Universal Road Machinery Co. v. Skinner

• Decision Date: 02 March 1927
• Court: Connecticut Supreme Court
• Parties: UNIVERSAL ROAD MACHINERY CO. v. SKINNER ET AL.

136 A. 468

105 Conn. 584

UNIVERSAL ROAD MACHINERY CO. v. SKINNER ET AL.

Supreme Court of Errors of Connecticut.

March 2, 1927

Appeal from Superior Court, Fairfield County; Alfred C. Baldwin Judge.

Replevin by the Universal Road Machinery Company against James D. Skinner and others to recover coal machinery. Judgment for defendants, and plaintiff appeals. No error.

Louis Weinstein, of New Haven, for appellant.

Arthur M. Comley, of Bridgeport, for appellees.

Argued before WHEELER, C.J., and CURTIS, MALTBIE, HAINES, and HINMAN, JJ.

HAINES, J.

On July 24, 1924, the plaintiff, a New York corporation, and Karn Terminal Coal Company organized under the laws of Connecticut and located at Bridgeport, entered into a contract for the purchase by the latter from the former of certain coal machinery. The terms of the contract were contained in a certain writing conceded to be in legal effect a conditional bill of sale. It appears from the record that the purchase price was to be $2,396. Of the amount, $200 was paid when the order for the machinery was given, $200 was to be paid upon the arrival of the machinery at its destination and the balance in three notes of two months each with interest at 6 per cent. The only payment in fact by the vendee was $200, made at the time of the order. The writing referred to was not acknowledged before competent authority, and was not recorded until March 9, 1925. Prior to February 3, 1925, the vendee became insolvent, and its property, including the machinery in question, was under attachment by some of the creditors, and it was threatened with bankruptcy. This latter result being imminent, it was sought to avoid it by assigning all the assets of the company to a creditors' committee for the purpose of liquidation for the benefit of the creditors. To accomplish this, certain creditors were to release their claims against the company and forego certain rentals. In pursuance of this arrangement, the company, on February 3, 1925, assigned and gave possession of all its assets, including this coal machinery, to a creditors' committee consisting of three persons. All the creditors of the company, with the exception of the plaintiff, were parties to this arrangement. Attachments were released, and the committee proceeded to liquidate the assets for the benefit of all the creditors. The company was in default upon the written agreement referred to, and on March 17, 1925, the plaintiff made demand upon it for the balance due under the written agreement or the return of the machinery. The creditors' committee had been in possession of the machinery since February 3, 1925, and refused to pay the balance due the plaintiff or to return the machinery. Thereupon the plaintiff obtained possession of the machinery by this action of replevin, at which time its value was $800.

Our statute governing conditional sales of personal property, conditioned that the title thereto shall remain in the vendor after delivery, requires that the contract shall be in writing, describing the property and all conditions of the sale, and acknowledged before some competent authority, and filed within a reasonable time in the town clerk's office in the town of the vendee's residence. General Statutes, § 4744, as amended by the Public Acts of 1921, ch. 116, § 1.

It is further provided that all conditional sales, not made in conformity to the above requirements, shall be held to be absolute sales, except as between the vendor and the vendee and their personal representatives, and shall be liable to be taken by attachment and execution for the debts of the vendee as any other property not exempted by law. General Statutes, § 4746.

The only question presented by the appeal is whether the assignment to the creditors' committee for the benefit of creditors of the Karn Terminal Company makes that committee " the personal representative" of the Karn Terminal Company; thus preserving the title of the plaintiff within the meaning and under the provisions of General Statutes, § 4746, above quoted.

As between the plaintiff and the Karn Terminal Company, the title to this machinery was in the plaintiff. As between the plaintiff and the creditors of the Karn Terminal Company, it is equally clear that the title was in the Karn Terminal Company, and subject to attachment by the creditors of that company and to sale upon execution for the satisfaction of their claims. This necessarily results from the fact that the written contract between the plaintiff and the Karn Terminal Company did not comply with the terms of our statute.

Our statute was passed to avoid the evils resulting from conditional sales of personal property with retention of title in the vendor and without notice to creditors and others dealing with the vendee, and it should receive a construction which effects that purpose. While such sales are good as between vendor and vendee, they are, as between the vendee and such innocent parties, absolute sales. In re Wilcox & Howe Co., 70 Conn. 220, 230, 39 A. 163. The sales agreement between the plaintiff and the terminal company being unrecorded, this coal machinery was liable to be sequestered by creditors of the terminal company, by attachment and execution, or by a receiver or assignee in bankruptcy. Had such receiver or assignee been appointed, he would have been the representative of such creditors and not of the terminal company and would have taken the property with the same rights as creditors could have taken it. Craig & Co., Limited, v. Uncas Paperboard Co., 104 Conn. 559, 567, 568, 133 A. 673; Newtown Savings Bank v. Lawrence, 71 Conn. 358, 41 A. 1054, 42 A. 225; In re Wilcox & Howe Co., supra; New Haven Wire Co. Cases, 57 Conn. 352, 18 A. 266, 5 L.R.A. 300; Greene v. Sprague Mfg. Co., 52 Conn. 330; Shaw v. Smith, 48 Conn. 306, 40 Am.Rep. 170; Taylor v. Atwood, 47 Conn. 498.

The case at bar presents a somewhat different situation, because the assignment made for the benefit of creditors was not made under any provision of law. In the case of a receiver, a trustee in bankruptcy, or a trustee in insolvency, whether the result of a voluntary or an involuntary act of the debtor, the property is put in custodia...