
    National Cash Register Company v. Cervone.
    
      Conditional sales — Vendor of property sold may retake only on repayment of portion of price paid — -Section 4155-3, Revised Statutes — Applies to mortgagee or purchaser from original vendee, when — Law of liens.
    
    X. The provisions of section 4155-3, as amended March 19, 1902, relating to conditional sales, are not confined to the original purchaser, but apply to a mortgagee or purchaser from such original vendee.
    2. Where there- has been paid on the contract of conditional sale an amount in excess of twenty-five per cent, of the purchase price, and the vendee has transferred his interest in the property by mortgage or sale, the vendor is not entitled to replevin the property so sold without first tendering to the mortgagee, or purchaser in possession, any amounts paid thereon less a reasonable compensation for the use of the property (not exceeding fifty per cent, of the amount so paid) and for any damage done to it while in possession of the vendee or his assigns.
    3. Where such property has been taken in replevin by the original . vendor without such tender the defendant is entitled to have adjudged to him as damages the amount which should have '.en tendered by the vendor.
    (No. 9839
    Decided February 26, 1907.)
    Error to the Circuit Court of Mahoning county.
    The controversy out of which this error proceeding arises was a replevin suit by the Cash Register Company to recover a cash register and damages for detention. It was begun in a justice’s court. A bond accompanied the affidavit in replevin, and the register was seized by the constable and delivered to the plaintiff. Judgment being rendered by the jus-_ tice, the cause was appealed to the common pleas.
    An answer having been interposed which put in issue the allegations of the petition in replevin, the cause was tried in the common pleas upon an agreed statement of facts which disclosed that, on April 4, 1902, one Willie Moore, a resident of Cleveland, by conditional sales contract, purchased of the Company a cash register at the price of one hundred dollars, payable twenty dollars on delivery and the balance in monthly installments of ten dollars each. The register was delivered to the purchaser at Cleveland, May 8, 1902, and a copy of the contract,with affidavit attached, filed with the recorder of Cuyahoga county. Subsequently divers payments were made by the purchaser amounting in. all to eighty-two dollars, after which, oh November 5, 1903, Moore, having removed to Youngstown, Ohio, gave a chattel mortgage on the register to one Huffman to secure payment of money loaned. Huffman took possession of the register, although he did not file the mortgage. January 24, 1904, the amount secured by the mortgage being unpaid, Huffman sold the register to Angelo Cervone, the defendant in error. Before suit the Company demanded of Cervone that he pay the eighteen dollars balance due or give up possession of the register. He refused to do either. No portion of the eighty-two dollars received by the Company from Moore was refunded or tendered by the Company to any one.
    Upon this state of facts the court found for the defendant, giving him a judgment for fifty-four dollars, the difference between that amount and eighty-two dollars, being found to be a reasonable compensation for damage and use, and this judgment was affirmed by the circuit court.' The Company brings error.
    
      Mr. William M. ■Zimmerman, for' plaintiff in error.
    
      In support of its contention, plaintiff in error seeks to establish the following points:
    1. Before the passage of the “conditional sales” statute the rule was, that the title to personal property sold “conditionally” remained absolutely and without restriction in the vendor, until fully paid for, and he could retake the property if unpaid for in whole or in part, either from the purchaser or from any other person having possession of it. This point is supported by the following authorities: Sage v. Sleutz, 23 Ohio St., 1; Sanders v. Keber, & Miller, 28 Ohio St., 630; Call v. Seymour, 40 Ohio St., 670; Case Manufacturing Co. v. Garven, 45 Ohio St., 289.
    2. The only inroad made on this firmly established rule is that made by the conditional sales statute. This point is conceded by every one.
    3. This inroad does not go to the extent of prohibiting a seller from taking the property, without making the 50 per cent, refunder from an assignee of the vendee.
    To establish this point calls for a full discussion of the “conditional sales” act and decisions thereunder. Section 4155-3, Section 2, Revised Statutes.
    The title of the act is as follows: “An act to regulate conditional sales.” Harris v. State, 57 Ohio St., 92; Burgunder et al. v. Weil et al., 60 Ohio St., 234.
    4 The title of an act, though no part of it, may be considered to explain its object and solve'what is doubtful; for, unlike acts of parliament, is it sanctioned by vote of the legislature. Lessee of Daniel Burgett v. Burgett, 1 Ohio, 469; Steamboat Monarch v. Finley, 10 Ohio, 384; Spiedel Grocery Co. v. Armstrong, Assignee, et al., 8 C. C., 489.
    
      As this is an act to regulate conditional sales, its provisions and benefits should be confined to those interested in the conditional sale; that is, to the original parties thereto, and not to third parties not contemplated in the original transaction. Its purpose is to impose restrictions and confer rights upon the parties to the sale, and not to create transferable rights to a succession of. outside parties.
    Being confined in its operation to the original contracting parties, can its provisions be extended by liberal construction to sub-purchasers ?
    It is apparent from decisions already cited that any rights of possession in a purchaser or his vendee, in case of breach of condition, are purely statutory and in derogation of the common law.
    Being therefore in derogation of the common law, how should the statute be construed; 26 Am. & Eng. Ency. Law, 2d Ed., 662; Felix v. Griffiths, 56 Ohio v. Griffiths, 56 Ohio St., 39. Established common law principles are not deemed abrogated in applying a statute unless clearly so intended. Krause et al. v. Morgan, 53 Ohio St., 26-42; State ex rel., v. Board of Education, 8 N. P., 186; P. C. C. & St. L. Ry. Co. v. Cox, 55 Ohio St., 497.
    Restrictions in an act in derogation of the common law are construed'against the right created by the act. P. C. C. & St. L. Ry. Co. v. Hine, Admx., 25 Ohio St., 629.
    Section 4155-4, Revised Statutes, makes the conditional sales statute a penal one, and it must, therefore, be strictly construed. Hall v. State, 20 Ohio, 7.
    If either Cervone or Huffman is to be put unde? the protection of the statute, it would be a plain “extension by implication,” because neither Cervone • (an assignee) nor Huffman (a mortgagee) is included in the statute. Speyer & Co, v. Baker. 59 Ohio St., 25.
    As intimated by the court, the statute is for the protection of the purchaser. The general restriction on the rights of the vendor should, therefore, be limited to the original purchaser. Goodall v. Gerke Brewing Co., 56 Ohio St., 257.
    The purpose of the statute being for the protection of the original purchaser, its provisions should not be applied to a possible succession of third interests, in which an attempt to make an “equitable adjustment” would be both absurd and impossible.
    A transferee of a. chattel does not (ipso facto) become clothed with the contractural rights of his assignor in regard to the thing transferred.
    This rule is elementary and applies to rights created by statute and read into the contract, as well as to stipulations of the parties, such as warranties, guarantees, etc.
    The goods may be assigned,, but the assignee takes them with full knowledge of the vendor’s rights under the contract, that is, to retake immer diately upon default. He runs his chance of having this right enforced against him, when he negotiates with the original purchaser for the goods.
    It will be. noted that the original statute did not include the assigns of the vendor, whereas the amended statute does include the assigns of the vendor. It will also be noted that the original statute did not include the assigns of the purchaser, neither does the amended statute include the assigns of the purchaser.
    In amending this statute, the legislature expressly added to the vendor the words “or his assigns.” The fact that they did not add these same words to the purchaser, clearly indicates that the legislature intended to exclude the assigns of the purchaser from the benefit of this statute. Moreover,, the amended statute adds the words “or any party re-receiving the same from .the vendor,” thus making it absolutely certain that the vendor need only tender the money to the original party (if the original party is in possession), whether he be known as purchaser, lessee, renter, hirer, or by any other name.
    It is only by force of the statute that the original vendee can claim a refunder. Before the statute and without it, even he could not claim any refunder. The vendee of the original purchaser or the assignee of the original purchaser, can not claim any refunder, because the statute does not include him.
    If this reasoning is sound, the National Cash Register Company was excused from making any tender to Cervone, who bought the register from Huffman, who got it on an unrecorded chattel mortgage from Moore. '
    It appears that Section. 4155-3, as originally passed, was meant for the protection of the original purchaser, and it is clear that neither Huffman nor Cervone have paid anything on the original contract to the Company. The Company has never received any money from Huffman nor from Cervone. Why should it “refund” any money to either one of them? Moreover, when both Cervone and Huffman acquired their interests in the property, they had notice from the filing of the contract, both in Cleveland and in Youngstown, that the property belonged to the National Cash Register Company.
    In Albright v. Meredith, 58 Ohio St., 194, thvendor sought, by levy, to take the register from the original vendee. Therefore the court held that the vendor should have made a refunder. In the case at bar the vendor is seeking to take the property from an assignee of a mortgagee of the vendee. There is therefore a wide difference between the cases. Moreover, in Albright v. Meredith, the vendor by its judgment and execution had “elected to treat the register as Morrow’s (the original vendee’s) property.”
    
      Mr. W. J. Williams, for defendant in error.
    There are only two questions to be determined in this case.
    First. Aré the provisions of Section 4155-3 restricted to the original vendee under a contract of conditional sale, or do they also apply to an assignee or vendee of the original vendee ?
    ' Second. Should the amount to which a vendee is entitled under said Section 4155-3 be awarded to him as damages when the property is taken in replevin at the suit of the vendor without the vendor having tendered back any part of the purchase price ?
    There is no dispute as to the common law rights of vendor and vendee under a contract of “conditional sale” before the enactment of Sections 4155-2 and 4155-3. There was then no question as to the right of the vendor upon default in payment of the purchase price under a contract . of “conditional sale” to retake the chattel either from the original vendee or from a bona fide purchaser from the original vendee; and until the enactment of said statutes the vendee under such a contract acquired no title which he could either sell or mortgage; but since the enactment of said statutes this court has decided the case of Albright v. Meredith, 58 Ohio St., 194. In that case the contract involved contained exactly the same conditions as the one in this case, and it necessarily follows that if the • vendee acquires an interest which he can mortgage, that interest he can also sell, and on this question we think no further authority is needed than the case cited above. If by our “conditional sales” statutes, no one other than the original vendee can acquire any title to property sold under a contract of “conditional sale,” then the rights of third parties are no greater than they were before the enactment of these statutes, but this can not be true under the holding in Albright v. Meredith, cited above, or else no mortgagee of the original vendee could acquire an interest in property so sold, and therefore the original vendee could have no right or interest in the property which he could mortgage.
    The second question has been decided by this court in Speyer & Co. v. Baker, 59 Ohio St., 11.
    By these two decisions the law of this case has been estabished in Ohio, and in them the court has rendered effective the provisions of the statute, not as an “inroad upon the rights” of any one as suggested by counsel of plaintiff in error, but rather as a wall built broad and high across the well-beaten path to legal robbery long traveled with impunity by the “installment” companies of this state; a protection to all who enjoy the privilege of paying two prices for property by the “installment” plan, whether the unfortunate original purchaser, or the third party to whom necessity may have compelled him to sell 'before the entire purchase price has been paid. Of course it is conceded that the reputation and methods of doing business of the plaintiff in error as compared with the average “installment” company are as an “Angel of Light” to the “Prince of Darkness,” yet it is a well known fact that their goods sell on the installment plan for almost double what they will sell for cash.
   Spear, J.

We are of opinion that the judgments of the lower courts are right and will endeavor briefly to state the ground for this conclusion.

Prior to the passage of the conditional sales statute of May 4, 1885 (82 Ohio Laws, 238), the title to property so conditionally sold remained absolute in the vendor until the purchase price should be fully paid; and he. might retake the property if any part of the purchase money remained due and unpaid either from the purchaser or any person having possession of it. That act (incorporated in Bates’ Annotated Statutes as Section 4T55-3) provided that it should be unlawful for the vendor or his agent, etc., to take possession of the property without tendering or refunding to the purchaser, or party receiving the same, the sums so paid after deducting a reasonable compensation, not exceeding fifty per cent, of the amount paid, unless the property had been broken or damaged, and in such case a reasonable compensation for such damage to be allowed. It further provided, in a separate section, that any violation should be deemed a misdemeanor punishable by fine. Section 4155-3 was amended March 19, 1902 (95 Ohio Laws, 6a), and reads as follows:

Section 4155-3. ' “(Vendpr of property conditionally sold may not retake possession without repaying certain part of price paid; exception.)

“Whenever such property, except machinery equipment and supplies for railroads and contractors, and for manufacturing brick, cement and tiling, and for quarrying and mining purposes, is. sold or leased, rented, hired or delivered, it shall be unlawful for the persons who so sold, leased, rented, hired, delivered, or his assigns or the agent or servant of either their agent or servant to take possession of said property, without tendering or .refunding to the purchaser, lessee, renter, or hirer thereof or any party receiving the same from the vendor, the sum or sums of money so paid after deducting therefrom a reasonable compensation for the use of such property, which shall in no case exceed 50 per cent, of the amount so paid, anything in the contract to the contrary notwithstanding, and whether such condition be expressed in such contract or not, unless such property has been broken, or actually damaged, and then a reasonable compensation for such breakage or damages shall be allowed. Provided, that the vendor shall not be required to tender or refund any part of the amount so paid unless said amount so paid to the vendor exceeds 25 per cent, of the contract price of the property.”

The noticeable changes effected by the amendment are the provision that “machinery, equipment and supplies for railroads and contractors, and for manufacturing brick, cement and tiling, and for quarrying and mining purposes,” are excepted from the operation of the statute; also that the words “or his assigns” follow the words descriptive of the vendor in the original section; also that the words “from the vendor” are incorporated as new matter after the words “receiving the samé” in the original section. The proviso with which the section concludes is not of importance in this inquiry.

It does not seem to be contended by counsel for plaintiff in error that under the statute as it existed prior to the amendment the position assumed by him here could be maintained, but it is contended that the changes in the statute above referred to,' and which are given in italics, show that the legislative purpose’was not to change the common law rule to the extent of requiring the vendor to make the refunder specified in the statute where the property had been sold or assigned by the original purchaser to another, but in such case he may retake the property without condition so long as anything remains due on the original purchase. In other words the contention is that the tender of money need only be made, to the original purchaser, if in possession, and need not be made to any subsequent purchaser, although in possession. Counsel invoke the well-known rule of construction that statutes in derogation of the common law are to be strictly construed, and should not be extended beyond the plain import of the words used. This plain import, say the counsel, is that the provisions and benefits of the act should be confined to those interested in the conditional sale, and not to third parties not connected with the original transaction, the purpose being to impose restrictions and confer rights upon the original parties to the sale, and not to create transferable rights to a succession of outside parties.

There is plausibility in these propositi.ons standing alone. But, without' here entering upon a discussion as to their soundness, we are of opinion that they lose sight of and override the effect of that rule of the common law, as well established as any other, that in the absence of valid contract obligation or plain statutory provision to the contrary, ownership of property, whether it be absolute or qualified, carries with it the power of disposition, 'and this necessarily implies the acquisition by the purchaser by virtue of the sale of all the rights of the vendor. Otherwise the ownership of property is shorn of one of its most essential and valuable qualities. Effect can not be given to the proposition of counsel without impinging upon, indeed denying, this valuable property right, and the purpose of a statute to accomplish this result should not be presumed unless such purpose is clearly expressed in the statute itself. We look in vain in the language of the section under review as amended for the plain expression of any such purpose. Of course the exception incorporated in the amended section served no other purpose bearing on intent than to indicate that'the general assembly regarded that exception as affording one sufficient reason for some amendment. The same may be said of the proviso. The incorporation of the words “or his assigns” gives no right to the vendor that the common law rule would not afford, and the omission of like words applicable to the' purchaser does not deprive him of any right which the same rule of the common law would bestowj while the words “from the vendor” are at most equivocal and do not appear to be conclusive of an intent to require that the reception of the property referred to should be directly from the vendor rather than through another. Albright v. Meredith, 58 Ohio St., 194, is authority for the proposition that “one in possession of chattel property under a contract of conditional sale, who has paid a part of the purchase money, has acquired an interest in the property which may be mortgaged,” and in the opinion it is held that the “mortgage was good as to all the world save the vendor, and good against it save only when it asserted its right in accordance with law.” The cases of Standard Steam Laundry v. Dole, 61 Pac. Rep., 1103 (Utah); Myres v. Yaple, 60 Mich., 339; Barton v. Groseclose, 81 Pac. Rep., 623 (Idaho); Kimball Company v. Mellon, 80 Wis., 133, and Ross-Mehan Brake Shoe Foundry Company v. Pascagoula Ice Company, 72 Miss., 609, although relating to the rights of the vendor rather than those of the vendee, are consistent with the ruling in the Al-bright case and in reasoning support it, it being held in the last above-cited case that “the reservation of the title is but as.security for the purchase price, and if the property is recovered by the seller, he must deal with it as security, and with reference to the equitable rights of the purchaser. Being but a security for the payment of money, the benefit thereof, follows the debt when assigned, as an incident thereof.”

In the case at bar, as in the Albright case, a mortgage was executed by the original purchaser, though in this case with possession. It being thus shown that Moore acquired an interest which might be mortgaged, it would follow that, in the absence of a plain provision of statute to the contrary, the mortgagee would acquire the property rights of the mortgagor, and such rights he might sell, which he did in this case. Authorities are abundant, if any are needed, that statutes regulating or restraining the disposition of private property are in derogation of common right, and must be construed strictly. 26 Am. & Eng. Ency. of Law, 662, and authorities cited.

In this condition of legislation it will conduce to an understanding of the proper result to consider the general intent and purpose of the statute. This is declared in Speyer & Co. v. Baker, 59 Ohio St., 11, opinion by Williams, J., thus: “Purchasers on this plan are usually persons of small means, and unable to pay except in installments; and such sales are, partly on that account, made at prices in excess of those charged in other cases. Payment of part of the installments may amount to more than the actual worth of the property; and, on account of the unconscionable advantage which the vendor would otherwise have, by taking the property and retaining the money paid, the legislature deemed it proper to adopt the equitable rule of adjustment prescribed by the statute.” The statute referred to is the section as it stood before the amendment of March 19, 1902, and the holding as to the point here in consideration is this: “Where a purchaser at such sale has made payments on the property, he is entitled to its possession, though in default as to other installments, until there shall be refunded or tendered back the amount so paid, less a reasonable compensation for the use of the property and for any damage done to it while in his possession; and the amount which he is so entitled to have refunded should be awarded him as damages when the property is taken in replevin at the suit of the vendor.”

Inasmuch, however, as we have found that the amendment makes no material change respecting the point at issue, we see no reason why the above holding, in connection with the Albright case, does not practically dispose of the controversy in the case at bar. . •

The judgments of the courts below will be

Affirmed.

Price, Crew and Summers, JJ., concur.  