Reset A A Font size: Print

District Court of Appeal, Third District, California.


Civ. 6534

Decided: March 31, 1941

Nathan G. Gray, of Berkeley, for appellant. Adams & Griswold, of Merced (Claude H. Adams and Hugh H. Griswold, both of Merced, of counsel), for respondent.

This action was brought to recover damages arising out of a conversion of a tractor and disc. Findings were entered in favor of defendant, and judgment entered that plaintiff take nothing from defendant. The appeal is from the judgment.

The facts are practically undisputed. On January 10, 1935, John Mogliotti purchased a tractor and disc from defendant, under a conditional sales contract which contained the following provisions relating to the remedies which the seller might exercise in the event of a failure or omission of the buyer to keep any or all of the terms and conditions thereof:

“In the event of the happening of any of the above contingencies, seller may, at its option, without demand or notice, exercise any of the following remedies:

“First: It may without notice elect to treat the entire remaining balance of the purchase price and interest, evidenced by said promissory notes due and payable immediately and sue therefor; or

“Second: It may without demand or performance or notice, retake possession of said property and may, at public or private sale, with or without notice, with or without having the property at the place of sale, and upon such terms and in such manner as it may determine, sell the said property (seller being permitted to bid at any public sale) and after deducting all expenses (including reasonable attorney's fees) incurred therein credit the net proceeds of the sale to the unpaid balance due hereunder; any surplus shall be paid to buyer; and buyer agrees to pay to seller any deficiency remaining under this contract or under said promissory notes after such resale is completed and the proceeds applied as herein provided; or

“Third: It may take possession of said property wherever and whenever found, and with or without notice or demand, may elect to treat buyer in default, and in such event, all of the rights, titles and equities of buyer in said property shall immediately cease and determine, and seller shall be released from all obligations to transfer or deliver said property to the buyer, and all sums of money theretofore paid, and all sums then due and unpaid by the buyer to seller hereunder or under said promissory notes shall remain the property of seller and shall be considered compensation for the use, wear and tear and depreciation of said property, and buyer agrees forth-with to pay to seller all of said payments which are then due and unpaid; or

“Fourth: It may avail itself of any of the remedies for the enforcement of a seller's rights under an agreement such as this, as provided by the laws of the State of California.”

On February 11, 1936, said contract was purchased by plaintiff through an assignment, and the sum of $1,240.87 was paid to defendant as consideration therefor. As part of the transaction, several promissory notes of Mogliotti were also assigned to plaintiff. These represented a portion of the purchase price. Mogliotti failed to make any further payments under the contract, and on December 13, 1939, plaintiff commenced an action against Mogliotti to recover upon said notes. An attachment was issued and levied upon a tractor, which was afterward released upon a third party claim filed by defendant. It appeared that the original tractor had been traded in by Mogliotti with defendant on the purchase price of another tractor. The sum of $575 was fixed as the value of the first tractor, and that amount was credited upon the purchase price of the second. On June 18, 1940, judgment was entered in that action in favor of plaintiff in the sum of $1,504.22, and $150 as an attorney fee. Prior to the last-mentioned date, and on March 14, 1940, this action was commenced.

The sole question is the sufficiency of the evidence to support the following finding:

“It is true that plaintiff did, prior to the bringing of this action, exercise one of the options which it was entitled to exercise under the terms of said contract, and did fully and irrevocably elect to enforce payment of the purchase money for said personal property, and did fully and irrevocably waive its option to repossess itself of such personal property.”

The general rule governing the situation here presented is thus stated in 7 Blashfield Cyclopedia of Automobile Law and Practice, Perm. Ed., § 4631, p. 257: “The general rule in most jurisdictions, in the absence of a controlling statute, is that, under a contract of conditional sale by which title is not to pass to the buyer until the price is paid, possession being given to the buyer and the seller having a right to take possession upon default in payment, the seller upon such default is put to his election, either to retake possession and relinquish any right to the price or to recover the price and relinquish the right to retake possession, and that, if he pursues one remedy, he loses the right to the other.”

The foregoing rule is predicated upon the doctrine of election of remedies which is laid down as follows in 20 C.J., p. 17, § 12: “Where a party has grounds to bring separate actions against different persons, and the maintenance of one necessitates the allegation of a fact, or the assumption of a position, inconsistent with, or repugnant to, the maintenance of another, he is bound by his election, and cannot proceed against the other. In other words, where a party has suffered an actionable wrong he will not be permitted to pursue inconsistent remedies against different persons.”

In 9 R.C.L., p. 957, § 1, it is stated: “The basis for the application of the doctrine is in the proposition that where there is, by law or by contract, a choice between two remedies, which proceed upon opposite and irreconcilable claims of right, the one taken must exclude and bar the prosecution of the other—the same principle being applicable also to a choice of defenses. The doctrine of election of remedies is, therefore, generally regarded as being an application of the law of estoppel, upon the theory that a party cannot, in the assertion or prosecution of his rights, occupy inconsistent positions.”

The rule laid down by Blashfield is followed in California. In George J. Birkel Co. v. Nast, 20 Cal.App. 651, 129 P. 945, the court reviews the authorities in this state on all phases of the question. We quote from the opinion:

“The provision of the contract, to the effect that the title to the piano should remain in plaintiff until payment of the full purchase price thereof, was inserted for the purpose of securing such payment, and therefore was for the benefit alone of the vendor. Being for its sole benefit, it had the right to waive the same. Shepard v. Mills, 173 Ill. 223, 50 N.E. 709. Plaintiff could not retake the piano and also sue for the price thereof. Muncy v. Brain, 158 Cal. 300, 110 P. 945. Therefore, when it brought this action for the purchase money, it waived its right to retake possession, and elected to enforce payment. Having exercised its option to sue, it was debarred from all right to recover the property under a claim that title had not passed to defendant. Holt Mfg. Co. v. Ewing, 109 Cal. 353, 42 P. 435; Parke, etc., Co. v. [White River] Lumber Co., 101 Cal. 37, 35 P. 442. The legal effect of such election was, immediately upon the filing of the complaint, to transfer to and vest in defendant title to the piano as completely as though defendant had made full payment therefor. Elsom v. Moore, 11 Cal.App. 377, 105 P. 271; Shepard v. Mills, supra [173 Ill. 223, 50 N.E. 709].”

The instant case is even stronger for here the seller not only elected to pursue one of the remedies set forth in the contract,—an action on the notes,—but he secured judgment therein after he had commenced the action for conversion. Furthermore, he attempted to attach the property sold. Such facts clearly indicate an election upon the part of plaintiff to treat the property as belonging to the buyer, as such remedy could only be pursued upon the ground and basis that title had passed and was vested in the buyer. On the other hand, this action in conversion must be predicated upon the ground that plaintiff had a general special ownership in the property. Rosenthal v. McMann, 93 Cal. 505, 29 P. 121. Such remedies being alternative and inconsistent, the doctrine mentioned is applicable, and after exercising his election by bringing the first action on the notes, which represented the balance of the purchase price, seeking to attach the property and prosecuting said action to judgment, plaintiff was estopped from thereafter maintaining the action in conversion. We therefore conclude that there was sufficient evidence to sustain the finding in question.

It is contended by appellant that there were no alternative remedies available to plaintiff for the reason that when the first action was filed, the buyer did not have possession of the property. Therefore, he argues, the case does not come under the rule stated in the California cases which all involve a choice between an action for the purchase price and one to repossess the property. We believe that this action is just as inconsistent as one brought to recover possession. That has been pointed out above. It is also clearly an alternative remedy.

It is next contended that the doctrine of election of remedies cannot be applied in favor of a third party, that is, anyone who is not a party to the contract, and who is a stranger to the transaction. That is no doubt the rule (20 C.J., p. 17, 18, § 12), but here, defendant was an original party to the contract. It is true it had assigned it, but there is privity in estate between an assignor and assignee. 50 C.J. 406, § 2, B, 1. Defendant, therefore, was not a stranger to the transaction. In the case of Roullard v. Rosenberg Bros. & Co., 193 Cal. 360, 224 P. 449 (cited by appellant), respondent was denied the right to invoke the doctrine upon the ground that the record showed that he was a stranger to the transaction.

It is contended by appellant that as the record shows the buyer, Mogliotti, to have been insolvent, their judgment was worthless. They urge that as the remedy by suit on the notes was unavailing, the doctrine of election of remedies does not apply. We can find no authority for such a contention. The election was made, and the estoppel arose when the complaint was filed, and whether or not anything was realized through execution under the judgment does not affect the situation. It was the duty of plaintiff to investigate whether or not the buyer was solvent or insolvent, prior to the commencement of the action, and as said in Holt Mfg. Co. v. Ewing, 109 Cal. 353, 42 P. 435, 436, “it cannot shield itself from the result of this want of care”.

The court found that there was no conversion of the property. This necessarily followed because plaintiff, by his election to sue for the balance of the purchase price, thereby transferred to and vested in the buyer, title to the property. See Birkel case, supra. He therefore could not prevail in an action for conversion. He had neither ownership, possession or right to the possession. 65 C.J. 80, § 131.

The judgment is affirmed.

TUTTLE, Justice.

We concur: PULLEN, P.J.; THOMPSON, J.