Preston v. Whitney

Ohristiancy, J.

The instrument, upon which Preston sought to recover before the justice, was in the following words:

“ $70. Detroit, Nov. 25th, 1869.

“On demand after date, I promise to pay to the order of M. Preston, seventy sollars, value received, with c (ten erased)’ 7 per cent, interest.

“This note is to be valid as part-pay for a piano-forte of me at retail price. C. J. Whitney.”

Prima facie and without any explanatory evidence •aliunde, we think this instrument must be regarded as a promissory note for the payment of money, with the option to the payee to apply it as part-payment on the purchase ■of a piano of the maker, at retail price. The note itself, independent of the memorandum at the. foot, is clearly a promissory note in the ordinary form, for payment in money. ‘The memorandum contains nothing repugnant to, or inconsistent with, this promise. It does not declare that the note is to be valid only as part-payment for a piano, nor declare that it shall be payable only in that way. How far it "was legally competent to explain the intent of this memorandum by evidence aliunde, we need not decide. Admitting such evidence to be entirely competent, the only evidence actually introduced for the purpose of such explanation, was the testimony of Preston, who was called as a witness by the defendant, and whose testimony tended tó show that the real intention of the instrument and of the parties, was substantially in accordance with the construction which we have derived from the instrument itself. From this evidence, it appears that the note was given for money due Preston, which he had paid to defendant on a piano, under an agreement to purchase, which agreement was in writing, and identified by the witness when shown to him in court, on which he had paid one hundred dollars; that he had had the piano three months, and that defendant had deducted thirty dollars for the use of the piano, and had given this note for the balance, the piano having been returned to, and sold by, defendant;' that when the note was made, it was understood between the parties that if Preston should want to buy a piano he should buy it of defendant, but that he was not bound to do so, or to lose the value of the note if he did not choose to take a piano; that plaintiff had not made a demand on the defendant, or applied to him in any way, to have this note or the amount of it applied on the purchase of a piano. .

The defendant introduced no evidence tending to show that the consideration of the note, or the understanding of the parties, was other than that above stated;' and offered no such evidence except that connected with, and as a part of, his offer to introduce the written contract, and to prove its forfeiture. But he offered the written contract in reference to sale of the piano mentioned by plaintiff in his testimony, and proposed, in connection with it, to show by the witness and other testimony, that the same was forfeited Toy the plaintiff on account of non-compliance with its terms as to payments, and the piano returned; that plaintiff proposed, afterward, to purchase another piano of defendant, and urged defendant in the event of such purchase to allow him seventy dollars to apply on such purchase when made, and that, in pursuance thereof, this note was drawn up, and that nothing passed to the defendant for said seventy dollars, except what was paid on said contract.

The justice refused this offer; and if there was anything in the contract, and the facts proposed to be shown in connection with it, which would materially change the nature of the obligation created by the note and the other evidence introduced, or which would constitute a defense to the action or any part of it, then the justice erred, and the circuit court did right in reversing the judgment; but if the evidence offered could have had no such effect, then the defendant has not been injured aud the justice’s judgment should be affirmed.

It is important to look to the nature of the contract itself, a copy of which is set out, as the whole question raised by the proposed evidence depends upon the question of its forfeiture, and the effect to be given to such forfeiture if any. The contract is in the words:

“Mr. C. J. Whitney hereby agrees to sell the following described property, to wit: One piano-forte, manufactured by the New York Union Company, New York, No. 7522, to Marvin Preston, of the city of Detroit, state of Michigan, who agrees to take the same upon the following conditions; the said Preston to pay therefor three hundred and fifty dollars, as follows: Twenty-five dollars on the delivery of this agreement, the receipt of which is hereby acknowledged; and the sum of twenty-five dollars every thirty days thereafter, until the first day of September, 1870, when the full sum of three hundred and fifty dollars, with interest as above named, shall be paid; it being expressly understood that the said piano-forte remain the property of said Whitney, until the full payment as herein agreed shall be paid, and that it shall remain at 210 Second street, in Detroit, unless the written assent of said Whitney is given to move the same. In case the said Preston fails to make any payment as specified, at, and from, the time of such failure, said Whitney shall be entitled to the possession of said piano, and said agreement to sell said instrument shall become void. Witness our hands this first day of July, 1869.” (Signed by respective parties.)

The first payment and three subsequent payments of twenty-five dollars each had been made upon this contract, and in the present aspect of this case it must be admitted that Preston then failed to make the fifth payment called for, within the time specified, and that the agreement to sell became void, or rather that it was terminated according to one of its own provisions. It is obvious that this agreement is one for a conditional sale only, the property remaining in the vendor, as owner, until paid for; that the property never passed to the vendee; and while it is expressly provided that, for non-payment of any one of the several installments, Whitney might take possession and said agreement to sell should become void, no provision is made for the forfeiture by Preston, or the retention by Whitney, of' any sum or any portion of the sum which might have been paid upon it before forfeiture. From the time of the taking of possession, then, the agreement for the sale may be treated as void, or more properly as terminated. The defendant, having received one hundred dollars of plaintiff’s money, paid only in consideration of the proposed purchase, and having taken back the property which constituted the consideration, and having terminated the contract upon which it was paid, has so much of the plaintiff’s money in his hands, for which he should account upon just and equitable principles. He would doubtless have the right to deduct from the amount a fair compensation for the use of the piano during the period it remained in the plaintiff’s possession (or perhaps, at his option, the interest of its price for that period), as well as for any reduction in value from injury beyond that arising from its legitimate use (of which there appears to have been none in this case), and for any incidental expenses in regaining possession (which, however, in this case, were shown to have been paid by plaintiff). But he would have no right, under the terms of this agreement, to claim any forfeiture of all the money which might have been paid, beyond such reasonable compensation; for, as to such excess, he has given, and the plaintiff has received, no equivalent or consideration. The defendant, therefore, after taking back the property, being liable for the excess to the plaintiff, and it appearing from the evidence that thirty dollars was deducted from the one hundred paid, for the use of the piano, and no evidence having been given or offered, to show that the deduction of thirty dollars was made for any other purpose than the compensation above alluded to, or that the defendant was justly entitled to any thing more, the proposed evidence, if given, would not have changed the legal effect of the note, nor constituted any defense to the- action.

Whether it would be competent to provide in such a contract for the forfeiture of all the several installments which might have been paid prior to default, or whether such a provision would be treated as a penalty, according to the principles which distinguish penalties from stipulated damages, is a question upon which we express no opinion.

There was no error in the proceedings before the justice, which could operate to the prejudice of the defendant. The judgment of the circuit court must be reversed and that of the justice affirmed. And the plaintiff in error must recover his costs in all the courts.

The other Justices concurred.