284 F. 8 (4th Cir. 1922), 1985, Industrial Finance Corp. v. Capplemann
|Citation:||284 F. 8|
|Party Name:||INDUSTRIAL FINANCE CORPORATION v. CAPPLEMANN. In re BURNS MOTOR CO.|
|Case Date:||October 21, 1922|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
W. C. McGowan, of Columbia, S.C. (Benet, Shand & McGowan, of Columbia, S.C., on the brief), for plaintiff in error.
C. W. McCants, of Columbia, S.C. (Barron, Frierson, McCants & Elliott, of Columbia, S.C., on the brief), for defendant in error.
Before WOODS and WADDILL, Circuit Judges, and GRONER, District Judge.
WOODS, Circuit Judge.
In February, 1921, Burns Motor Company, automobile dealers in Columbia, S.C., purchased from Studebaker Corporation six motor cars for cash, paid in this manner: On arrival of bill of lading and sight draft of the Studebaker Corporation, Burns
Motor Company paid the Bank of Columbia 20 per cent. of the purchase price, and accepted a draft payable at a future day, drawn on it by the Industrial Finance Corporation, for the remaining 80 per cent. With this acceptance the Burns Motor Company executed a 'trust receipt' for the bill of lading in these terms:
'In consideration thereof, it is agreed that the undersigned will hold said property in trust as the property of said Industrial Finance Corporation, for the purpose of storing said property in a clean, dry place, free of charge; that the undersigned has not the right to, and will not, operate or use said property of the Industrial Finance Corporation for demonstration or other purposes, nor loan, rent, mortgage, pledge, incumber, sell or deliver said property except as authorized herein; that the undersigned may sell said property for the account of the Industrial Finance Corporation or holder of said acceptance, for cash or current funds approved by Industrial Finance Corporation, in amount not less than the sum then due on said acceptance, including interest; that the undersigned, upon demand prior to such sale, will return said property unused and in good condition to the order of the Industrial Finance Corporation; that in the event said property shall be sold as provided herein, the undersigned will hold the proceeds thereof in trust and separate from his (its, their) funds, and will forthwith account for and pay over said proceeds or sufficient thereof to satisfy said acceptance with interest, to the Industrial Finance Corporation for the holder of said acceptance. It is understood that nothing herein shall prevent the undersigned, at the time he first takes possession of said vehicle, from driving it direct from warehouse, factory or railroad station to his place of business but at his own risk (except in case of theft or fire), in the event of loss or damage to said car or to other property or to persons.'
The bank forwarded the acceptance and trust receipts with its own draft on the Industrial Finance Corporation, and the Industrial Finance Corporation paid the drafts. None of the papers were recorded.
On or about April 25, 1921, Industrial Finance Corporation being informed that Burns Motor Company had converted other Studebaker cars held by them on like trust receipts, it at once demanded possession of the six cars here in controversy. In pursuance of this demand five of the automobiles were delivered on April 30, 1921, and one on May 4, 1921. The attorneys for Industrial Finance Corporation gave a receipt for them in this form:
'Received of Burns Motor Company the following Studebaker automobiles. * * *
'The above-mentioned automobiles are received for the account of the Industrial Finance Corporation under the terms of certain trust receipts held by said Industrial Finance Corporation, covering said cars, said receipts now being in the possession of the Bank of Columbia. It is understood and agreed that the interest of any person, persons or parties in said automobiles other than the Industrial Finance Corporation will be protected by said Industrial Finance Corporation before said...
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