Wood Preserving Corporation v. Coney Grocery Co.
| Decision Date | 15 June 1936 |
| Docket Number | 32179 |
| Citation | 168 So. 864,176 Miss. 406 |
| Court | Mississippi Supreme Court |
| Parties | WOOD PRESERVING CORPORATION v. CONEY GROCERY Co. et al |
Suggestion Of Error Overruled September 21, 1936.
APPEAL from chancery court of Pike county HON. R. W. CUTRER Chancellor.
Suit by the Coney Grocery Company and others against the Mitchell Lumber & Tie Company, wherein the Wood Preserving Corporation intervened. From an adverse decree, the intervener appeals. Reversed and rendered and remanded, with directions.
Decree reversed and rendered, and cause remanded.
Flowers, Brown & Hester, of Jackson, Hugh V. Wall of Brookhaven, and J. N. Ogden, of Magnolia, for appellant.
We call attention to the Chancellor's failure to file a written statement of his findings of fact and conclusions of law thereon as required by chapter 252, Laws of 1934. He was urged by counsel to do this. This alone, we understand, is fatal error.
Bullard v. Citizens' Nat. Bank, 160 So. 280; Alexander v Hancock, 164 So. 772.
The transactions between the Mitchell Company and Ayer & Lord Tie Company created a pledge of the lumber to Ayer & Lord Tie Company and gave them a prior lien that was not affected by the attachments.
One fact in this case is outstanding and that is that the transactions between the Ayer & Lord Tie Company and Mitchell were had in entire good faith. This is not denied. There is not in the record any evidence whatsoever from which any other inference could be drawn.
All the lumber on Mitchell's yard and all the lumber that had been manufactured by him was covered by these
contracts of pledge. There was no other lumber. There is involved no question of identifying or separating the lumber covered by these contracts from other lumber, there was no other lumber.
We recognize that delivery and retention of possession of the property is necessary to constitute a valid pledge. The property was identified, measured and marked in the presence of both parties and then and there the writing was drawn up and the cash consideration paid. And generally speaking there are two or more classes or kinds of delivery, any one of which is sufficient to meet the requirements of a pledge, contract.
In the first place when the property pledged is small and can be picked up and carried away that course is followed. If the property is too big to carry away they examine it, identify it for their purposes, make their contract about it and further deal it as the nature of the property may suggest. There is no particular way to do it provided for in the law. The material elements in such an arrangement are that the parties agree upon the property, locate it, or otherwise identify it, make the contract about it and pass the consideration and act in good faith. If the pledgor and the pledgee agree upon the property and identify it and the pledgor agrees that it is delivered to the pledgee and the pledgee binds himself that he has accepted it and pays the consideration and the pledgee has possession and retains it then there is a good contract of pledge. And it is a good contract whether anybody else in the world knows about it or not. And there is no requirement that anybody be given notice that the pledge has been made. It is a matter between the parties to the contract.
Jones on Pledges (3 Ed.), page 48, sec. 34; First National Bank of Hartness case, 33 L. R. A. 408; Cartwright v. Phoenix, 7 Cal. 281; Chaffin v. Doub, 14 Cal. 384; Allen v. Smith, 10 Mass. 308.
The lien that the seller of personal property has does not need to be recorded. No notice to creditors has to be given. The debtor may have the property in his possession and ostensibly be the outright owner of it. There are numerous instances where the public has no information as to the location of the title or the existence of a lien.
Yale v. Taylor, 63 Miss. 598; Willis v. Memphis Co., 19 So. 101.
No case has been found in the books where a pledge contract, treated as valid and binding as between the parties, has been set aside at the instance of third parties. The question is whether there was a valid contract entered into by the parties. If it was binding upon them it must be recognized by everybody else. And here, as we have seen, the one party swears he made delivery and the other party swears he accepted delivery; and both swear that the pledgee retained control; and that they made hundreds of these contracts and performed them, carrying out the contract of pledge according to its terms.
Courts of equity do not condemn or even look with disfavor upon the man who undertakes to protect himself. The amount of money advanced by Ayer & Lord Tie Company was large. They undertook to protect themselves as they went along by taking over the lumber as they made advances on it. And under no circumstances can they come out of it without a loss larger than the claims of all other creditors combined.
Conrad v. Fisher, 37 Mo. A. 352, 8 L. R. A. 147; 49 C. J. 895, sec. 1; Douglas v. Peoples Bank of Kentucky, 86 Ky. 176, 9 A. S. R. 276; Casey v. Cavaroc, 96 U.S. 467, 24 L.Ed. 779; Casey v. National Park Bank, 96 U.S. 492, 24 L.Ed. 789; Norton v. Baxter, 4 L. R. A. (N. S.) 305; Bank v. Caperton, 74 Miss. 857, 22 So. 60, 60 A. S. R. 540; Mattison v. Judd, 59 Miss. 99; Jones on Pledges (3rd), sec. 5; Hilliker v. Kuhn, 71 Cal. 214; Wilkinson v. Misner, 138 S.W. 931, 158 Mo.App. 551.
The sign statute does not have the effect to derange the priority of liens between creditors of a common debtor.
Campbell Paint & Varnish Co. v. Hall, 131 Miss. 671, 95 So. 641; Kinney v. Paine, 68 Miss. 258, 8 So. 747; Dodds v. Pratt, 64 Miss. 123, 8 So. 167; Frank v. Robinson, 65 Miss. 162, 3 So. 253; Payne Hardware Co. v. Harvester Co., 110 Miss. 671, 95 So. 641; Yale v. Manufacturing Co., 63 Miss. 598; Lyons & Co. case, 38 So. 371; 299 F. 789; 293 F. 105 (1); 30 F.2d 979 (4); 2 F.2d 29 (4).
The fact that the pledged property was sold in the name of the Mitchell Company but under our supervision and control and only with our consent and approval, does not detract from the pledge. Such an arrangement is not uncommon when dealing with pledged property.
49 C. J., Pledges, sec. 75; Casey v. Cararac, 24 L.Ed. 779; Macomber v. Parker, 14 Pick. (Mass.), 497; Jones on Pledges (3 Ed.), sec. 33, page 41.
Strictly speaking, there is no such thing as an attachment lien. Liens are not created by attachment.
In a proper sense of the word an attachment does not create a lien, but merely places in the custody of the law property which has been seized under it.
All that could be and that has been done under these attachments was to seize the property and have the lower court declare that the amount sued for was just, correct, due and owing. No special lien of any sort has been or could be created. Appellees have only gained the right (by attachment) to share first in the proceeds of the attached property as against creditors occupying a similar class, to-wit: common creditors.
We are not required to do any more in order to entitle ourselves to a priority over appellees to the pledged property than if they had never attached. In so far as this issue is concerned, the fact that they attached or did not attach makes not one particle of a difference.
In fact the attaching creditor gets his prior right against only such interest in the property attached as the defendant debtor had.
Harkness case, 33 L. R. A. 412.
A pledge or contract for a pledge, ineffectual for want of delivery, may be rendered valid by a subsequent delivery, even as against an intermediate creditor at large of the pledgor.
Jones on Pledges (3 Ed.), pages 50 and 51.
A pledgee does not lose his lien by permitting the pledgor to have possession of the property for a special and limited purpose, and not merely for his own use and benefit.
Jewett v. Warren, 12 Mass. 300, 7 Am. Dec. 74; Smith Lbr. Co. v. Adams, 100 Miss. 30, 56 So. 265; Haskins v. Fidelity Bank, 159 P. 1198; Jones on Collateral Securities and Pledges (3 Ed.), sec. 44.
A party might be fooled and misled to his hurt who purchased a stack of lumber from the man who appeared to him to be in possession of it and to be the owner of it and who claimed to be the owner of it. But even in that case the purchaser could not hold the property as against the real owner or the pledgee, if there had been a valid pledge. But the instant case has in it no peculiar facts or circumstances that would render inequitable the application of the rules as to pledges. No one of the attaching creditors purchased any of the lumber; none of them knew there was any lumber; none of them had seen it. They are simple contract general creditors. And the Ayer & Lord Tie Company was a creditor. It had a lien on the lumber and the other creditors did not have a lien.
The court asks this question, "First, does the evidence disclose that for the two weeks hereinbefore mentioned the planing mill and the lumber here in question were in the possession and control of the appellants?"
We submit to the court that this question must necessarily be answered in the affirmative, that is, that from August 27th to the time the attachments were filed, this appellant was in the open, public possession and control of the plant and yard at Fernwood and was actively dealing with the property that was attached, having it planed, loaded on cars and shipped to purchasers, and that its acts in this regard were done by it as pledgee. It asserted no other rights in the property. Of course it could not have used Mitchell's trucks and planing mill without the latter's consent. The latter naturally consented because he had an equity in the lumber and it was to his interest that the...
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Crump v. Hill
...the Mississippi sign statute is without application and that plaintiff was without right to recover. In Wood Preserving Co. v. Coney Grocery Co. et al., 176 Miss. 406, 168 So. 864, it is declared that Section 3352, the invoked statute, has no application to an assignment or pledge which has......
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Swetnam v. Edmund Wright Ginsberg Corporation
...this far, it might be argued that a pledgee both had to take possession and comply with the act. Compare Wood Preserving Corp. v. Coney Grocery Corp., 176 Miss. 406, 168 So. 864, where the court held otherwise under a similar statute, yet assumed for the sake of argument only that complianc......