Capitol Motor Corp. v. Harry M. Lasker Inc

• Decision Date: 12 June 1924
• Citation: 123 S.E. 376
• Parties: CAPITOL MOTOR CORPORATION et al. v. HARRY M. LASKER, Inc.
• Court: Virginia Supreme Court

123 S.E. 376

CAPITOL MOTOR CORPORATION et al.

v.HARRY M. LASKER, Inc.

Supreme Court of Appeals of Virginia.

June 12, 1924.

Error to Law and Equity Court of City of Richmond.

Action by Harry M. Lasker, Inc., against the Capitol Motor Corporation, in which George B. White, trustee, was permitted to become a party defendant. Judgment for plaintiff, and defendants bring error. Affirmed in part, reversed in part, and rendered.

D. M. White and A. J. Ellis, both of Richmond, for plaintiffs in error.

McGuire, Riely & Eggleston, of Richmond, for defendant in error.

CAMPBELL, J. This is an action of detinue, instituted by the defendant in error (hereinafter called plaintiff) against plaintiff in error (hereinafter called defendant), seeking to recover of defendant eight speci fied automobiles, which plaintiff claimed it was entitled to by virtue of a written contract, and eight trust receipts, each for a specified car.

The plaintiff is a New York corporation engaged in the business of supplying credit to dealers in automobiles.

The defendant was engaged in the business of buying and selling automobiles, wholesale and retail, at Richmond, Va.

On the 1st day of July, 1921, the plaintiff and defendant entered into an agreement which provided among other things, the following:

"Agreement made this 1st day of July, 1921, by and between Harry M. Lasker, Inc., hereinafter called the 'purchaser, ' and the Capitol Motor Corporation, Richmond, Va., hereinafter called the 'dealer, ' witnesseth:

"The parties hereto, in consideration of the mutual promises herein, and of the sum of one dollar ($1.00), receipt whereof is hereby acknowledged, do hereby mutually agree as follows:

"1. Upon the request of the dealer, the purchaser agrees for a period of one year from date hereof, unless the agreement be sooner terminated by the purchaser pursuant to the provisions of paragraphs 5 and 6 of this agreement, to purchase from the factory or from a distributor, if delivery can be obtained either from the factory or from a regular distributor, new and unused Premier and Briscoe automobiles, or any of them, and to pay therefor the full factory charge; and the dealer agrees upon delivery of each car to pay the purchaser, for an option to purchase said cars, a sum equal to 20 per cent. of the standard factory price, plus freight and war tax, plus all extra charges added to the standard factory prices by reason of special order, but the total amount spent in purchase of such cars by the purchaser and outstanding at any time shall not exceed ($15,000) fifteen thousand dollars above the payment made to the purchaser by the dealer; and the purchaser further agrees to place such cars on consignment with the dealer, each under a separate trust receipt setting forth the terms and conditions upon which such cars shall be held, which trust receipt shall be in the form hereto annexed.

"2. The terms and conditions of such trust receipts, and each of them, shall be deemed and shall become a part of this contract. In case such cars shall be sold in accordance with the terms of such trust receipts and the proceeds of such sale turned over to the purchaser, or in case the option herein given to the dealer shall be exercised, then the purchaser agrees to purchase other cars upon the terms and conditions set forth above in place of the cars so sold, and to consign them to the dealer upon the same terms and conditions upon which the cars thus sold had been consigned, but the total amount spent in the purchase of such cars and outstanding at one time shall not, exceed the amount above set forth.

"3. The purchaser further agrees to give the dealer an option to purchase said cars, so consigned, or any of them, in accordance with the terms of an option to be executed at the time of the purchase of the cars, and its con-signment by the purchaser to the dealer. Said option is to be in the form hereto annexed, and the price which the dealer is to pay for purchase of the cars, in case he wishes to avail himself of the option, is to be the sum paid by the purchaser, less the amount paid for the option by the dealer, as set forth in paragraph 1.

"4. The dealer agrees to pay to the purchaser for the option above mentioned and the obligations hereby assumed by the purchaser, in addition to the payment called for in paragraph 1, the sum of two hundred and fifty-five dollars ($255.00) monthly, during the period from July 1, 1921, to June 1, 1922, and he will make and deliver to the purchaser his promissory notes to secure such monthly payments.

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"6. In the event of the filing of a petition in bankruptcy by or against the dealer, or assignment by the dealer for benefit of creditors, or his insolvency, or inability to continue business for any reason whatsoever, or the appointment of a receiver, or the filing of judgment or the issuance of execution or distress warrant against the dealer or his property, or upon default or violation by the dealer of any of the terms and conditions of this agreement, or upon the termination of same, or in case a petition in bankruptcy shall be filed against the factory, or the factory shall file a voluntary petition in bankruptcy, or make an assignment for the benefit of creditors, or shall for any reason whatsoever be unable to continue business, or a receiver of such factory shall be appointed, then, in any one or more of such events, all cars delivered hereunder and not disposed of, as herein provided, shall be immediately redelivered to the purchaser without cost or expense to and without payment whatsoever by the purchaser.

"7. Upon the expiration of this agreement, the obligation of the purchaser to make any further purchases of cars shall cease; but all cars consigned to the dealer prior to such time shall be held by the dealer for the purchaser subject to the terms and conditions of this agreement and of the trust receipt."

In addition to this agreement, the defendant executed a "trust receipt" upon each car received by it from the manufacturer. Neither the agreement nor trust receipts were recorded. This arrangement between plaintiff and defendant remained in force until November, 1921, when the plaintiff instituted its action of detinue to recover the eight automobiles, the subject of this controversy, alleging a breach of the contract by defendant.

On the 4th day of November, 1921, armed with an order of seizure, the sheriff went to the place of business of defendant and repossessed six of the automobiles alleged to be the property of the plaintiff.

On November 7, 1921, defendant executed a deed of assignment, conveying the eight automobiles claimed by plaintiff to George B. White, trustee.

On the 10th day of November, the other two cars were seized by the sheriff and turned over along with the other six to the plaintiff, who gave bond as provided by law.

On November 16, 1921, George B. White, trustee filed his bill, in the law and equity court against plaintiff and defendant, praying, among other things, that the court deliver to him the eight automobiles and further praying that the court advise and instruct him as to His rights as trustee.

In disposing of this cause the trial court entered the following decree:

"This day came the complainant and tendered and read to the court his bill, verified by affidavit, and moved the court for an injunction and receiver in accordance with the prayer thereof; the defendant Harry M. Lasker, Inc., likewise appearing by counsel.

"Whereupon the court is of opinion that the said defendant holds possession of the automobiles mentioned in the bill by virtue of a legal process issued under section 5797 of the Code of Virginia, and that the rights of all parties having claim to said automobiles are protected by law, and that no such irreparable damages are claimed as authorizes a court of equity to interfere with possession validly acquired as allowed by statute. The injunction and receiver pendente lite as applied for are therefore denied. The plaintiff trustee should inspect the bond given by the plaintiff in the detinue action and satisfy himself as to its validity and sufficiency. The plaintiff trustee may intervene in such action under section 5800 of the Code, and then or in any event the court will direct this plaintiff to be made party defendant in the common-law, action, and protect his rights in the final judgment therein as provided by section 5801 of the Code."

Following the direction of the court, the trustee filed his petition and became a party defendant in the detinue action, as provided by law.

On the 27th day of April, 1922, upon the issue joined, the case was tried by a jury, which rendered a...