People's Nat. Bank v. Mulholland

• Decision Date: 13 September 1917
• Citation: 228 Mass. 152,117 N.E. 46
• Parties: PEOPLE'S NAT. BANK v. MULHOLLAND et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

228 Mass. 152

117 N.E. 46

PEOPLE'S NAT. BANK

v.MULHOLLAND et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Sept. 13, 1917.

Appeal from Superior Court, Suffolk County; Marcus Morton, Judge.

Bill by the People's National Bank against Eliza B. Mulholland and Ellen T. Coughlin, administratrix of the estate of the late Cornelius J. Coughlin, to recover an alleged balance due on a note and to enforce a lien on moneys and leather in the possession of the defendant administratrix by reason of an alleged trust receipt upon skins and hides given to secure the note. From a decree for plaintiff, the defendant administratrix appeals. Modified and affirmed.

Walter J. Cusick, of Boston, for appellant Coughlin.

Lee M. Friedman and Swift, Friedman & Atherton, all of Boston, for appellee.

RUGG, C. J.

It was decided when this case was here at an earlier stage, in 224 Mass. 448, 113 N. E. 365, that there was no finding by the master warranting an inference that the plaintiff purchased the hides from the foreign seller, Kaufman, on behalf of E. F. Mulholland & Co., hereafter called the firm, now represented by the defendants, and that it took title to itself as security for its advancement in making such purchase, and received the bill of lading and draft as agent for Kaufman, the original seller. Thereafter, the Kaufman, the original seller. superior court to the master for determination of the facts as to the purchase of the hides from the foreign owner, Kaufman, and the vesting of the title therein, and the exact relation of the plaintiff to the purchase, the bill of lading and the draft.

The interlocutory decree recommitting the case to the master for this purpose was proper. The first trial before the master had proceeded upon a footing respecting the plaintiff's title, which, in the light of facts now revealed, might have wrought injustice. The right of the plaintiff was not disclosed by the earlier report. It was within the power of the superior court under these circumstances, after rescript, to order a further hearing upon this point. Day v. Mills, 213 Mass. 585, 100 N. E. 1113.

[2] The supplemental report of the master plainly shows that the plaintiff purchased the hides in its own name and interest for the ultimate use of the firm, directly from the foreign seller, and paid for them. It therefore had the legal title to the hides and rightly dealt with them as owner in its relations with the firm, and was not a mortgagee or pledgee. The trust receipt which was employed by the plaintiff in its transaction with the firm is a well known instrument of commerce whereby the banker advancing the money on an importation takes title directly to himself, and as owner delivers the goods to the dealer in whose behalf he is acting secondarily and to whom the title ultimately is to go when the primary right of the banker has been satisfied, the title remaining in the banker until price is paid to him. The validity of such a trust receipt has been upheld in numerous of our decisions, most of which are collected in People's Nat. Bank v. Mulholland, 224 Mass. at page 451, 113 N. E. 365;Moors v. Drury, 186 Mass. 424, 71 N. E. 810;Commercial Nat. Bank v. Canal-Louisiana Bank & Trust Co., 239 U. S. 524, 36 Sup. Ct. 194, 60 L. Ed. 417;Century Throwing Co. v. Muller, 197 Fed. 252, 116 C. C. A. 614;In re Cattus, 183 Fed. 733, 106 C. C. A. 171, 181;In re Coe, 183 Fed. 745, 106 C. C. A. 181.

[3][4] The plaintiff delivered the possession of the ninety-two bales of hides in question to the firm under a trust receipt with a sufficient description of them and with stipulations that the hides should be held ‘in trust’ for the plaintiff and as its ‘property, with liberty to sell the same for their [its] account or to manufacture or remanufacture the same without cost or expense to them [it], and we also agree to keep said goods and the manufactured product and proceeds thereof * * * separate and capable of identification as their property,’ with further provisions to the effect that the plaintiff might at any time cancel the trust and repossess itself of the hides, raw or as manufactured product.

The relation between the bank and the firm growing out of the trust receipt was fiduciary and the latter was bound to the obligations flowing from that relation.

The firm received these 92 bales of hides and for its own convenience designated them as ‘lot No. 73.’ Some of these hides were sold and others were destroyed by fire. These drop out of the case. The others were sent to tanners to be tenned and in course of manufacture were commingled with three other much smaller lots of hides referred to as lots 58, 60 and 72, which, to quote the words of the master's report, ‘were held by the firm under trust receipts to secure notes which had been given by the firm to the plaintiff each of the notes and trust receipts having been in the same form as the note and trust receipt for lot 73 and each of the notes, except that given for lot 73, have been paid; that of the several lots of leather so mixed, which were thereafterwards known as lots 1 to 8, a part was delivered to the A. J. Foster Company to be sold on account for the firm of E. F. Mulholland & Co., and a part was retained or disposed of by E. F. Mulholland & Co.; that in lots 1 to 8 the proportion which lot 73 bore to the other lots with which it was mixed was about 90 per cent. of lot 73 to 10 per cent. of all of the other lots; that the skins contained in lots 58, 60 and 72 were, while in the raw state, of a higher grade than any of those contained in lot 73, but there was no evidence what grade of manufactured skins resulted from the tanning of either or all of the lots; that it is impossible to more definitely determine what part of lot 73 was delivered to the A. J. Foster Company, or what part was retained or disposed of by E. F. Mulholland & Co.’ The sum of $2,241.22 received from sales of the mixed lot of leather made by the A. J. Foster Company is now in a special bank deposit, and the sum of $997.59 received from sales made by the Mulholland firm from the mixed lot of leather is a part of a general deposit to the credit of that firm, and a certain quantity of the mixed lot of leather...