Simons v. Northeastern Finance Corp.

• Decision Date: 27 May 1930
• Parties: SIMONS v. NORTHEASTERN FINANCE CORPORATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

271 Mass. 285

171 N.E. 643

SIMONS

v.NORTHEASTERN FINANCE CORPORATION.

Supreme Judicial Court of Massachusetts, Suffolk.

May 27, 1930.

Appeal from Municipal Court of Boston, Appellate Division; Bennett, Judge.

Action by Samuel Simons against the Northeastern Finance Corporation. There was a finding for defendant in municipal court, the Appellate Division dismissed the report, and the plaintiff appeals.

Order dismissing report reversed, and case remanded to municipal court with directions.

H. J. Barrett and John A. Lyons, both of Boston, for appellant.

K. C. Tiffin and G. D. Shorey, both of Boston, for appellee.

CARROLL, J.

The plaintiff was in possession of an automobile which he had purchased under a conditional sale fron the Boulevard Motor Sales Company (hereinafter called the Boulevard company). The automobile was taken from him by the defendant. The action is in tort for conversion. In the Municipal Court there was a finding for the defendant. The Appellate Division dismissed the report. The plaintiff appealed.

There was evidence tending to show that the Boulevard company through its representatives interviewed one Shorey, who was president of the defendant and of the New England Velie Company, concerning the purchase of four used motor vehicles belonging to the Velie company. The Boulevard company wanted the cars to sell on its own account and desired to make a cash payment and give notes for the balance. Shorey did not agree to this, but arranged the plan now to be narrated: The price of $1,700 was agreed on; thereupon the Velie company sold the motor vehicles to the defendant by bill of sale. The Velie company drew a draft on the Boulevard company for $1,000, payable in two instalments on time. The Boulevard company paid the Velie company $600 in cash. Either the defendant or the Velie company already had in its possession $100 belonging to the Boulevard company. The draft, the cash payment and $100 belonging to the Boulevard company made up the total of $1,700, the price of the motor vehicles agreed upon between the defendant and the Boulevard company. The cars were then delivered to the Boulevard company by the Velie company. The defendant took from the Boulevard company an instrument in writing, which in the record is called a ‘trust receipt.’ It is signed by the Boulevard company and acknowledges the receipt of the motor vehicles from the Velie company as agent of or ‘acting for’ the defendant; and it contains in addition to the description of the four cars and other provisions not here material the following: ‘For valuable consideration, Undersigned agrees to hold said motor vehicles in trust as the property of Northeastern Finance Corporation, and to return all or any of them to Northeastern Finance Corporation upon demand. Northeastern Finance Corporation at any time may examine said motor vehicles and the books or records of Undersigned with reference thereto, and may repossess all or any of said motor vehicles without notice or demand, and for such purpose it and its representatives may enter any premises at any time without legal process. Undersigned shall not lend, rent, mortgage, pledge, encumber, operate, use, demonstrate or sell said motor vehicles, except upon a written order or orders to release the same, but may immediately drive them direct to Undersigned's place of storage. Undersigned may sell all or any of said motor vehicles, upon receiving an order or orders duly signed by the Northeastern Finance Corporation, for cash for not less than the sum mentioned in the order or orders to release them from trust, and immediately after any sale shall deliver the proceeds thereof to Northeastern Finance Corporation, and until delivered shall hold such proceeds in trust for Northeastern Finance Corporation, separate from the funds of Undersigned. * * * The acceptance by Undersigned of a time draft in connection herewith or the negotiation or assignment of such draft * * * shall not divest Northeastern Finance Corporation of title to such motor vehicles.’

The automobiles were thereafter taken by the Boulevard company to its place of business. The car in question was placed in the window of its showroom and sold to the plaintiff. The Boulevard company defaulted on its payments and the defendant took possession of the vehicle. The plaintiff testified that he saw the automobile in the showroom window of the Boulevard company; that it was sold to him by that company, part of the purchase price being paid in cash ‘and the balance by note under a conditional sales contract.’ Shorety testified that he knew the Boulevard company was in the automobile business, ‘that the purpose in taking the cars in question was to place them in their showroom, in hope of securing purchasers, and to eventually sell the cars.’

The instrument in writing between the Boulevard company and the defendant designated by the name ‘trust receipt,’ and so called in the record, was in no sense a ‘trust receipt.’ That term is applied to an instrument in writing whereby a banker, having advanced money for the purchase of imported merchandise and having taken title in his own name and retaining such title, delivers possession of the merchandise to the importer upon an...