Following
is the opinion of the referee:
To the
Hon. H. C. Niles, District Judge:
During
the administration of the above matter the F. A. Ames
Company, a creditor of the bankrupt, filed on January 30
1909, its petition as follows:
'Now
comes the F. A. Ames Company, a corporation duly chartered
organized, and existing, and respectfully represents: That
heretofore it made and entered into that certain contract
made Exhibit A hereto, with said Agnew, whereby it ships to
said Agnew those certain vehicles described in Exhibit B
hereto annexed and made a part of as fully as if copied
herein. That in and by said Exhibit A it was then and there
contracted and agreed: 'It is expressly understood and
agreed that all goods on hand and proceeds of all sales of
goods received under this contract; also all goods
hereinafter shipped to the maker of this contract, whether
the proceeds are in notes, cash, or book accounts, are to
be held as collateral security in trust, and for the
benefit of and subject to the order of the F. A. Ames
Company, until full cash settlement has been made of our
obligations due to the said F. A. ames Company. The title
to and ownership of all goods shipped under this contract
shall remain vested in the F. A. Ames Company until the
price thereof shall have been paid; but nothing in this
clause shall be considered a release from making payments
as provided elsewhere in this contract. * * * It is further
agreed, in case of death or financial embarrassment of the
firm, or any member or individual making this contract, all
accounts or notes for goods bought under this contract
shall become immediately due and payable.' And your
petitioner shows that those certain goods listed in said
Exhibit B, hereunto annexed and made part hereof as fully
as if copied herein, are on hand with the trustee, and are
the property of your petitioner, and should be set aside.
Upon information and belief your petitioner avers that
there are certain notes, accounts, and cash received by
said Agnew which he holds in trust for this petitioner,
and, with reference thereto, this petitioner is not
advised, but prays discovery with reference to the same.
Your petitioner further avers that said Agnew upon December
30, 1908, made, executed, and delivered said Exhibit B,
hereunto annexed, whereby the terms and conditions
contained in said Exhibit A were ratified and confirmed,
and your petitioner charges that, in pursuance thereof, it
is entitled to the property herein described, or to the
proceeds thereof, and prays that it may be afforded the
relief herein grantable. Your petitioner further avers that
the purchase money of said goods is wholly unpaid, and that
your orator charges that said sale was made in the state of
Mississippi, and is subject to the laws thereof in that
behalf made and provided, and further respectfully
represents that in pursuance of the statute in that behalf
enacted that it is entitled to a lien for said purchase
money of each of said vehicles upon each of said vehicles
respectively, as shown by said Exhibit B hereto annexed.
Wherefore, premises considered, petitioner prays that said
matter may be considered by the court, and that said
vehicles be set aside to it, or its lien established, and
that the purchase money therefor be given, and that the
discovery herein prayed for be made, and for such other,
further, and general relief in equity and good conscience
as may seem meet and proper, and as in duty bound,'
etc.
(The
petition was sworn to by the treasurer of the claimant.)
Exhibit
A, referred to in the petition, is in the following words and
figures, to wit: 'The F. A. Ames Company, of Owensboro,
Kentucky, wholesale manufacturers of pleasure vehicles,
shipped to J. B. Agnew, shipping point,
Morton, Miss., when ship, Sept. 1st. Charge to . . . Rate . .
. . Order No. 3115; Salesman, R. L. Buckett; Dated: 6/15
1908. Terms: 30 days net, or the buyer has the option of
settling within 30 days from date of invoice by 1/3 60, 1/3
90, 1/3 120 days note or cash, less net per cent. f.o.b. cars
or boat, Owensboro, Ky. Credit O.K. (Here follows the order
in detail, as to number of vehicles, the description of same,
price, etc.) All conditions and agreements with salesmen must
be stipulated on this order; verbal contracts will not be
recognized. It is expressly understood and agreed that all
goods on hand and proceeds of all sales of goods received
under this contract; also all goods hereinafter shipped to
the maker of this contract, whether the proceeds are in
notes, cash or book accounts, are to be held as collateral
security in trust, and for the benefit of and subject to the
order of the F. A. Ames Company, until full cash settlement
has been made of our obligations due the said F. A. Ames
Company. The title to, and ownership of all goods shipped
under this contract shall remain vested in the F. A. Ames
Company until the price thereof shall have been paid in cash,
or until all notes given under this contract are paid; but
nothing in this clause shall be considered a release from
making payments as provided elsewhere in this contract. It is
further understood and agreed that notes taken by the F. A.
Ames Company in settlement are not accepted as payment but
only as evidence of indebtedness. We further agree that a
receipt from Transportation Company for goods delivered in
good order shall be a release to the F. A. Ames Company, and
agree to look to the Transportation Company for all losses
occasioned by rubbing, chafing, or other damages which may
occur to goods while in transit, or the non-delivery of any
goods receipted for. It is further agreed that in case of
death or financial embarrassment of the firm, or any member
or individual making this contract, all accounts or notes for
goods bought under this contract shall become immediately due
and payable. Accepted subject to the approval of the F. A.
Ames Company. (Signed) J. B. Agnew. All jobs will be shipped
just as specified above. Be sure specifications are correct
before signing.'
Exhibit
B, referred to in said petition, is in words and figures as
follows, to wit: 'Owensboro, Ky., Dec. 30th, 1908.
Received of the F. A. Ames Company the following vehicles of
their manufacture to be held by me as their property and sold
for their account. All goods are to be settled for when sold
by cash at the prices shown below or by customers' notes
indorsed by me which are to be turned over to them for the
full value of sales made, and when collected the excess over
prices named below are to be returned to me. The goods are to
be insured and stored by me without charge to them and sales
reported as soon as made. ' Here follows a detailed list
of vehicles.
The
evidence developed that the purchaser had the right to sell
the vehicles for any sum he desired over and above the amount
of the purchase price. There was no regular accounting
between vendor and vendee, but there were occasional
remittances in the usual course of business. At the date of
bankruptcy there were 10 vehicles on hand, which were taken
into possession by the trustee, and where they now are. The
petition above set forth was filed as indicated, and the
court, after considering the matter, denied the relief prayed
for by the F. A. Ames Company, and ordered the property sold.
Claimants filed their petition for review within the 10 days
in such cases, and the matter is now sent up for that
purpose.
It will
be seen by a reference to claimant's petition that it
claims a lien for the purchase money-- a vendor's lien--
upon the vehicles in controversy. Section 3079, Code Miss
1906, is as follows: 'The vendor of personal property
shall have a lien thereon for the purchase money while it
remains in the hands of the first purchaser, or of one
deriving title or possession through him with notice that the
purchase money was unpaid. ' Sections 3080 and 3081
provide for the method of enforcing this lien, which is by
suit, trial, and judgment. No action was taken by the
petitioner to fix his lien before the filing of the petition
in bankruptcy. Certainly the petitioner cannot after the
filing of the petition in bankruptcy enforce his lien for the
purchase money for the vehicles in controversy. So that the
petitioner must recover, if at all, in some other way. The
schedules of the bankrupt, properly sworn to, show that there
was no cash on hand, and the trustee in bankruptcy found none
to
take into his possession, nor was there any evidence, from an
examination of the bankrupt, that there were any notes,
accounts, or cash held in trust by the bankrupt for the
petitioner. On the contrary, the evidence disclosed that the
bankrupt intermingled these vehicles with his other stock in
trade, and that he sold and transferred them in the usual
course of business to purchasers thereof, and that he from
time to time made remittances to the petitioner on account,
the same as to any other creditors. There was no evidence of
any accounting, or a demand for the same, between the
petitioner and the bankrupt, neither was there any evidence
that any demand had been made, nor has to this day by the
petitioner upon the trustee in bankruptcy, for the possession
of any notes, accounts, or cash claimed in the said petition
to be a trust fund by reason of the sale of the said vehicles
by Agnew. It is the law of Mississippi that where such funds
are commingled with the other funds and assets of the debtor,
that the trust is lost, and that the creditor cannot claim
any such funds as a trust fund, because of such a
commingling. Billingsley v. Pollock, 69 Miss. 759,
13 So. 828, 30 Am.St.Rep. 585; Shields v. Thomas, 71
Miss. 260, 14 So. 84, 42...
