Hamilton & Young v. Willing , 73 Tex. 603 ( 1889 )

Coddard, Judge.—

The written contract between Hamilton & Young of the one part and J. D. Parks of the other is clear and unmistakable. It is an agreement that the former should furnish the latter with goods to be sold by him on commission for their account, the stock in store and accounts of sales to be the property of the consignors, subject to their demand, accounts of sales to be made and remitted for semi-monthly on the first and fifteenth of each month—these relations to cease at the option of the consignors. Parol evidence was admitted which shows that Parks was to account for the goods at the prices as billed to him and that his profit was to be the price he might sell the goods at over and above the invoice price. The business was evidently conducted under the written agreement as shown by the orders for goods by Parks, his reports, and letters making remittances. There is no evidence tending to show that the agreement was changed or that there was any partnership between the parties. Parks was evidently to sell the goods as the agent of Hamilton & Young and was responsible to them for the goods sold at the invoice price; those not sold continued to be the property of the consignors.

The administrator attempted to show on the trial that Parks was the owner of the goods; that he had bought them as an ordinary customer, and that Hamilton & Young were mere creditors of the estate for the balance due on their goods. The evidence is so clearly against this proposition that we do not hesitate to say it was not established. This was not the defense set up by the administrator in his answer. Besides the general denial he set up a partnership between Parks and Hamilton & Young, and that there were other creditors to the amount of $1000 against the partnership property.

Mr. Parsons says that “a principal does not in general lose his property in his goods as long as he can trace and indentify them in the factor’s hands or into the hands of any representative of the factor, who holds them only in the factor’s right, and not in his own independent right as purchaser or pledgee.” 1 Pars, on Cont., *93.

This is true of ordinary consignments of goods for sale, even when the terms of the contract do not stipulate that the consignors are to continue owners of the goods.

It is said in Benjamin on Sales, American note, p. 6, that “ ordinarily if goods are consigned for sale it is a bailment and not a sale to the consignee; they do not become his property, or liable to be attached by his creditors, even though consigned upon a del credere commission.” It is difficult sometimes to determine when the contract is one of sale or consignment. The note above quoted from proceeds as follows: “ The fact that the goods consigned were invoiced at a stated price does not of itself constitute the transaction a sale unless the terms oí the consignment he such as to make the consignee when the goods are sold the purchaser and principal debtor for the goods.”

Among other authorities the annotator cites In re Linforth, 4 Sawyer, 370, which reviews other authorities upon the subject. In that case the goods were obtained from a manufacturing company by persons who after-wards became bankrupts. The suit was brought to have the court order payment “ by the assignees of certain moneys being the proceeds of goods sold by the bankrupts, and also to turn over certain notes and accounts for unpaid purchase money of other goods sold by them.”

The goods were obtained by the bankrupts on a written agreement that the company was to furnish Linforth, Kellogg & Co. (afterwards bankrupts) goods of their make from time to time as ordered, delivered free on the cars, at certain discounts, the purchasers to pay all freights, storage, and other charges, and to sell no other goods of the same class; to keep insured at all times for the benefit of the company; to render account of sales every three months, and to settle for all goods sold or shipped by note payable in sixty days from the dates fixed for rendering accounts of sales; tó settle for goods that may be on hand at a certain date by note with interest payable in six months if required, the company to allow further discount upon cash advanced.

The court correctly held that this contract evidenced a sale on credit, and that the “ petitioners could make no claim to the goods sold or removed from their warehouse by the bankrupts or to their proceeds.” Ho question was made as to the goods remaining in the hands of the bankrupts at the time of the bankruptcy.' The court held that the case of Ex Parte White, L. E. 6 Oh., 397, was almost identical with the one then under consideration. The court did not question the doctrine long established and approved in Hewton v. Wheeler, “that upon bankruptcy of a factor his principal may recover of the assignee any of the goods remaining unsold, or any proceeds of such goods, which the assignees themselves may have received or which remain specifically distinguishable from the mass of the bankrupt’s property.” 2 Lowell, 346.

We have already pointed out the characteristic features of the contract in the case before us which distinguish it from contracts of sale and make it a contract to consign goods for sale by the agent of the consignors. The stipulation that the consignors are to remain the owners of the goods in store subject to their demand, taken in connection with other stipulations of the contract, is conclusive. The goods sued for are identified as a part of plaintiff’s goods, and we are of opinion they should recover them from the administrator. Our conclusion is the judgment ought to be reversed and here rendered in favor of plaintiffs below.

Reversed and rendered.

Adopted April 30, 1889.