Walter A. Wood Mowing & Reaping Mach. Co. v. Vanstory

• Decision Date: 09 June 1909
• Docket Number: 874.
• Citation: 171 F. 375
• Parties: WALTER A. WOOD MOWING & REAPING MACH. CO. v. VANSTORY.
• Court: U.S. Court of Appeals — Fourth Circuit

171 F. 375

WALTER A. WOOD MOWING & REAPING MACH. CO. v. VANSTORY.

No. 874.

United States Court of Appeals, Fourth Circuit.

June 9, 1909

This is an appeal from an order of the District Court sitting as a Court of Bankruptcy of the United States for the Western District of North Carolina, approving and confirming the report of the special master herein, and dismissing appellant's petition for the possession of certain machinery in the hands of the trustee in bankruptcy of the Wakefield Hardware Company.

The petition alleged: That, for a number of years and up to the filing of the petition of bankruptcy, the Wakefield Hardware Company acted as agent for the appellant for the storage and transfer of certain mowing and reaping machinery; that the Wakefield Hardware Company agreed to receive machinery belonging to the appellant, to store the same, and to ship the same out on the order of the appellant to parties whom appellant should designate; that it was agreed by the appellant that the Wakefield Hardware Company should receive a fixed compensation for this service; that, in accordance with this agreement, machinery was, from time to time, to be delivered by the appellant to the Wakefield Hardware Company to be held according to the terms of the said agreement; and that certain machinery now in the possession of the trustee in bankruptcy of the Wakefield Hardware Company, and easily capable of identification, was acquired by virtue of this contract to be stored and reshipped according to the terms thereof.

The petition further alleged: That, in September, 1906, the appellant entered into written contracts with the Wakefield Hardware Company, promising to sell and deliver to the said company certain machinery, but on the express condition and trust that all such machinery and the proceeds of all sales thereof, whether the same consisted of notes, cash, or book accounts, should be held by the Wakefield Hardware Company as collateral security in trust and for the benefit of and subject to the order of the appellant, until all indebtedness due said appellant by the Wakefield Hardware Company should be paid in full in cash; that certain machinery was delivered to the Wakefield Hardware Company in pursuance of the terms of this contract; and that certain pieces of the said machinery, described in the petition and easily capable of identification, are now in possession of the trustee in bankruptcy.

The petition prayed that the trustee in bankruptcy might be ordered to turn over to the appellant both the machinery which had been received by the Wakefield Hardware Company for the purpose of storage and transfer and also the machinery which had been received by the said company in accordance with the contracts of September, 1906, and which was described in said contracts, and which by the agreements in said contracts was held in trust for the benefit of and subject to the order of the appellant.

John J Parker (David Stern, on the brief), for appellant.

Thomas S. Beall and Robert R. King (Scott & Mclean and King &amp Kimball, on the brief), for appellee.

Before GOFF and PRITCHARD, Circuit Judges, and DAYTON, District Judge.

PRITCHARD Circuit Judge (after stating the facts as above).

In passing upon the question sought to be determined by this appeal, it will only be necessary to consider the third and fourth assignments of error.

The third assignment of error relates to the property described in the first section of the petition, which reads as follows:

'That for a number of years and up to the time of filing of petition of bankruptcy herein, the Wakefield Hardware Company acted as agent for your petitioner for the storage and transfer of certain mowing and reaping machinery. That the Wakefield Hardware Company contracted with your petitioner to safely and securely keep certain mowing and reaping machinery for your petitioner and deliver the same to your petitioner or its agent on request. That your petitioner under said agreement has stored with the Wakefield Hardware Company for safe-keeping, and the said Wakefield Hardware Company has received for storage and safe-keeping, the following mowing and reaping machinery, all manufactured by the Walter A. Wood Mowing & Reaping Machinery Company, to wit: 5 mowers; 5 self-dump rakes; 6 hand-dump rakes less 1 set teeth and 1 wheel; 2-8-18 disc harrows; 3-10-20 disc harrows; 3-8-20 disc harrows; 5-10-20 disc harrows; 3-3 horse attachments; 13-2 horse attachments; 14 spike-tooth harrows; a lot of machinery repairs, consisting of a large number of nuts and bolts, amounting in value to $276.21, which said repairs are separated in boxes and bins in the store of the Wakefield Hardware Company. That all of the above-described machinery and repairs is on the second floor and in the basement of the store on North Elm street, Greensboro, N.C., formerly occupied by the bankrupt, and all is easily capable of identification as property of your petitioner. That your petitioner promised to pay the Wakefield Hardware Company as storage and transfer charges the sum of $1 on each mower, and the sum of 50 cents on each rake, and the sum of 50 cents on each disc harrow, and the sum of 25 cents on each spike-tooth harrow, all of which your petitioner is willing and ready to pay as soon as its rights herein are determined.' The special master in his report, in dealing with the property described in the first paragraph of the petition, among other things, announced the following conclusions of law:

'First. It is contended by the petitioner: That the contract between it and the bankrupt in regard to the machinery described in the first finding of fact was one of bailment, and, at most, that of agency. That while the bankrupt could dispose of any machines described in the first finding of fact to its own customer at any time it saw fit without reporting the sale to the petitioner, that this was merely for convenience, and that the sale was made as the agent of the petitioner, and that the title had never passed to the bankrupt.

'In my opinion the facts do not bear such construction. The evidence is that the bankrupt was permitted by the petitioner to carry insurance in its own name, and for its own benefit, upon the machines. The bankrupt had a right to sell any machines at any time it saw fit to its own customer upon its own terms and use the proceeds as its own without reporting the sale or either remitting the proceeds to the petitioner. There is not evidence that it was allowed any commission upon such sale. It was not required to account for such machines so sold until the time of annual settlement. If it failed to account for the machines so sold, the only remedy of the petitioner would have been a civil action for debt. These facts, in my opinion, establish the relation of debtor and creditor and pass the title from the petitioner to the bankrupt.'

This presents squarely the question as to whether the contract by which this property was transferred comes within the definition of a 'bailment.' Therefore it is essential that we should correctly determine as to what constitutes a 'bailment.' The following definition is to be found in the American & English Encyclopaedia of Law (2d Ed.) vol. 3, p. 733:

'Bailment is the delivery of goods for some purpose, upon a contract, expressed or implied, that after the purpose has been fulfilled they shall be redelivered to the bailor or otherwise dealt with according to his directions, or kept until he reclaims them.' 2 Blackstone, Commentaries, 451; Story on Bailments (9th Ed.) par. 2.

It is well settled that a bailment merely transfers the possession of the property, the absolute title of which is retained by the owner, who has the right to dispose of the same as he may see fit.

It appears from the evidence that the machines to which reference is made in section 1 of the petition were received from the petitioner by the bankrupt, with the distinct understanding that they were to be stored by it and held as the property of the petitioner, and as such were to be subject to the order of the petitioner at all times.

Mr. Starke, a representative of the Walter A. Wood Mowing & Reaping Machine Company, testified on behalf of the petitioner as follows:

'Q. State to the court the general course of business between Walter A. Wood and the Wakefield Hardware Company that you had as a personal auditor. A. I will try to make the method of business as clear as I can. We send out travelers as in this case, who call upon these men, and these dealers, and in this particular instance the Wakefield Hardware Company, they were approached by our traveling man as had been his custom for 18 or 20 years, representing us here in this same capacity. There is a contract drawn up with the Wakefield Hardware Company, in which they agree to purchase a certain number of machines, and years ago it was our custom for them to draw up what we called a 'transfer and storage agreement'; but in these latter years we have not gone to that trouble. Everybody thoroughly understood it, and if the Wakefield Hardware Company for instance should have ordered, say, a half dozen machines, we would have shipped down there a car load of machines. The wakefield Hardware Company appreciated the fact that in that car load were these half dozen machines which were theirs by purchase which was set forth in contract which will be taken up later. And the remainder of those machines were left with the hardware company on storage account to be used by the Walter A. Wood Company later on; that is to say, if a man over at Winston, which we call a local agent, was to write us to ship him a machine, rather than to ship it from Hoosic Falls, to furnish him quicker and save freight charges, then we

...