v. Bobo UndertakingCo. et al., 107 S.C. 280, 92 S.E., 720, 721, Mr. Associate Justice Gage, considering this very question and delivering the opinion of this Court, said:

"(1) `In * * * cases where property distrained for arrears of rent is subject to the lien of a mortgage placed upon said property before the rent contract was entered upon,' the mortgage debt shall have precedence of payment.

"(2) `In * * * cases where property, distrained for arrears of rent, is subject to the lien of a mortgage placed upon said property before the * * * said property was brought upon the rented premises,' the mortgage debt shall have precedence of payment."

It is apparent that it was error to refuse to direct a verdict for plaintiff. The judgment of the Court below should be reversed, and the case remanded with instructions to order a verdict for plaintiff under Rule 27.

This opinion was written as the leading opinion of the case, but since a majority of the Court do not agree in it, it becomes the dissenting opinion.