Columbus Buggy Co. v. Turley & Parker

• Citation: 19 So. 232,73 Miss. 529
• Parties: COLUMBUS BUGGY CO. v. TURLEY & PARKER
• Decision Date: 24 February 1896
• Court: Mississippi Supreme Court

19 So. 232

73 Miss. 529

COLUMBUS BUGGY CO. v. TURLEY & PARKER

Supreme Court of Mississippi

February 24, 1896

October 1895

FROM the circuit court of Adams county HON. W. P. CASSEDY, Judge.

Replevin by appellant against appellees to recover certain vehicles of which it claimed ownership. The contract upon which the plaintiff relied as showing a reservation of title in itself was in the form of an order for goods, as follows:

"NATCHEZ MISS., April 7, 1894.

"Columbus Buggy Co., Columbus, Ohio:

"Please ship to J. M. Smitha, the following goods at once, at the prices herein specified, and for which we agree to give our note, on receipt of invoice, payable as per terms stated below. This order not subject to countermand. . . .

"All goods on hand, and the proceeds of all sales of goods received under this contract, whether the proceeds are in cash, notes or book accounts, we, as agents of Columbus Buggy Co., agree to hold the same in trust for the benefit of and subject to the order of Columbus Buggy Co. until we have paid in full, in cash, all our obligations of whatsoever nature now due or yet to become due to the said Columbus Buggy Co. And the sale and disposition of all goods received under this contract it is hereby mutually agreed shall be made and the proceeds thereof held by us as the agents of said Columbus Buggy Co. The title to and ownership of all goods received or shipped under this contract shall remain vested in Columbus Buggy Co., but nothing in this clause to release us from making settlement and payment of our obligations as herein provided. We accept the same terms on all further orders we may send you during the year. No agreement or understanding with agents will be recognized unless noted in the order. The conditions of guarantee published in your catalogue are hereby acknowledged as binding with reference to the order.

"(Subject to approval of home office.)

(Signed)

"J M. SMITHA."

The vehicles in controversy were a part of the goods received by Smitha on this order. The appellees claimed under a sale and delivery by Smitha in satisfaction of a debt he owed them. It was not questioned that they were wholly without notice of appellant's claim, nor was the adequacy of the consideration supporting the sale brought in question. All other facts pertinent to the controlling questions involved appear in the opinion. The trial in the lower court was without a jury, and resulted in a judgment for defendant. Plaintiff's motion for a new trial having been overruled this appeal was prosecuted.

Affirmed.

Martin & Conner, for the appellant.

1. By the terms of the contract between appellant and Smitha, the latter became its agent or trustee, and could not defeat its rights as owner of the property in his hands by a sale of it in payment of his own debt, whether the purchaser was ignorant of appellant's rights or not. That is a very different thing from a sale in due course of business. Smith's Mer. Law., p. 178 (3d ed.); Evans on Principal and Agent, § 3; Tiedeman on Sales, § 317; Warner v. Martin, 1 How. (U.S.), 209; Am. Dig., 1893, p. 4450, §§ 368, 369.

2. In all sales of personalty, where the prepayment of the price is made a condition precedent, no title passes to the vendee. Especially is this the case where title is expressly reserved to the vendor. Benj. on Sales, § 320; Tiedeman on Sales, §§ 85, 87, 206, 325; 21 Am. & Eng. Enc. L., p. 485; Am. Dig., 1887, p. 1154, §§ 209, 210, 212; Fosdick v. Schall, 99 U.S. 235; Fosdick v. Car Co., Ib., 256; Warner v. Martin, supra; 49 Miss. 550; 53 Ib., 596; 56 Ib., 552; 68 Ib., 500; 70 Ib., 584. In such cases no title passes, and the vendor may follow the property into the hands of third persons who have acquired it without notice of his rights. In some of the states there are statutory requirements as to recording such conditional sales, and, in those states, relief has properly been denied to vendors against innocent persons, and this fact will explain an apparent conflict of authority on the point in question. See Benj. on Sales, § 320; Tiedeman on Sales, §§ 203, 317, 325; Am. & Eng. Enc. L., p. 485; Am. Dig., 1887, p. 1155, §§ 226, 233, 234, p. 1156, §§ 235, 242, 243, 244, 245; Am. Dig., 1893, p. 4450, §§ 368, 369; 11 How. (U.S.), 209; 53 Miss. 596; 54 Ib., 584; 56 Ib., 552; 68 Ib., 691; 70 Ib., 54, 584. In such cases of condition precedent, where the purchase price is payable in installments, and a portion of the same has been paid, the vendor may retake the property or otherwise assert his rights, without tendering back the money or consideration received. Duke v. Shackleford, 56 Miss. 552; Dederick v. Wolf, 68 Miss. 500; Tiedeman on Sales, § 325; Am. Dig., 1893, p. 4449.

3. Section 4234, code of 1892, does not apply to voluntary conveyances between debtor and creditor of property used or acquired by the debtor in his business. The appellees rely on Howe v. Kerr, 69 Miss. 311, in support of the view that Smitha could himself make the appropriation of the property used or acquired in the business conducted by him in the manner shown that under this statute his creditors might have had made by resorting to their legal remedy. In that case, however, the title to the goods had, to the knowledge of the vendees of the "active" partner, been vested in him absolutely, without condition of any kind, and there was nothing to indicate knowledge in such vendees of any change in the title so far as the "silent" partner was concerned, while here Smitha had never had title at all.

Except in so far as § 4234 may apply, appellants were secure in leaving the buggies with Smitha up to the limit of three years' possession by him. A record of their rights as against the world was necessary only beyond that limit. Then, if unnecessary within the three years, although a proper subject for record, what purpose would have been served by having the contract recorded? This court has decided that notice does not affect a creditor's asserting his rights. The point was raised in Gumbel v. Koon, 59 Miss. 266, and the court decided that notice cut no figure under § 1300, code of 1880 (§ 4234, code of 1892). In Wolf & Marks v. Kahn, 62 Miss. 814, the point was raised that there was record notice of the sale by a merchant, but he had allowed his son to remain at the place of business and continued in and about the place assisting in the management of the business, and the court held that creditors could not invoke the statute in spite of the recorded sale. Then, it would seem that "notice, " either actual or constructive, would have made no difference, and in no way could the appellant have been secured. The mere statement of this proposition is an answer to the contention of the appellee.

There can be no doubt as to what the rights of creditors really are under this statute. In a long list of cases where creditors were asserting their rights by attachment, execution or other process, the statute was applied, and the property "used or acquired" by the debtor was held liable for his debts. The creditors, however, were all seizing creditors, and the proceeding was in invitum. The debtor did nothing. In another class of cases, where the step taken was on the part of the debtor himself, voluntarily, with no other liability than to pay his debts, this court decided that the statute did not apply. In Dodds v. Pratt, 64 Miss. 123, it was held that an execution did not take precedence over a pre-existing trust deed on a stock of goods owned by a man doing business in his own name. In Gayden v. Tufts, 68 Miss. 691, the debtors--"traders"--assigned, and the conditional vendor recovered the property from the assignee in possession. In Kinney v. Paine, 68 Miss. 258, the point was made that creditors of an insolvent had bought his assets acquired in his business, and without notice, but the court decided in favor of the owner of a claim for the proceeds of a certain draft. In Tufts v. Stone, 70 Miss. 54, the conditional vendor recovered his property after the same had been conveyed to an assignee for creditors by a firm doing business with only "Martz Bros." appearing on their sign, and after a distress for rent had been levied on the property in the hands of the assignee by the landlord of the assignors on whose premises the property was situated. In Journey v. Priestly, 70 Miss. 584, the facts were Covington and Journey were partners in a livery stable business--"traders, " if Smitha was one. Journey sold his undivided one-third interest in the business and its assets to Billingslea for a part cash, taking a note for the balance, and reserving title in himself until payment. No record of the sale was made; Billingslea formed a partnership with Covington, under the firm name of Covington & Billingslea. Subsequently, Billingslea in turn sold his third interest to Priestly, who bought without notice of the claim of Journey, and thereupon the business was conducted by Covington and Priestly under the name of Covington & Priestly. The court recognized the right of Journey to retake his property, to assert his undivided third ownership in it, even against Priestly. We invite attention to this case especially.

Proby & Clinton, for the appellees.

1. One who receives goods from his debtor, in satisfaction of his debt and to pay him for the cotemporaneous assumption of other obligations of the debtor, is a bona fide purchaser. Keith v. Heffelfinger, 12 Neb., 497.

2. A bona fide purchaser of goods from an agent who has been authorized by his principal to sell, will acquire title thereto, although the agents held the goods under a contract by which title was reserved in the principal. Ezzard v Frick, 76 Ga. 512; Winchester Wagon Works Co. v. Carmen, 109 Ind. 31, s.c. 58 Am. Rep., 382. This was not a...