Opinion
No. 35264.
February 22, 1943. Suggestion of Error Overruled April 5, 1943.
1. SALES.
Where seller sold automobile trailers on credit to dealer, seller had a lien on the trailers for the purchase money while they remained in the hands of the dealer or one deriving title or possession through dealer with notice that the purchase money was unpaid, notwithstanding that the trailers were sold to dealer for resale (Code 1930, sec. 2239).
2. LANDLORD AND TENANT.
Where seller sold automobile trailers on credit to dealer and dealer's landlord seized the trailers under an attachment writ for unpaid rent, landlord acquired a "lien" on the trailers for the rent, subject to the seller's purchase money lien (Code 1930, secs. 2175, 2239).
3. BANKRUPTCY. Sales.
When seller sold automobile trailers on credit to dealer and trailers were removed from possession of dealer under an attachment writ of dealer's landlord for unpaid rent, but seller and dealer did nothing in furtherance of such removal and bankruptcy court ordered sale of trailers with provision that liens against trailers should attach to proceeds of sale, removal of the trailers did not defeat seller's purchase money "lien" thereon, and such lien attached to the proceeds of sale of trailers (Code 1930, secs. 2239, 2175).
4. BANKRUPTCY.
Where seller sold automobile trailers on credit to dealer and dealer's landlord acquired attachment lien on trailers for unpaid rent before bankruptcy court ordered sale of trailers with provision that liens against trailers should attach to proceeds of sale, seller was entitled to proceeds of sale in preference to landlord notwithstanding that no sign had been placed at dealer's place of business indicating that seller had a lien on the trailers (Code 1930, secs. 2175, 2239, 3352).
5. PRINCIPAL AND AGENT.
The statute providing that property used in business transacted by a person with the word "agent," etc., failing to disclose the name of his principal by a sign at the person's place of business shall be liable for such person's debts does not derange the order of priority of liens among the creditors of such person (Code 1930, sec. 3352).
APPEAL from chancery court of Hinds county, HON. V.J. STRICKER, Chancellor.
Harold Cox, of Jackson, for appellants.
Appellants' vendor's lien for the unpaid purchase price of these six trailers is ahead of and superior to appellee's landlord's lien on the money in suit derived by the bankrupt court from the sale of these same trailers manufactured and sold by appellants to the bankrupt dealer.
Weiss, Dreyfous, Seiferth v. Natchez Inv. Co., Inc., 166 Miss. 253, 140 So. 736; Superior Laundry Cleaners v. American Laundry Machinery Co., 170 Miss. 450, 155 So. 186; Dodds v. Pratt, 64 Miss. 123, 8 So. 167; Kinney v. Paine, 68 Miss. 258, 8 So. 747; Payne Hardware Co. v. International Harvester Co., 110 Miss. 783, 70 So. 892; Campbell Paint Varnish Co. v. Hall, 131 Miss. 671, 95 So. 641; Shuler v. L. Grunewald Co., 113 Miss. 763, 74 So. 659; Coulter v. Blieden, 104 F.2d 29; Norris v. Trenholm, Trustee, 209 F. 827; Commercial Credit Co. v. Davidson, Trustee, 112 F.2d 54; Code of 1930, Secs. 2175, 2186, 2188, 2219, 2239, 3352; 36 C.J. 483, Sec. 1426; 36 C.J. 508, Sec. 1497; 37 C.J. 328, Sec. 40; 32 Am. Jur. 479, Sec. 597; 33 Am. Jur. 436, Sec. 33; 6 Remington on Bankruptcy (4 Ed.), Secs. 2579, 2582.
Thos. B. Bratton and L.F. Easterling, both of Jackson, for appellee.
Under the chapter of Landlord and Tenant, Tucker Latham had an inchoate right against all of the property in the place of business of the Mississippi Truck Equipment Company, and by suing out his attachment and having the trailers in question levied upon, segregated, and removed from the possession of the Mississippi Truck Equipment Company he thereby acquired under the said statute and law a first lien upon the said trailers. It is obvious, and indeed manifest, that if the bankruptcy had never occurred in this case Dorsey Brothers under the code section on Liens for Unpaid Purchase Money could not have enforced the lien against the trailers for any secret claim for unpaid purchase money because the trailers has actually been removed and were out of the possession of the Mississippi Truck Equipment Company on the seizure under writ of attachment for a valid claim for rent. As between the Mississippi Truck Equipment Company and any of their creditors, the stock of goods, which consisted of these trailers and other merchandise which were kept for sale, were subject to attachment by any creditor, and the attachment actually being levied and the trailers removed, they thereby passed out of the possession of the Mississippi Truck Equipment Company and beyond the claim of Dorsey Brothers or anyone else for any unpaid purchase money.
Epstein v. Farr, 112 Miss. 530, 73 So. 572; Pate v. Shannon, 69 Miss. 372, 13 So. 729; Barlow v. Serio, 129 Miss. 432, 91 So. 573; Towns v. Boarman, 23 Miss. 186; Paine v. Hall's Safe Lock Co., 64 Miss. 175, 1 So. 56; Merchants' Farmers' Bank v. Schaaf, 108 Miss. 121, 66 So. 402; Gumbel v. Koon, 59 Miss. 264; Quin v. Myles, 59 Miss. 375; Hall's Self-Feeding Cotton Gin Co. v. Berg, 65 Miss. 184, 3 So. 372; Quin v. Mosler Safe Co. (Miss.), 21 So. 303; Fitz Gerald v. American Mfg. Co., 114 Miss. 580, 75 So. 440; Weiss, Dreyfous Seiferth, Inc., et al. v. Natchez Inv. Co., Inc., et al., 166 Miss. 253, 140 So. 736; Columbus Buggy Co. v. Turley et al., 73 Miss. 529, 19 So. 232; Tabb v. People's Bank Trust Co. et al., 160 Miss. 22, 133 So. 137; Campbell Paint Varnish Co. v. Hall, 131 Miss. 671, 95 So. 641; Pearson v. Wm. R. Moore Dry Goods Co., 146 Miss. 225, 110 So. 709; Oldham v. Ledbetter, 1 How. (2 Miss.) 43; Peck v. Webber, 7 How. (8 Miss.) 658; Mandel v. McClure, 14 Smedes M. 11; Edwards v. Toomer, 14 Smedes M. 75; Mears v. Winslow, Smedes M. Ch. 449; Goodbar Co. v. West, 1 Miss. Dec. 447; Redus v. Wofford, 4 Smedes M. 579; Gray v. Perkins, 12 Smedes M. 622; Saunders v. Life Ins. Co., 43 Miss. 583; Cahn v. Person, 56 Miss. 360; Henderson v. Mayer, 225 U.S. 530, 56 L.Ed. 1233; Martin v. Orgain, 174 F. 772, 92 C.C.A. 246, 23 Am. Bankr. Rep. 454; Code of 1930, Secs. 2175, 2239, 3352; 1 Miss. Digest 244-245; 7 C.J.S. 433.
In March, 1938, the appellants sold and delivered to the Mississippi Truck Equipment Company, hereinafter referred to as the equipment company, six automobile trailers on deferred payments aggregating $1,746, none of which have been made. The equipment company was doing business in a building leased by it from the appellee and placed the trailers therein without any sign thereat, indicating that these appellants had a lien of any sort on the trailers. On January 1, 1938, it owed the appellee $475 unpaid rent for the preceding five months, for which he sued out an attachment for rent under which the constable seized the trailers and removed them from the leased premises, stored them elsewhere, and advertised them for sale under the warrant. Before the day set for the sale arrived, the equipment company filed a petition in bankruptcy and the sale was restrained by an order of the bankruptcy court under which the trailers were delivered by the constable to the trustee in bankruptcy. Thereafter, they were sold by this trustee on an order of the referee in bankruptcy instructing him so to do, which further provided that "if the trustee sells the property of the estate or any part thereof free and clear of liens, then and in that event all claims there — against by way of lien, mortgage, retained title contract or other encumbrance shall upon confirmation of such sale be thereby and hereby transferred to the proceeds realized therefrom, subject to further proceedings herein for the determination of the validity, amount, value and marshaling such liens, mortgages, retained title contracts and other encumbrances, as to which the proceeds shall stand in lieu of the property so sold, subject also to any and all other appropriate action."
Notice was given at this trustee's sale of the appellee's claim to a lien for rent on the trailers. No such notice was given on behalf of the appellants, but the trustee knew of its claimed lien. The appellants filed a claim in the bankruptcy court for the money received by the trustee in bankruptcy for these trailers. The appellee, as did the constable, from whose possession the trailers were taken by the trustee, filed a claim to $527.40 of the money to cover the amount due by the equipment company to the appellee and the court costs due the constable for serving the warrant. The referee in bankruptcy held, by order duly rendered, that the trustee in bankruptcy had no interest in this money and that it belonged to one of the other "of the parties hereto." The trustee then filed a bill of interpleader in the court below, paid the money to the clerk thereof, and prayed that the parties hereto be summoned to assert their claims thereto. The parties appeared and propounded their claims and pending final decree, an agreed order was entered directing the clerk to pay out of the money delivered to him by the trustee in bankruptcy the sum of $254.40 to the appellants herein, retaining the remainder until further order of the court. The evidence consists of a written agreed statement of facts and oral testimony, from which the foregoing appears. By its final decree, the court below directed its clerk out of the $527.40 remaining in his hands to pay the costs of this interpleader proceeding, the court costs incurred in the appellee's landlord attachment proceeding amounting to $52.40, and to divide the remainder thereof equally between the complainants and the appellee herein. The Dorseys appealed and Latham cross-appealed.
When the apellants sold and delivered these trailers to the equiment company on credit, although for the purpose of resale by it, the appellants thereafter had "a lien thereon for the purchase-money" while it remained in the hands of the purchaser or one deriving title or possession through it with notice that the purchase money was unpaid. Section 2239, Code of 1930. This lien continued thereon and by virtue of the hereinbefore mentioned Federal Court order attached to and continued on the money paid by the trustee in the bankruptcy to the clerk of the court below on his bill of interpleader unless the seizure of the trailers and their removal from the possession of the equipment company by the constable under the appellee's attachment for rent or Sections 2175 or 3352 of the Code of 1930 interfere therewith. When the constable seized these trailers under this attachment writ, the appellee acquired thereby a lien thereon, but it was subject to the appellants' purchase money lien. Weiss, Dreyfous, Seiferth, Inc., et al. v. Natchez Inv. Co., Inc., et al., 166 Miss. 253, 140 So. 736, with which Section 2175 of the Code does not interfere. Brunswick-Balke Company v. Murphy et al., 89 Miss. 264, 42 So. 288; Shuler, et al. v. L. Grunewald Co., Ltd., 113 Miss. 763, 74 So. 659. Whether the appellants could have enforced this lien by a seizure of the trailers while they remained on the premises leased by the equipment company from the appellee without that section's requirement is not before us for the reason that they were removed therefrom, not by nor at the instance of appellants, but under a warrant sued out by the appellee for that purpose. The removal of these trailers from the possession of the equipment company did not affect the appellants' purchase money lien thereon for neither they nor the equipment company did anything in furtherance of this removal.
The appellants and the appellee were both creditors of the equipment company, the apellants having a lien, which the appellee did not, on the trailers for the security of its debt. Consequently, Section 3352, the sign statute, has no application here for more than fifty years ago in the case of Dodds v. Pratt, 64 Miss. 123, 8 So. 167, 168, this court said that: "[This section] does not derange the order of priority [of liens] among the creditors of the person transacting business"; and again in Kinney v. Paine, 68 Miss. 258, 8 So. 747, 748, it said: "Section 1300 of the Code [sign statute] has no place in a contest between creditors of the common debtor, who used or acquired the property which is the subject of contest. It makes property subject to creditors in the state of case prescribed, but has no application as between creditors." The statute has been several times re-enacted since those cases were decided and now appears as Section 3352 of the present Code. The decree of the court below will be reversed and a decree will be rendered here awarding the $527.40 of the money paid by the trustee in bankruptcy to the clerk of the court below now remaining in his hands to the appellants and taxing the appellee with the court costs in this court and also in the court below.
So ordered.