In re Wright & Weissinger
| Decision Date | 09 December 1921 |
| Citation | 277 F. 514 |
| Court | U.S. District Court — Northern District of Mississippi |
| Parties | In re WRIGHT & WEISSINGER. |
Marcus L. Kaufman, of Rosedale, Miss., Douglas E. Beams, of Shaw Miss., and A. M. Maxson, of Clarksdale, Miss., for trustee and creditors.
Chambers & Trenholm, of Jackson, Miss., for Brown Shoe Co.
On January 27, 1921, the Brown Shoe Company, of St. Louis, Mo filed suit in the circuit court of Bolivar county, Miss against Wright & Weissinger, merchants doing business in said county, for the balance due on the purchase price of certain shoes, which were purchased for the purpose, with the knowledge and consent of the seller, of being resold at retail in the mercantile business of the buyers. In said suit the plaintiff claimed a lien on the shoes for the purchase money under a state statute. In accordance with the procedure provided in such cases, a writ of seizure was issued commanding the sheriff to seize the property and deal with it as in the case of an attachment for debt. Under this writ the sheriff seized 278 pairs of shoes and had them in his possession at the time of the adjudication in bankruptcy.
On February 2, 1921, Wright & Weissinger filed a voluntary petition in bankruptcy, and were duly adjudicated bankrupts. Thereafter a trustee was duly elected, and claimed title to said shoes, free from any lien for purchase money. Under an order of the bankruptcy court the trustee took the shoes out of the possession of the sheriff, and the same were sold by the trustee under an agreement between the parties that the proceeds thereof should stand in lieu of the shoes. The Brown Shoe Company filed its duly verified claim, and petitioned the court for priority over the general creditors as to the said proceeds because of its alleged lien for purchase money.
An issue was made up and trial had before the referee, and the referee held that the seller had no lien for the purchase money, because the goods were sold to retail dealers for the purpose of resale with the knowledge and consent of the seller, and that the Mississippi purchase-money lien statute did not apply, but that, even if it did apply, the lien was cut off in this case by the Mississippi sign statute.
The case comes before me on petition to review the decision of the referee. I shall not discuss the applicability of the sign statute (section 4784, Code Miss. 1906), because I agree with the referee that the seller in this case never obtained any lien on the shoes for the purchase money which is superior to the claim of the trustee in bankruptcy. The question for decision is not affected by the prior proceedings in the state court, as the lien asserted is one created by statute, and not by the suit in the state court. That suit having been brought and the attachment levied within four months of the filing of the petition in bankruptcy, the property affected was 'wholly discharged and released' by the adjudication in bankruptcy, and passed to the trustee as a part of the estate of the bankrupt under subdivision (f) of section 67 of the Bankruptcy Act (Comp. St. Sec. 9651).
The statute relied on is section 3079, Code Miss. 1906 (section 2436 of Hemingway's Code), and reads as follows:
'Purchase Money-- Lien on Personal Property.-- 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.'
It must be conceded, if the property in question were fixtures or other articles not intended for resale, that the statute would give the seller a lien for the purchase money not affected by the Bankruptcy Act. Norris v. Trenholm, 209 F. 827, 126 C.C.A. 551, 31 Am.Bankr.Rep. 353. The sole difference between this case and Norris v. Trenholm, supra, consists in the fact that the shoes here constituted part of a stock of merchandise held for sale, and were bought with the knowledge and consent of the seller for the purpose of resale in the mercantile business.
In a contest between the buyer and the seller, in a suit to enforce a lien for the purchase money, this fact might not be sufficient to defeat the lien. It is not necessary here to decide that question, because this is a contest between the vendor and the trustee in bankruptcy, whose rights and remedies are superior in some respects to those of the bankrupt. The trustee took, not only the title of the bankrupt to all property which prior to the filing of the petition he could by any means have transferred, or which might have been levied upon and sold under judicial process against him, but also the rights of a creditor holding a lien by legal or equitable proceedings thereon. Section 47a2, as amended, and section 70 of the Bankruptcy Act (Comp. St. Secs. 9631, 9654); Bailey, Trustee, v. Baker Ice Machine Co., 239 U.S. 268-275, 36 Sup.Ct. 50, 60 L.Ed. 275; Gillaspy v. International Harvester Co., 109 Miss. 136, 67 So. 904.
Disregarding the proceedings in the state court, in so far as the levy and attachment affected the property in controversy, it is clear that the shoes in question were property which prior to the filing of the petition the bankrupt 'could by any means have transferred. ' This is true, because they were sold for the purpose of being transferred-- that is, sold-- to customers. If further light be needed as to the meaning of the word 'transfer,' there is a declaration in Bankruptcy Act July 1, 1898, 30 Stat. 544, 545, Sec. 1, cl. 25 (Comp. St. Sec. 9585), that the word 'transfer' shall be taken to include every mode of disposing of or parting with property. It is clear, therefore, that as Wright & Weissinger had the implied consent of the Brown Shoe Company to resell these shoes, and their customers would have taken the shoes free from any lien, the trustee in bankruptcy, under said section 70, was vested by operation of law with title to them as 'property which prior to the filing of the petition he could by any means have transferred. ' As, however, under said section 47a2, the trustee has all the rights of a creditor holding a lien by legal or equitable proceedings, I shall now turn to a discussion of whether or not the claimants have a statutory lien for purchase money superior to creditors so constituted.
Preliminarily it might be well to observe that a deed of trust or other contractual lien on the shoes in question would be held fraudulent and void as against creditors, and therefore as against the trustee in bankruptcy. Farmers' Bank v. Douglass, 11 Smedes & M. 469; Summers & Brannin v. Roos, 42 Miss. 749, 2 Am.Rep. 653; Harmon v. Hoskins, 56 Miss. 142; Joseph v. Levi & Co., 58 Miss. 843; Britton & Mason v. Criswell, 63 Miss. 394; Tallman & Co. v. Tuttle Bros., 65 Miss. 492, 4 So. 553; Bank v. Caperton, 74 Miss. 857, 22 So. 60; Acme Lumber Co. v. Hoyt, 71 Miss. 106, 14 So. 464; Bank v. Goodbar, 73 Miss. 566, 19 So. 204; Belknap v. Lyell, 89 Miss. 197, 42 So. 799; Newton Oil Co. v. Carr, 97...
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