Pontiac Buggy Co. v. Skinner

• Decision Date: 30 January 1908
• Citation: Pontiac Buggy Co. v. Skinner, 158 F. 858 (N.D. N.Y. 1908)
• Parties: PONTIAC BUGGY CO. v. SKINNER.
• Court: U.S. District Court — Northern District of New York

158 F. 858

PONTIAC BUGGY CO. v. SKINNER.

United States District Court, N.D. New York.

January 30, 1908

Lewis Watkins & Titus, for petitioner.

Coville & Moore, for respondent.

RAYDistrict Judge.

The petitioner, Pontiac Buggy Company, is a corporation of the state of Michigan.The Camden Wagon & Sleigh Company, a New York company, did business at Camden in the state of New York and November 8, 1907, a petition in bankruptcy was filed against it, and it has been adjudicated a bankrupt accordingly.The petitioner was engaged in manufacturing and selling buggies, etc., and the bankrupt was engaged in selling buggies and other things.This was known to the Pontiac Company.Zenas E. Britton was the sales agent of the petitioner in the state of New York, and on the 8th day of July, 1907, he solicited and took from the now bankrupt company a written order, the material parts of which read as follows 'Vehicle Contract and Order.

'Pontiac Buggy Company, Pontiac, Michigan.

'Dated at Camden, N.Y. 7-8, 1907.

'Gentlemen Please enter for shipment to Camden Wagon and Sleigh Co. on or about Sept. 1, the following order, subject to the terms and conditions of this contract and at the prices named, and under your catalog warrantee.Terms, payable 3 months from date of sale until Dec. 1st or 5 per cent. for cash 30 days from date of sale until Dec. 1st for which we will give our notes upon receipt of invoice or when requested, in settlement, with privilege of discounting at time agreed upon, drawn with exchange on New York or Chicago, and interest at highest legal rate after maturity.All goods not sold Dec. 1st date billApril 1st, 1908.'

Then follows description and quantity of goods with 'List price per Job' in last column.Then--

'Less freight, same deducted from invoice.

'Agreed Conditions.

'The above prices and terms apply to all accepted orders whether by mail or otherwise during the season ending Sept. 1st next.All goods delivered f.o.b. cars at Pontiac, Mich. * * * The title to and ownership of all goods shipped under this contract shall remain vested in the Pontiac Buggy Co. until the price thereof shall have been paid in cash and until all notes given under this contract are paid in cash, but nothing in this clause shall be considered a release from making settlements and payments as provided elsewhere in this contract.Notes taken by the Pontiac Buggy Co. in settlement are not accepted as payment, but only as evidence of indebtedness.All goods on hand and proceeds of all sales of goods shipped under this contract, on this order and on all subsequent orders, whether the proceeds are in notes, cash or book accounts, shall be held as collateral security, in trust and for the benefit of, and subject to the order of the Pontiac Buggy Co., until all obligations arising under this contract to the Pontiac Buggy Co. shall have been paid in cash.In case of death or financial embarrassment of the firm, or any member or individual making this contract, all accounts or notes for goods shipped under this contract shall become immediately due and payable.All goods on hand under this contract are to be kept insured by the maker of this contract for the protection and benefit of the Pontiac Buggy Co., so far as their interests may appear.Failing to keep insured in case of fire loss, he(maker) assumes all liability or loss.This order is accepted subject to unavoidable delays, such as fire, strikes, blockades or any other cause beyond control of the Pontiac Buggy Co., and they will not be held liable for any damages that may arise from such causes.

'Transportation companies shall be looked to for all losses occasioned by rubbing, chafing, or other damages which may occur to goods in transit, or the failure to deliver any goods shipped when receipted for in good condition.All claims for shortages must be made within five days from receipt of goods.No agreements, conditions or stipulations, verbal or otherwise save those mentioned herein, shall be recognized.This order is not subject to cancellation except at the option of the Pontiac Buggy Co. and payment of 10% of amount of same as liquidated damages.

'This and all other orders during the term above mentioned accepted subject to the approval of the Pontiac Buggy Co.'

Same was duly signed by the Camden Company and by Britton, the sales agent of the Pontiac Company, in duplicate, and one was delivered to such agent who forwarded same to the Pontiac Company, which company received it on the morning of July 10, 1907, and on the morning of July 11th the Pontiac Buggy Company wrote the Camden Wagon & Sleigh Company accepting and approving the order as follows: 'Camden Wagon & Sleigh Co., Camden, N.Y.

July 11/07.

'Gentlemen: We acknowledge your order sent in by our Mr. Britton for a car load of vehicles for shipment on or about Sept. 1st.Although it is a little irregular for us to accept an order at this season of the year that continues into next season, inasmuch as we have not heretofore done business with you we will accept the terms, and are mailing you under separate cover our catalogue and Eastern price list, and hope to merit your business in the future.

'Truly yours,

Pontiac Buggy Co.'

The other order duly signed was retained by the Camden Company.

None of the buggies or runabouts described in the order were manufactured or on hand in stock at the time, but were manufactured thereafter by said Pontiac Company to fill the order, and were shipped August 30, 1907, and received a few days later by the now bankrupt company.The total number ordered, made, and delivered was 20, and the 'List price per Job' amounted to $762.Five of the vehicles were unpacked and sold, 6 were unpacked and exhibited for sale, and the remaining 9 were unpacked when the petition in bankruptcy was filed.Hence 15 are in the hands of the receiver.No payment was made on account of these vehicles or any of them.The Pontiac Company has duly demanded all the vehicles unsold, and delivery or surrender has been refused.As the facts are undisputed no question is raised as to the power and jurisdiction of this court to determine the title to the property unsold.This order was never filed as a chattel mortgage or otherwise.The question is where was the title to the property when the petition was filed?Was this a sale and delivery of the property with an attempt to create a lien thereon and on the proceeds, or was it a delivery thereof to the Camden Company to be sold by it for the Pontiac Company, and remit the proceeds less a commission or profit, or was it a conditional sale, title to revert on certain conditions?Was this a conditional sale or in law a sale absolute?

It is conceded that the sale to the Camden Wagon & Sleigh Company was to enable that company in turn to sell the property to its customers in due course of business, and give full and complete title thereto.No agency was created or attempted to be created.The Camden Company could sell at will at any price and on any terms it saw fit, and give absolute title.It was expected that it would.This applies to all the property mentioned in the order, not to the part sold by the Camden Company alone.It was not a sale of the property to the Camden Company with the understanding or agreement that it was to hold or use the same.But it is expressly stipulated, 'All goods on hand and proceeds of all sales of goods shipped under this contract, on this order and on all subsequent orders, whether the proceeds are in notes, cash, or book accounts, shall be held as collateral security, in trust and for the benefit of and subject to the order of the Pontiac Buggy Company, until all obligations arising under this contract to the Pontiac Buggy Co. shall have been paid in cash. ' This was not an agreement that the proceeds of sales made by the Camden Company were to take the place of the property and be remitted to or handed over to the Pontiac Company, but rather, a recognition of the fact that the Camden Company was the owner thereof, and would hold them for the Pontiac Company as collateral security for the debt of the Camden Company to the Pontiac Company.Then comes the provision that in case of death or financial embarrassment, etc., the whole account for the property shall become immediately due and payable.Also, the Camden Company is to keep the property insured in its own name for the benefit of the Pontiac Company as its interest may appear.These clauses are quite inconsistent with the claim that title remained in the Pontiac Company.

In Re Garcewich,115 F. 87-89, 53 C.C.A. 510, 512, the Circuit Court of Appeals, Second Circuit, stated the law of conditional sales very clearly and forcibly as follows:

'It is the settled law of this state that personal property may be sold and delivered under an agreement for the payment of the price at a future day, and the title by express agreement remain in the vendor until the payment of the purchase price.In such a case the payment is strictly a condition precedent, and until the performance the title does not vest in the buyer.It is one of the exceptional cases in which the law tolerates the separation of the apparent from the real ownership of chattels when the honesty of the transaction is made to appear.But when the purpose for which the possession of the property is delivered is inconsistent with the continued ownership of the vendor, the transaction will be presumed fraudulent as against purchasers and creditors.

'The transaction will be deemed merely colorable, and the title to have been vested absolutely in the buyer.Ludden v. Hazen,31 Barb.(N.Y.)650;Frank v. Batten,49 Hun, 91, 1 N.Y.Supp. 705;Bonesteel v. Flack,41 Barb.(N.Y.)435.When the property is

...