In an appeal from the Supreme Court of the Territory of Hawaii,
tried by the court of first instance without a jury, where the
supreme court of the territory reversed the conclusions of law, but
took the finding of fact as true, and those findings are not open
to dispute, but the question for decision is definite and plain,
there is no need to send the case back for a statement of facts by
the Supreme Court of the Territory, although one should have been
made.
Election is simply what its name imports; a choice shown by an
overt act between two inconsistent rights either of which may be
asserted at the will of the chooser alone. Transfer is different
from election, and requires acts of a different import on the part
of the owner and corresponding acts on the part of the
transferee.
The fact that a party, through mistake, attempts to exercise a
right to which he is not entitled does not prevent his afterwards
exercising one which he had and still has unless barred by the
previous attempt.
The absolute liability for the price and putting that liability
in the form of a note are consistent with the retention of title
until the note is paid, and, in the absence of statute, a
stipulation that the sale is conditional and the goods remain the
property of the seller until payment of a note given for the price
is lawful and enforceable in replevin even where, as in this case,
possession was given and additional security of mortgage bonds was
required.
16 Haw. 717 reversed.
The facts are stated in the opinion.
Page 205 U. S. 343
This is an appeal from a decision upon a bill of exceptions
Page 205 U. S. 344
in a case tried by the court of first instance without a jury.
Hecht v. Boughton, 105 U. S. 235. The
facts were found by the trial court and certain conclusions of law
were stated, which the supreme court of the territory held to be
wrong. It sustained the exceptions upon one point which went to the
root of the plaintiff's cause of action, and, upon the plaintiff's
motion coupled with a statement that it would have no further
evidence to present at a second trial, ordered a judgment for the
defendant in order that the case might be brought to this Court.
The findings of fact were taken to be true by the supreme court,
and are not open to dispute except so far as they depend upon
rulings of law, so that the questions for decision here are
definite and plain, and there is no need to send the case back for
a statement of facts by the supreme court, although one should have
been made.
Stringfellow v. Cain, 99 U. S.
610;
Harrison v. Perea, 168 U.
S. 311,
168 U. S.
323.
The suit was replevin for certain rails, cars, engines, and
goods, delivered by the appellant to the Kona Sugar Company,
Limited, and sold by a receiver of that company to the appellee
with full notice of the appellant's claim. Originally there was a
contract for the sale of this property for cash, but the Kona
Company having failed to pay, the appellant offered certain "terms
in settlement of the contract" previously made, as follows:
"We will take in settlement of this contract the sum of $10,000,
U.S. gold coin, and the promissory note of the Kona Sugar Company,
Limited, for the sum of $37,044.53, in favor of William W. Bierce,
Limited, payable six months after date at the Whitney National Bank
in New Orleans bearing interest at the rate of seven and one-half
percent (7 1/2 percent) per annum, and secured by first-mortgage
bonds of the Kona Sugar Company, Limited, of par value equal to the
note, said bonds being portion of a duly authorized issue not
exceeding $200,000. This offer is conditioned upon its acceptance
by you, payment of the money, and the delivery of the note, with
collateral, before 4 P.M. on Thursday, March 14th, A.D. 1901. Upon
such payment being made to us before
Page 205 U. S. 345
the hour named, we will deliver to you the bills of sale
authorizing you to take charge of the rails, locomotives, cars,
scales, and other materials now awaiting delivery, upon the express
condition and understanding that said rails, locomotives, cars,
scales, and other materials are and shall remain the property of
William W. Bierce, Limited, until the full payment of the note
above described, according to its terms."
This offer was accepted, this contract took the place of that
previously made, and the property was delivered.
For purposes of decision, the supreme court assumed that, under
the foregoing instrument, the passing of title was subject to a
condition precedent, but intimated that the majority of the court
thought otherwise, if it had been necessary to decide the point. It
was not necessary because the court was of opinion that, if there
was such a condition, it was lost by what was considered an
election on the plaintiff's part. The court below had found that
there was no election, and therefore the question was and is
whether the acts done by the appellant constituted one as matter of
law. If not, then it must be considered whether the sale was on a
condition precedent, and those are the two questions of law in the
case.
The facts are simple. After the last contract was made, the Kona
Company got into trouble and a receiver was appointed. The
appellant thereupon filed a claim of lien upon the railroad
supposed to belong to the Kona Company, for materials used in the
construction and equipment of the road, the materials referred to
being the property in question. On or about August 1, 1902, it
brought a suit to enforce this lien, and in November of the same
year filed a petition in the Kona Company proceedings, asking that
a decree already made for the sale of all the Kona Company's
property should be modified so as to except all liens from the
operation of the sale. Only a part of the property was used in the
construction of the road, and, under any circumstances, the claim
of a lien would have been bad. The lien suit was dismissed, before
anything had been done in it, in January, 1903. On February 13, the
appellant,
Page 205 U. S. 346
by leave of court, filed a petition in the Kona Company
proceedings for an order that the receiver either should pay the
amount due upon its note or deliver the property, setting up the
contract and alleging that it title to the property still remained.
The abortive lien proceedings constitute the election that is
supposed to have brought the appellant's title to an end. We have
not gone into further particulars because there can be no doubt
that to claim a lien upon anything is inconsistent with asserting a
title to it, and may be assumed to be sufficient to manifest an
election if one is possible. The appellant's allegations in its
first petition could give no additional strength to its choice.
Election is simply what its name imports -- a choice, shown by
an overt act, between two inconsistent rights, either of which may
be asserted at the will of the chooser alone. Thus, "if a man
maketh a lease, rendering a rent or a robe, the lessee shall have
the election." Co.Litt. 145a. So a man may ratify or repudiate an
unauthorized act done in his name.
Metcalf v. Williams,
144 Mass. 452, 454. He may take the goods or the price when he has
been induced by fraud to sell.
Dickson v. Patterson,
160 U. S. 584. He
may keep in force or may avoid a contract after the breach of a
condition in his favor.
Oakes v. Manufacturers' Ins. Co.,
135 Mass. 248, 249. In all such cases, the characteristic fact is
that one party has a choice independent of the assent of anyone
else. But if a man owns property, he has no election to transfer it
to another. He cannot make the transfer unless the other assents.
And equally, if he owns property subject to be divested by the
performance of a condition, he has no election to divest it without
performance. The other party must assent. Transfer is very
different from election, and requires acts of a different import on
the part of the owner, and corresponding acts on the part of the
transferee.
In the case at bar, there is no pretense that the appellant's
conduct purported to convey the property to the Kona Company in
advance of the performance of the stipulated conditions.
Page 205 U. S. 347
The case stands on election alone, and the appellant had no
right to elect in the sense of the argument. It could not
obliterate the condition and leave the contract in force. It may be
that it had an election to avoid the contract altogether, but, if
so, it did not attempt to do it. It insisted on the contract as the
ground of its claim to a lien for the price of the goods. The
election supposed and relied upon is an election to keep the
contract in force, but to leave out the reservation of title. It
must be kept in mind that the effect attributed to the assertion of
the lien is attributed to it as strictly unilateral act, not as an
offer to which an assent might be presumed. As such an act, the
appellant could not give it the supposed effect. It is quite true,
as we have said, that the assertion of a lien is inconsistent with
the assertion of a title,
Van Winkle v. Crowell,
146 U. S. 42, and
therefore if a lien had been established by judgment or decree, the
title would be gone by force of an adjudication inconsistent with
its continuance. But the assertion of a lien by one who has title,
so long as it is only an assertion, and nothing more, is merely a
mistake. It does not purport to be a choice, and it cannot be one,
because the party has no right to choose. The claim in the lien
suit, as was said in a recent case, was not an election, but an
hypothesis.
Northern Assurance Co. v. Grand View Building
Ass'n, 203 U. S. 106,
203 U. S. 108.
The fact that a party, through mistake, attempts to exercise a
right to which he is not entitled does not prevent his afterwards
exercising one which he had and still has unless barred by the
previous attempt.
Snow v. Alley, 156 Mass.193, 195.
There remains the question whether the sale was conditional.
Such sales sometimes are regulated by statute and put more or less
on the footing of mortgages. With the development of its effects,
there has been some reaction against the Benthamite doctrine of
absolute freedom of contract. But courts are not legislatures, and
are not at liberty to invent and apply specific regulations
according to their notions of convenience. In the absence of a
statute, their only duty is to discover the
Page 205 U. S. 348
meaning of the contract and to enforce it, without a leaning in
either direction, when, as in the present case, the parties stood
on an equal footing and were free to do what they chose.
The contract says in terms that it is conditional, and that the
goods are to remain the property of the seller until payment of the
note given for the price. This stipulation is perfectly lawful.
Harkness v. Russell, 118 U. S. 663. So
that the only question is whether any other provision of the
contract is inconsistent with this one, or qualifies and explains
it as intended to do less than it purports to do when taken alone.
Chicago Railway Equipment Co. v. Merchants' National Bank,
136 U. S. 268. The
fact that possession was to be and was delivered, and that it must
have been contemplated that the rails would be put down upon a
roadway no doubt assumed, it seems, wrongly, to belong to the Kona
Company, had no such effect, as between vendor and vendee. Neither
did the requirement of additional security in the form of
first-mortgage bonds of the company. It may have been expected that
the mortgage would embrace a part or the whole of this property,
but there is nothing more common than a provision in a mortgage
that it shall apply to and embrace after-acquired property, with
sufficient description to ascertain the same and bring it within
the mortgage when acquired. And if the mortgage would have been
operative at once by way of estoppel in favor of third persons,
there was the more reason for exacting an interest under it to save
the vendor's rights in that event. Of course, the absolute
liability for the price, and putting that liability in the form of
a note, are consistent with the retention of title until the note
is paid. Parties can agree to pay the value of goods upon what
consideration they please (
White v. Solomon, 164 Mass.
516), and when a purchaser has possession and the right to gain the
title by payment, he cannot complain of a bargain by which he binds
himself to pay and is not to get the title until he does.
It was suggested that the ratification of the contract by the
Kona Company did not mention the condition. But it got
Page 205 U. S. 349
its rights from the contract, and, of course, got only such
rights as the contract gave. Some other subordinate suggestions
were made, but we have disposed of the only questions that are open
here.
Judgment reversed.