Allied Van Lines, Inc. v. Small Business Administration, 81-1187

• Decision Date: 11 January 1982
• Docket Number: No. 81-1187,81-1187
• Parties: ALLIED VAN LINES, INC., Plaintiff-Appellant, v. SMALL BUSINESS ADMINISTRATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 751

667 F.2d 751

ALLIED VAN LINES, INC., Plaintiff-Appellant, v. SMALL BUSINESS ADMINISTRATION, Defendant-Appellee.

No. 81-1187.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 10, 1981.

Decided Jan. 11, 1982.

James L. Zemelman, argued, Morris A. Shenker, Jeffrey J. Shank, St. Louis, Mo., for plaintiff-appellant.

Robert D. Kingsland, U. S. Atty., Bruce D. White, argued, Asst. U. S. Atty., St. Louis, Mo., for defendant-appellee.

Before HENLEY and ARNOLD, Circuit Judges, and NICHOL, ^* Senior District Judge.

NICHOL, Senior District Judge.

Plaintiff Allied Van Lines, Inc. (Allied) brought this action against defendant Small Business Administration (SBA) claiming that Allied is entitled to.$257,069.75 in accounts receivable of Biltmoor Moving & Storage Company (Biltmoor) pursuant to an agency contract between Allied and Biltmoor. The cause was tried before the court sitting without a jury, the Honorable Roy W. Harper presiding. Allied appeals from the district court decision denying Allied the relief prayed for in its complaint. For reasons set out more fully herein, we affirm the district court decision.

The trial court's memorandum decision succinctly states the factual background of this case. On June 23, 1955, Allied and Biltmoor entered into a "Non-Carrier Agency Contract" which provided, inter alia, that Allied would employ Biltmoor to book, register, pack, crate, prepare for transportation, receive, load, transfer, unload, store, warehouse, and deliver shipments of household goods for and in behalf of Allied. The contract further provided that Allied was to bill and carry all shipments so booked and registered by Biltmoor pursuant to Allied's reasonable rules and regulations.

An "NAF/GAF" program was part of Allied's reasonable rules and regulations. Under the NAF/GAF program an agent, such as Biltmoor, would send invoices for services it rendered Allied to Allied for collection. After payment, Allied remitted between fourteen and eighty-nine percent of the collection to the agent. Agent participation in the program was voluntary until an agent developed financial difficulty. At that point participation in the program became compulsory. While participation was compulsory, Richard Kelly, the then President of Biltmoor, testified that an option existed whereby the agent could continue to bill directly the NAF/GAF account and pay a percentage penalty for non-compliance with the billing procedure. Roland Brown, Allied's Credit and Collection Manager, testified that a 2% penalty was imposed upon those agents who failed to comply with the NAF/GAF billing procedure. The only services subject to this billing program were those rendered by an agent for or on behalf of Allied, usually interstate or international transfers. On January 25, 1977, Allied placed Biltmoor on compulsory NAF/GAF participation.

On April 15, 1977, Biltmoor obtained a chattel mortgage of $150,000 from the First Missouri Bank and Trust Company of Creve Coeur, Missouri. The mortgage was secured by "(a)ll machinery and equipment, including automotive, furniture and fixtures now or hereafter acquired and the proceeds thereof. All inventory and accounts receivable now owned or hereafter acquired and the proceeds thereof." Finance statements were filed on April 19th and April 20th, 1977, with the St. Louis County Recorder's office and the Secretary of the State of Missouri, respectively. SBA is the successor to the bank's interest in that loan.

Allied and Biltmoor renewed their agency relation on January 18, 1979. The renewed contract placed an additional duty upon Biltmoor. Biltmoor was required, "in connection with the collection of charges on behalf of Allied, to hold such collections in trust for Allied until remitted by Biltmoor directly to Allied, or by processing through Biltmoor's regular account with Allied."

Between January 25, 1977, and April 5, 1977, Biltmoor accumulated a disputed amount of accounts receivable. On April 5, 1979, however, Biltmoor ceased doing business and assigned "inventory, fixture, office furniture, choses in action, equipment and cash" in trust to Milton Goldfarb for the use and benefit of creditors. Allegedly, Goldfarb had collected Biltmoor's receivables and had paid them to SBA. Allied has received nothing from Goldfarb. Simply stated, Allied and SBA are rival creditors of a now insolvent company.

Allied raised three issues for this Court's consideration on appeal. First, whether the district court erred when it failed to make a specific finding on the ownership of the accounts receivable generated by Biltmoor's performance under the agency contract. Second, whether the trial court's findings of fact and conclusions of law were erroneous in that Allied did own the accounts receivable generated by Biltmoor's performance. Third, whether the trial court's conclusions of law were erroneous because plaintiff was entitled to have the sale by Allied to Biltmoor of certain interior van equipment rescinded due to misrepresentations and to receive the proceeds from that sale.

Appellant first challenges the specificity of the district court's findings of fact. It is well established that the trial court does not need to make specific findings on all facts but only must formulate findings on the ultimate facts necessary to reach a decision. Falcon Equipment Corp. v. Courtesy Lincoln Mercury, 536 F.2d 806, 808 (8th Cir. 1979). See also Stanley v. Henderson, 597 F.2d 651, 654 (8th Cir. 1979); United States v. F.D. Rich Co., 439 F.2d 895, 899 (8th Cir. 1976); Skelly Oil Co. v. Hollowway, 171 F.2d 670, 673 (8th Cir. 1948). Findings are adequate if they afford a reviewing court "a clear understanding of the basis of the trial court's decision." Falcon Equipment Corp. v. Courtesy Lincoln Mercury, 536 F.2d at 808, citing Christensen v. Great Plains Gas Co., 418 F.2d...