Hatley Mfg. Co. v. Smith

• Decision Date: 07 October 1929
• Docket Number: 27882
• Court: Mississippi Supreme Court
• Parties: HATLEY MFG. CO. v. SMITH

123 So. 887

154 Miss. 846

HATLEY MFG. CO. v. SMITH

No. 27882

Supreme Court of Mississippi

October 7, 1929

Division A

APPEAL from circuit court of Bolivar county, Second district, HON WM. A. ALCORN, JR., Judge.

Action by the Hatley Manufacturing Company against Mamie W. Smith. From a judgment for defendant, plaintiff appeals. Affirmed.

Affirmed.

Smith &amp Millsaps, of Cleveland, L. C. Hallam, of Jackson, and J. C. Roberts, of Cleveland, for appellant.

Where the agent of an undisclosed principal is pursued to judgment by the creditor after knowledge of the facts and after the principal has been disclosed, this is an election which binds the creditor, but nothing short of this will suffice.

Murphy v. Hutchinson, 93 Miss. 643, 48 So. 178; Rives v. McNeil, 127 Miss. 839, 90 So. 595; Quitman County v. Miller, 150 Miss. 841, 117 So. 262.

Plaintiff has the right to join an agent and his undisclosed principal in an action upon a simple contract with the agent.

Mussenden v. Raiffe, 131 Ill.App. 456; Pittsburgh Plate Glass Co. v. Roquemore (Tex.), 88 S.W. 449; Sessions v. Block, 40 Mo.App. 569; Young v. Garlington (S. C.), 9 S.E. 960; Tew v. Wolfsohn, 38 Misc. 54; Mattlage v. Poole, 15 Hun. 558.

But in such case the plaintiff, before taking judgment, will be required to elect which party the judgment shall be against.

Gray v. Uren (Minn.), 123 N.W. 295.

A plea by a debtor of payment by a stranger is a ratification of the act of the stranger as the debtor's agent.

Neely v. Jones (W. Va.), 37 Am. Rep. 794.

The appellant was not bound by the receivership proceeding in any other sense than that the appointment of the receiver was, as a matter of law, notice to all persons having contractual relations with it.

Breed v. Glassgow Investment Co., 92 F. 760; Buchanan v. Hicks (Ark.), 136 S.W. 177.

Receivership proceedings are binding on creditors not actually parties only so far as the assets of the person or corporation whose assets are placed in the hands of a receiver are concerned.

Howarth v. Angle (N. Y.), 47 L. R. A. 725, 729.

A judgment in rem creates no personal liability, but operates only on the property which is the subject of the litigation.

Quarl v. Abbett (Ind.), 1 N.E. 476, 52 Am. Rep. 662; English v. Jenks (Mont.), 169 P. 727.

If the assets distributed in a receivership proceeding are insufficient to pay a creditor his entire debt, the debtor is not thereby released from liability for the balance of the debt. The balance of the debt remains a subsisting obligation for which a personal action may be brought. A decree in rem does not defeat a contractural right to seek a remedy in personam for the balance due if the remedy in rem has been exhausted.

Toby v. Brown, 11 Ark. 308; Everett v. U.S. 277 F. 256; Whitney v. Tibbol, 99 F. 686; The Cerro Gorda, 54 F. 391; Carey v. The Kitty, 5 F. Cas. No. 2,401.

A decree appointing a receiver and an order finally discharging a receiver and ordering distribution are judgment quasi in rem.

Howarth v. Angle (N. Y.), 47 L. R. A. 725; Rogers v. Citizens Bank (Md.), 49 A. 843; Freeman v. Alderson, 30 L.Ed. 372.

Agency need not be proved by direct evidence, but may be proved by circumstances.

Lindquist v. Dickson (Minn.), 107 N.W. 958.

Shands, Elmore & Causey, of Cleveland, for appellee.

Where there is but one contract and one debtor and a creditor elects to claim one party as debtor and gains an advantage by so doing, he cannot afterwards change his position.

Erwing v. Hayward, 195 P. 970; Coles v. McKenna, 76 A. 344; Kirkendall v. Weatherly, 109 N.W. 757; Hughey v. Truitt, 196 S.W. 1065; De Laval P. Co. v. United, etc., 224 P. 766; Doyle Dry Goods Co. v. Britt, 235 P. 1077; Swafford v. Owen, 133 P. 193; Natalbany Lbr. Co. v. Countiss, 134 Miss. 511, 99 So. 262; Codd v. Parker, 55 A. 623; Goodale v. Page, 75 S.E. 700; Continental Oil Co. v. American, etc., 228 P. 503; Kimble Motor Co. v. Androw, 215 P. 340; Warringer v. Fant, 114 Miss. 174, 74 So. 822; Bierce v. Hutchinson, 51 L.Ed. 828; Murphy v. Hutchinson, 93 Miss. 643, 48 So. 178; Rives v. McNeil, 90 So. 595.

Receivership proceedings properly admitted in evidence.

Bessler v. Bank, 140 Miss. 537, 160 So. 445; Helm v. Ins. Co., 8 S. & M. 197; Routh case, 12 S. & M. 161; Wesling case, 38 Miss. 101; Ry. Co. v. Moye, 39 Miss. 374; Miss., etc., v. Smith, 69 Miss. 299; Wagner case, 85 Miss. 422; 1 Wigmore, sec. 18.

Receivership proceedings cannot be attacked collaterally.

14 A. C. J., page 1012; Natalbany Lbr. Co. v. Countiss, 134 Miss. 511, 99 So. 262; Spilman v. Jackson, 27 Grat. (68 Va.) 33; Warringer v. Fant, supra; Black on Bankruptcy (3 Ed.), secs. 182 and 425; Federal Reserve Bank v. Wall, 138 Miss. 204, 103 So. 5; Cocks v. Simmons, 57 Miss. 183; Cotton v. Harlan, 124 Miss. 696, 87 So. 152.

OPINION

MCGOWEN, J.

On October 15, 1927, the Hatley Manufacturing Company, the appellant, filed its declaration in the circuit court of Bolivar county, asking to recover from C. R. Smith Company and Mrs. Mamie W. Smith the amount of an itemized open account, the total of which was nine hundred eighty-four dollars and fifty cents and interest. In due time both defendants appeared and pleaded the general issue. Mrs. Mamie W. Smith filed a notice, under the general issue, that she would undertake to prove that the goods sued for were sold to the C. R. Smith Company, and not to Mamie W. Smith; that she paid the C. R. Smith Company for said goods, and that they were resold to her by the said C. R. Smith Company. She filed a further notice that the C. R. Smith Company had been placed in the hands of a receiver before the filing of the suit, and that the effects of the corporation were, at the time the suit was filed, in the custody of the chancery court of Bolivar county; that the Harley Manufacturing Company was a party to said suit and had decreed this claim as owing to it by the C. R. Smith Company; that dividends amounting to three hundred forty-nine dollars and eighty-eight cents had been made on the claim by the receiver to the appellant under direction of the chancery court; that the appellant accepted said sums; and that there was never joint liability of said Mamie W. Smith and C. R. Smith Company to appellant. The C. R. Smith Company pleaded a misjoinder, and also set up a pending receivership.

When the case came on for trial at the November, 1928, term, it appears that the court permitted an amendment of the declaration by dismissing the suit as to C. R. Smith Company, and amending the declaration, so as to sue for six hundred eighty-eight dollars and two cents, and alleging that appellant was entitled to a judgment against Mrs. Mamie W. Smith for said amount. This was done by erasures and interlineations, although the final judgment of the court shows that the court permitted the declaration to be amended, and that a nonsuit was taken as to C. R. Smith Company. After all the proof was taken, the court below granted the appellee, Mrs. Mamie W. Smith, a peremptory instruction, and the Harley Manufacturing Company prosecutes its appeal here, assigning the giving of the peremptory instruction as error.

Hatley Manufacturing Company, of Memphis, Tenn., dealt in awnings. C. R. Smith Company was a mercantile corporation doing business at Cleveland, Miss., C. R. Smith was president of the C. R. Smith Company and its active manager and agent. He was husband of the appellee, and both he and C. R. Smith Company acted as the agent of Mrs. Smith in the collection of rentals on her property, and in repair of same. Both Mrs. Smith and the C. R. Smith Company owned business houses in the city of Cleveland. At the time of this transaction the C. R. Smith Company owed Mrs. Mamie W. Smith a large amount, part of which is evidenced by notes in a substantial sum, several thousand dollars is shown on the books of the C. R. Smith Company as being collections made by the C. R. Smith Company for Mrs. Mamie W. Smith.

On September 16, 1926, Hatley Manufacturing Company sold awnings to the amount of four hundred eighteen dollars to C. R. Smith Company, and on November 4, 1926, sold to the same company five hundred sixty-six dollars and fifty cents worth of awning. It appears from the evidence in the case that the C. R. Smith Company owned three store buildings and that Mrs. Mamie W. Smith owned five store buildings, and that the total sale price of the awnings placed upon the buildings owned by the appellee, Mrs. Smith, amounted to seven hundred thirty-three dollars and seventy cents, and the total value of the awnings placed upon the buildings owned by the C. R. Smith Company amounted to two hundred fifty dollars and eighty cents. The awnings were delivered and put up on the buildings by the appellant, invoice being rendered. The C. R. Smith Company charged the proper amount to Mrs. Mamie W. Smith and credited the Hatley Manufacturing Company; likewise it charged the proper amount to itself and entered a like credit to the Hatley Manufacturing Company. At the time of the sale of the awnings Hatley did not know that they were to be placed upon buildings owned by Mrs. Mamie W. Smith, or that C. R. Smith was the general agent in transacting business for Mrs. Mamie W. Smith.

On April 23, 1927, on petition of creditors files in the chancery court, a receiver was appointed for the C. R. Smith Company, and the estate of the C. R. Smith Company was administered by the receiver under directions of the court. Claims presented and claims admitted to be due by the C. R Smith Company were adjudicated to be proper claims against the estate and entitled to share pro rata therein. Among other claims was the claim of the Hatley Manufacturing Company for the amount of the invoice sued for herein. This adjudication was made final,...