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The formation of a corporation for such purpose was a condition precedent to the right of plaintiff to recover. Until it has done so, it is not perceived upon what theory it can compel payment. If plaintiff can add the element of a power company to its attributes, upon the same principle it may adopt any other function and still hold the defendant liable.

An individual may be quite willing to contribute his money and assume the responsibilities of a stockholder in a corporation to furnish light, and at the same time decline to embark in an enterprise to furnish power, or to engage in other and distinct branches of business.

It is sufficient to say that defendant only agreed to pay his money for stock in a corporation for lighting purposes, and that he cannot, under his contract, without his consent, be compelled to pay money toward the formation of a corporation for an additional and distinct purpose.

Appellant contends that, for the purposes of the organization of the corporation, the subscribers present were the agents for those subscribers who were absent, and in support of the proposition cites West v. Crawford, 80 Cal. 19.

The answer to this contention is that, if the subscribers with defendant are to be deemed his agents in the formation of a corporation, the extent of their authority as such agents only went to the formation of such a corporation as had been agreed upon, and when they went beyond the bounds thus set they exceeded, as against the nonconsenting defendant, their authority, and their acts as to him were void.

This conclusion reached, it follows that the plaintiff is not entitled to recover, and that other questions involved need not be considered.

The judgment appealed from should be affirmed.

197 Haynes, C., and Vanclief, C., concurred.

For the reasons given in the foregoing opinion the judgment appealed from is affirmed.

McFarland, J., Temple, J., Henshaw, J.

CORPORATIONS-SUBSCRIPTION TO STOCK-WHEN BINDING.-A subscription of moneys, to be paid to a corporation not yet existing, is enforceable by it only after it comes into existence: Richelieu Hotel Co. v. International etc. Encampment Co., 140_Ill. 248; 33 Am. St. Rep. 234, and note; Hudson Real Estate Co. v. Tower, 156 Mass. 82; 32 Am. St. Rep. 434, and note; Bryant's Pond etc. Mill Co. v. Felt, 87 Me. 234; 47 Am. St. Rep. 323, and note.


[109 CALIFORNIA, 236.]

SALES UPON CONDITION.-A consignment of goods to the consignee, under a contract stipulating that he shall sell the goods to some third person, that, until they are so sold, he is under no obligation to pay the consignor the cost price, and, until so sold, he may be compelled to surrender the goods to the consignor at any time, is a sale upon condition. Prior to sale by the consignee to a third person, the former has no title to the goods which can be the subject of levy or sale upon execution for his debts.

RETENTION OF TITLE.-THE SELLER OF GOODS MAY, by appropriate contract, retain the title thereto until performance of some valid condition on the part of the buyer. The fact that the property is to be resold by the latter does not affect the rule.

WRITTEN CLAIM OF PROPERTY LEVIED UPON in the hands of one who holds it under a conditional sale, notifying the sheriff that the claimant is the owner of the property, that the execution debtor holds it only for the purposes of resale, that he held it when seized for such purposes only, and not otherwise, sufficiently states the grounds of title required by section 689 of the Code of Civil Procedure of California.

Section 689 of the Code of Civil Procedure, referred to in the opinion of the court, declares that no claim to property levied upon by a sheriff is valid as against him, unless the person by whom it is claimed shall make a verified claim thereto, setting out his title, his right to the possession, and the grounds of such title, and shall serve such claim on the sheriff.

Forbes & Dinsmore, for the appellant.

W. H. Carlin, for the respondent.

237 BRITT, C. Defendant was constable of Marysville township in Yuba county, and was sued in this action by plaintiff, a corporation, for the value of certain marble monuments sold by him July 10, 1893, under writs of execution issued from the justice's court of said township against the property of one Plymire, upon judgments obtained there by creditors of Plymire. The chief question involved is, whether the marble, when 238 levied upon and sold, was the property of plaintiff or of said Plymire. The latter had a marble-shop at Marysville, and was a dealer in funerary stones and monuments; he had been accustomed for several years to purchase from plaintiff unfinished monuments and other marble needed in his business, and, on July 19, 1892, he was in plaintiff's debt some two thousand five hundred dollars for such materials purchased previously to that time, and plaintiff was apprehensive that further sales to him outright would involve loss; to prevent this, Plymire agreed in writing with the

marble company, on the date last mentioned, that, in consideration of its sending to him certain specified monuments "cn consignment," he would hold the same as the property of the company until sold, and subject to its order; that as fast as he sold the monuments he would remit the money-the cost price at which each was listed to him-and when he took notes in lieu of cash he would remit the notes as collateral for his account. Subsequently, in May, 1893, Plymire agreed with plaintiff for a further consignment of goods, specifically described, written memoranda of which agreement provided in substance that he should keep an account of the sale of the monuments described in a book, and send such book to the marble company on the first of each month, and, "as fast as said work is sold and erected," pay to the company the list or cost price to him of each piece of marble sold by him, "either by cash or customer's note," the same to be placed to his credit as fast as cash should be received; that he held the marble merely on consignment to be paid for when sold, and that it remained the property of the marble company "until paid for, as above," and at all times subject to its order. Ten monuments, of the value of six hundred and eighty-three dollars, were converted by defendant, as the court found, and of these, three had been delivered to Plymire under his arrangement with plaintiff of July, 1892, and seven under that of May, 1893. By the terms of an oral agreement not embodied in said written memoranda, 239 Plymire promised that, whenever he received payment from a customer for a monument, he would pay plaintiff an additional sum of twenty-five per cent on the cost price charged him for the same by plaintiff; which further percentage was to be applied on his indebtedness of two thousand five hundred dollars existing before July, 1892. The debts on which the judgments mentioned were recovered against Plymire accrued prior to the receipt by him of any part of the goods in controversy.

Plymire, it was further understood, would take orders for and sell the marble in his own name; he had the right to fix the selling price and the terms of sale; he was to bear the cost of transporting the marble from San Francisco to Marysville; apparently, the marble company exercised no control over his business. The monuments, when seized by defendant, were in the same condition as when received by Plymire from plaintiff, he having done no lettering or other work on them. He testified at the trial: "I was not to sell these monuments in the same condition that I received them. I have to sell them first and then put on the inscription. If a man wanted a design, I showed

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him a style of monument and told him what it would come to when finished and set up; found out how he wanted it lettered, whether he wished any further design carved on it, and then fixed it up, put a bottom base on it, set it up, and then took the money for it." Before the execution sale plaintiff demanded the property of defendant, the particulars of which demand appear in another connection.

Appellant contends that the facts stated evidence a sale on credit, in which the title to the goods passed at once to Plymire, and they thus became liable to execution for his debts, and it is said that it is "unmeaning for parties to a contract to say it shall not amount to a sale when it contains every element of a sale." This latter proposition is doubtless correct; the transaction must be judged by the intent of the parties to it, gathered 240 from the whole scope and effect of their language and their explanatory conduct; mere verbal formulas are to be disregarded if inconsistent with a specific intent thus manifested. But, looking at the facts in the light of this principle, we find no transmission of title to Plymire. "Mere transfer of possession without the agreement, express or implied, that such transfer is a sale on the one hand, and a purchase on the other, will not be a sale or have the effect to transfer the title": Borland v. Nevada Bank, 99 Cal. 94; 37 Am. St. Rep. 32. We consider that the true nature of the transaction was that of a sale upon condition, the condition being, as to each monument, that Plymire should sell the same to some third person; until then he was under no obligation to pay plaintiff the cost price, and until then he was compellable to surrender the goods to plaintiff upon demand. When he sold a monument he was precisely within the case put by Mellish, L. J., in Ex parte White, 6 L. R. Ch. App. 397, 405: "If A hands over his goods to B, and B is to pay him a certain price if he sells, but is at liberty to sell on what terms he pleases, and B then sells to C, the natural inference from these facts is, beyond all doubt, that there is a sale made to B, and another sale from B to C." But obviously there is no completed sale to B until he sells to C; this is illustrated in Nutter v. Wheeler, 2 Low. Dec. (U. S. Dist. Ct.) 346; there W. & Co. were in the habit of sending their manufactured goods to one Gear in Boston, and Gear sold them at such prices and on such terms as he pleased, not less than the trade prices fixed by W. & Co; whenever he made a sale he was to pay W. & Co. in thirty days the prices shown in their list to him, less an agreed discount; after a sale was made by him his credit only was looked to by W. & Co; Gear became bankrupt, and W. & Co. took back the

goods of their manufacture in his shop unsold. The court said: "Until a sale was made, the property in the goods remained in the defendants [W. & Co.], and they were well justified in reclaiming those which remained on hand at the time of the failure 241 of Gear." So, in our opinion, at the time of the levy and sale by defendant here, the monuments were the property of plaintiff and not liable to execution for Plymire's debts.

As suggested by appellant, there may be impolicy in allowing a severance of title and possession where an ultimate sale is designed by the parties, but this consideration is for the legislature and not the courts; the common-law right of the seller, by appropriate contract, to retain the title until the performance of some valid condition on the part of the buyer has been long recognized in this state, as almost universally elsewhere: Putnam v. Lamphier, 36 Cal. 151; Kohler v. Hayes, 41 Cal. 455; Hegler v. Eddy, 53 Cal. 597; Sere v. McGovern, 65 Cal. 244; Benjamin on Sales, Bennetts' (6th ed.), 255, 282, et seq. That the property is to be resold by the first (conditional) purchaser does not affect the rule: Hirsch v. Steele, 10 Utah, 18, and cases cited.

Appellant further argues that the written claim to the marble in question served on him by plaintiff prior to the (xecution sale, under section 689 of the Code of Civil Procedure, is defective in the manner of "setting out the title" and in "stating the grounds of such title," as provided in that section. Waiving the question whether the statute referred to imposes a condition precedent to the right to maintain the action, we think the objection is not tenable; the writing stated, among other things, that plaintiff is the owner of the property, and had delivered it to Plymire for purposes of sale, and that he held it when seized by defendant for those purposes, and not otherwise. The phrase, “grounds of such title," in the code section is not very definite, but we suppose it has reference to the reasons why the claimant avers himself to have a title superior to that of the execution debtor; and the explanation in this instance of the manner in which such debtor acquired possession of the property from the claimant, coupled with a statement of the claimant's ownership, seems to be all that should be required in such a case. Some other points 242 made concerning rulings on matters of evidence at the trial, but they are unimportant; if all were determined in appellant's favor, we cannot see that the result could be affected. The judgment and order appealed from should be affirmed.

Searls, C., and Haynes, C., concurred.


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