45 F.2d 502 (5th Cir. 1930), 6028, Samson Tire & Rubber Co. v. Eggleston

Docket Nº:6028.
Citation:45 F.2d 502
Case Date:December 16, 1930
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 502

45 F.2d 502 (5th Cir. 1930)




No. 6028.

United States Court of Appeals, Fifth Circuit.

December 16, 1930

F. W. Davies, of Birmingham, Ala. (Coleman, Coleman, Spain & Stewart, of Birmingham, Ala., of counsel), for appellant.

William S. Pritchard, Geo. W. Yancey, and Al. G. Rives, all of Birmingham, Ala. (London, Yancey & Brower and John D. Higgins, all of Birmingham, Ala., of counsel), for appellee.

Before BRYAN and WALKER, Circuit Judges, and HOLMES, District Judge.

HOLMES, District Judge.

The appellant, Samson Tire & Rubber Company, filed its petition in the court below to reclaim from the trustee in bankruptcy a number of automobile tires and tubes in the possession of the O. J. Umphrey Oil Company at the time the latter was adjudicated a bankrupt. The petition was first heard and denied by the referee, whose order was later reviewed and upheld by the District Judge.

The claimant, who was a manufacturer of automobile tires and tubes, entered into a written contract with the bankrupt, who was a dealer in such merchandise in the city of Birmingham, for the alleged storage and distribution of its products. The written instrument was termed a warehousing agreement, and, according to the appellant, the delivery of the goods in controversy under it constituted a bailment. The contention of appellee is that in truth the real transaction between the parties amounted to a sale.

The agreement is long, complicated, and in some of its provisions contradictory of others. In it the appellant is denominated as the company, and the O. J. Umphrey Oil Company as the dealer. After reciting that the company desires to have its products adequately stocked in the city of Birmingham, for the purpose of providing suitable distribution in said city and in certain surrounding territory, and that the dealer desires to arrange with the company for the storage and distribution of the same, the contract provides for the consignment to itself of each quantities of tires and tubes as the company

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pleases to ship, for which the dealer shall furnish adequate and safe storage space within his place of business in said city, without expense to the company, said space to be so arranged that the tires and tubes shall be kept separate from the other merchandise. It further provides that the title and possession shall remain in the company, except as to such property as may be withdrawn by the dealer for sale to himself; that the dealer shall be responsible for the safe-keeping of said stock, except as to damage by fire, this, notwithstanding that title and possession remain in the company; that the company shall have access to the same; that the dealer shall ship from said stock for the company's account to such customers as the company designates tires and tubes within certain territorial and credit limits, but it is specifically agreed that any shipments made by the dealer in excess of such established limits, and for which he does not have written authority from the company, shall be strictly for his own account and upon his own responsibility; that all trucking, hauling, and packing in the said city shall be furnished by the dealer without expense to the company; that the dealer shall not accept products, returned by customers, for the company's account without special authority of the latter; that the dealer out of the stock shall be charged to himself at list prices; that invoices for tires and tubes furnished the dealer shall be payable upon the 10th of the month next following the month in which shipment is made, but a cash discount of 2 per cent. is allowed for earlier payments; that the company may decline to furnish merchandise to the dealer except for cash; that the company will grant the dealer a trade discount upon his net purchases from stock; that as full compensation for all services rendered by the dealer the company shall allow him a credit of 5 per cent. upon stock shipped from storage by him to customers of the company other than to himself; that the dealer agrees to carry insurance on the stock purchased by him sufficient to cover any indebtedness due the company; that the dealer is not authorized to act as agent for the company in any respect, this, notwithstanding that as warehouseman or commission merchant the dealer is required by other provisions of the agreement to perform specific duties for the company; that all indebtedness of the dealer to the company shall be due and payable immediately after the dealer removes or sells his business, sustains fire loss, becomes insolvent or bankrupt, is sued or attached by process of law, or suspends payment of any indebtedness whatever, and that upon the termination of the agreement the dealer will deliver to the company, f.o.b. the railroad station within said city, all stock on hand free of any handling charges whatever. The dealer agrees to report to the company daily shipments of merchandise to and receipts of merchandise from, the customers of the company, neither of which last two things was done.

There was a separate latticed compartment in the store of the bankrupt where the stock should have been kept, under the agreement, but some of the articles were on display in other parts of the store. With the stock shipment came an ownership sign which was posted in the stockroom, but exactly when it was posted or how long it remained is not shown; evidently not long, for it clearly appears that on the date the receiver was appointed another similar one was written by hand and posted, reading: 'Tires and Tubes in this stock are the property of the Samson Tire and Rubber Company.'


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