Chemical Co. of Canton v. Johnson

• Citation: 3 S.E. 723,98 N.C. 123
• Parties: CHEMICAL CO. v. JOHNSON and others.
• Decision Date: 31 October 1887
• Court: United States State Supreme Court of North Carolina

3 S.E. 723

98 N.C. 123

CHEMICAL CO. v. JOHNSON and others.

Supreme Court of North Carolina

October 31, 1887

Appeal from superior court, Wake county; J. H. MERRIMON, Judge.

Haywood & Haywood and Strong, Gray & Stamps, for plaintiff.

C. M Busbee and A. Jones, for defendant.

SMITH C.J.

The plaintiff, a company formed under the laws of Maryland, and engaged in the manufacture and sale of an agricultural fertilizer known as "Baker's Standard Guano," and the defendant Johnson, entered into the following agreement: "BALTIMORE, January 17, 1885.

"We have this day sold to Mr. D. T. Johnson, of Raleigh, N. C the following brands of fertilizers, on terms and conditions named below, viz.: 40 tons of Baker's Standard Guano, at $29.50 per ton, 2,000 pounds, or as much additional as may be mutually satisfactory. We will deliver the above goods, free on board, at Raleigh, N. C., in bags. Settlement to be made by notes payable November 15 and December 15, 1885, at Franklin Bank, Baltimore. On May first next, or sooner, if possible, D. T. Johnson agrees to deliver to us or our order notes of all purchasers to whom sales of these goods may have been made, whose notes shall have been taken, and a list of all accounts for the sale of such goods where they have been sold on open account and no notes shall have been taken, and for gross amount of the sales of the same, to be held by us as collateral security for payment of his notes as stated above, and all of the above-mentioned goods, as well as the proceeds therefrom, are to be held in trust by him for the payment of his notes to us. And all proceeds of said goods, as collected, must be first applied to the payment of his notes due us, whether the same have matured or not. D. T. Johnson to pay for all goods shipped on his orders to amount mentioned in contract, and we to be at no expense whatever after delivery of goods as agreed. The collaterals will be returned in time for collection. In sending same to the company, place nominal value of $25 on each package. This contract subject to suspension by fire or unavoidable accidents at sellers' works or storage warehouses. The above contract subject to approval of home office. Relative to this contract, no agreement or provision outside of those embodied in the contract is recognized or confirmed, unless it is a matter of arrangement signed in writing.

Signed in duplicate "CHEMICAL CO. OF CANTON.

"C G. HEIM.

I accept the terms and conditions of above contract.

Signed D. T. JOHNSON."

This instrument was not proved and registered.

The guano was delivered in pursuance of the contract, and has been sold by Johnson for notes, and upon open accounts, to various purchasers. The latter, finding himself embarrassed with debts, on March 10, 1885, executed a deed to the defendant Charles M. Busbee, wherein he assigns, among other property owned by him, the claims he then held against different persons who had bought portions of the fertilizer, in trust to secure various creditors in the order of the priorities therein set out. The present action is to assert a claim to this fund, and to compel the trustee to account for and pay over such of them or of their proceeds as passed into his hands. Upon the trial, the above facts being in proof, the court intimated that the action could not be maintained because the contract between the plaintiff and Johnson had not been registered. In deference thereto the plaintiff suffered a non suit and appealed.

The only question before us is as to the character and construction of the agreement, and whether it is an instrument required to be registered, and inoperative and void unless and until so registered, against creditors and purchasers. Code, § 1254. We are unable to concur in the opinion of the court that the contract is within the purview of the enactment cited, or of the mischief which were remedied by it, and the amendatory act which extends it to conditional sales of personal property. Section 1275. In form it is largely executory in its provisions, requiring the vendor to take and hold all securities received upon sales of the guano, for payment of the original purchase money. This trust, at least as between the parties, attaches to this substituted fund, and it can only be conveyed (except in certain cases) in the same plight to another. There are present none of the features and essential elements...