Floyd v. C. Nelson Mfg. Co.

• Court: U.S. Court of Appeals — Fifth Circuit
• Writing for the Court: PER CURIAM
• Citation: Floyd v. C. Nelson Mfg. Co., 93 F.2d 857 (5th Cir. 1938)
• Decision Date: 21 January 1938
• Docket Number: No. 8564.,8564.
• Parties: FLOYD v. C. NELSON MFG. CO.

93 F.2d 857 (1938)

FLOYD v. C. NELSON MFG. CO.

No. 8564.

Circuit Court of Appeals, Fifth Circuit.

January 5, 1938.

Rehearing Denied January 21, 1938.

R. E. Wilbourn, of Meridian, Miss., for appellant.

Geo. B. Neville and Thomas Y. Minniece, both of Meridian, Miss., for appellee.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

This appeal is from an order granting appellee's reclamation petition as to certain ice cream cabinets and accessories, which the bankrupt held under two title retention contracts, each executed and acknowledged by J. O. Motley, president and general manager, and each filed for record.

The referee thought the description in the title contracts insufficient, the acknowledgments to them defective, that because thereof their recordation did not visit the bankrupt's creditors with notice, and that the property sought to be reclaimed must therefore, under section 3352 of the Mississippi Code of 1930, be treated as to the trustee and creditors, as the property of the bankrupt.

The District Judge disagreed with these conclusions. He thought the description sufficient under our decision in Liquid Carbonic Corporation v. Phillips, 5 Cir., 68 F. 2d 515, 516. He thought the acknowledgments, though informal, sufficient within the general rule of substantial compliance prevailing as to corporate acknowledgments.

We agree with the District Judge. And first, as to the description. Attached to each title retention contract was a complete list of equipment sold under it, identified by motor and compressor numbers. Appellant refers to this listing as hieroglyphics, and therefore insufficient as description. Hieroglyphics in the ancient sense they certainly are not, for there is nothing sacred or peculiar to ancient peoples in the characters and numbers used. Hieroglyphics in the sense of secret and enigmatical or unintelligible signs they are not, to those who deal in such machines, any more than motor and engine numbers by which automobiles are described are to those who deal in automobiles, or field notes in terms of varas, are in Texas, where measurements are made in varas.

In the Liquid Carbonic Case supra, we undertook to review the Mississippi decisions construing these statutes. We found them in accord with the rule of reason generally prevailing, that a description is sufficient if it "mentions some fact or circumstance connected with the property which will serve to distinguish it from all other property of the same kind * * some other mark, which, when proved to exist, would separate and distinguish it from other property." Kelly v. Reid, 57 Miss. 89, 91.

Appellant cites and relies on two Mississippi decisions published since our decision was written, Garmon v. Fitzgerald, 168 Miss. 532, 151 So. 726; National Foods, Inc., v. Friedrich, 173 Miss. 717, 163 So. 126, 127.

We find nothing in either of these decisions in conflict with what we have written. Apparently the Mississippi Supreme Court does not regard them as in conflict. In the Garmon Case, there was no identifying mark whatever to separate and distinguish this property from any other of like kind. In the National Foods Case, there was only a number unidentified and unexplained. The Supreme Court in that case said: "Without the number of the display case the description of it undoubtedly would not be sufficient. * * * And the number does not make it so unless it separates the case from all other cases of like kind."

Here the cabinets in question are certainly marked off from all other cabinets by motor and compressor numbers. If anything, the identifying description in this case is more definite than it was in the Liquid Carbonic Case.

As to the acknowledgments, little need be said. That, to the second of the contracts, was precisely formal in its recitals. It omitted nothing either of form or of substance. That, to the first, while informal, was, we think, under the general rule prevailing as to such acknowledgments, sufficient to entitle it to record. 1 C.J. 817; 1 C.J. 850; Note to 29 A.L.R. 919; 72 A.L.R. 1290; Griffis v. Martin Oil Co., 127 Miss. 606, 90 So. 324; Bank of Dillon v. Murchison, 4 Cir., 213 F. 147.

The purpose of the Mississippi sign statute, like that of the Virginia Traders Act, Code Va.1887, § 2877, is to defeat secret liens. In Hodge v. Turner, 96 Va. 624, 32 S.E. 291, at page 294, the court said: "The purpose of the legislation * * * is to preclude the assertion of secret claims of ownership against creditors of him who has conducted the business, possessed the property, and appeared to be its owner."

The statute under consideration here should be given effect, it has uniformly been given effect to accomplish this purpose. It should not be tortured into a strained construction to defeat honest transactions entered into in accordance with upright business practices.

We think the District Judge fairly and reasonably construed and applied the statute. We approve his judgment. It is affirmed.

HOLMES, Circuit Judge (dissenting).

This appeal is from a judgment of the District Court reversing an order of the referee in bankruptcy denying a petition by appellee for reclamation of certain ice cream cabinets, in the possession of the bankrupt on the date of adjudication, which had been sold to the bankrupt under alleged title-retention contracts.

On the hearing before the referee, appellee based its claim upon two recorded contracts which recited that appellant was directed to deliver or ship on the terms specified "the following equipment:

                            Serial    Compressor     Motor
                  "Quantity description     Number       No.        Number
                    *     *     *     *     *     *     *     *     *
                

"See Attached List of Description of Equipment and Numbers."

The space in the form for the description of the property was left blank, but attached to one of the instruments was the following:

"4 PD4 4 Hole Portables. Complete with 1/3 H. P. Units. Compressor J7104, Motor 16169 Serial 17917. Compressor J6775, Motor 16200 Serial K8055. Compressor J3640, Motor 16091 Serial 18013. Compressor J7136, Motor 16170 Serial 18033 2 SD6 6 Hole Standards; complete with 1/3 H. T. Units. Compressor J3789, Motor 16149 Serial 18033. Compressor J3661, Motor 16146 Serial 18066."

A similar list was attached to the other contract; the difference being in the numbers and quantity of the property bought.

Appellant resisted the reclamation petition, alleging that the bankrupt was a trader, and that the property had been used and acquired in its business as a trader, and was therefore liable for its debts under the Mississippi Sign statute. Section 3352, Miss. Code of 1930.

On the hearing, appellee introduced a witness who qualified as an expert in the ice cream business. He testified that the letters and numerals used in the contract were the trade-names used by appellee for its products, and that the particular property involved could be identified thereby. This testimony was objected to and excluded by the referee, but was incorporated in the record on review. This testimony being excluded, the referee held the description insufficient and denied the petition. On the strength of the testimony, the District Court held the description to be adequate, and set aside the order of the referee.

Since the determination of this matter requires the interpretation of a Mississippi statute and involves the application of a rule of property, the decisions of the Supreme Court of Mississippi are controlling. Hines Trustees v. Martin, 5 Cir., 296 F. 442, affirmed 268 U.S. 458, 45 S.Ct. 543, 546, 69 L.Ed. 1050. This rule is so strong that in the just cited case the Supreme Court of the United States said: "To avoid the uncertainty and injustice which result from the discordant elements of a substantial right which is protected in one set of courts and denied in the other, with no superior to decide which is right' (Brine v. Insurance Company, 96 U.S. 627, 24 L. Ed. 858), this court has not hesitated, when there has been a conflict of decision between it and the state courts affecting a rule of property within the state, to overrule its own decisions and to follow the state decisions once it has become evident that they have established a `rule of property' as the settled law of the state. Green v. Lessee of Neal, 6 Pet. 291, 8 L.Ed. 402; Suydam v. Williamson, supra 24 How. 427, 16 L.Ed. 742; Fairfield v. County of Gallatin, 100 U.S. 47, 25 L.Ed. 544; Roberts v. Lewis, 153 U.S. 367, 376, 14 S.Ct. 945, 38 L.Ed. 747, and see Bauserman v. Blunt, supra 147 U.S. 647, 13 S.Ct. 466, 37 L.Ed. 316, overruling a decision of the Circuit Court antedating a conflicting decision of the state court. We are therefore constrained in the present case to accept the view of the state courts as announced by them without inquiring, as an original proposition, into the justice and sufficiency of the rule which we follow."

If the contract of purchase is sufficient to confer on appellee the rights of a chattel...