Richardson Manufacturing Co. v. Brooks

Strout, J.

Plaintiffs consigned certain machines to Kelley & Eastman for sale, under a written contract which provided that “all machines and proceeds of sale, whether in notes, cash or account, shall specifically be and remain the property of the Richardson Manufacturing Company, held in trust in your (Kelley & Eastman ) hands until all indebtedness incurred under this arrangement shall have been paid in full. ” The contract contained no element of sale to Kelley & Eastman, present or prospective. No title to the merchandise passed, or ever was to pass, to them. Kelley & Eastman sold of these consigned articles to the value of $205.25 to Kelley & Hanley. Kelley was a member of .both firms. Kelley & Eastman, on December 22, 1897, made an assignment to the defendant for the benefit of their creditors. At that time Kelley & Hanley had not paid for the articles purchased by them. Plaintiffs, by their agent, Hill, notified Kelley & Hanley of its claim, and directed them not to pay the amount to the defendant, as assignee of Kelley & Eastman, but to pay it to plaintiff, and Kelley & Hanley agreed to do so. Subsequently defendant demanded payment of Kelley & Hanley, who informed him of plaintiff’s claim. March 17, 1898, Kelley & Hanley paid the amount to defendant, upon his agreement to be responsible therefor, to plaintiff, if the money belonged to it. In this action for money had and received plaintiff claims to recover this amount and also $46 collected by defendant for consigned goods of plaintiff, sold by Kelley & Eastman, and not paid to them before their assignment.

A voluntary assignee, like an assignee in insolvency, takes the title of the assignor, and only that, except in the case of prior conveyance by bis assignee, in fraud of creditors. In that case he so far represents creditors that he may avoid the fraudulent conveyance. In all other respects he stands in the place of his assignor, and can assert no other or greater rights than his assignor could have done. Hutchinson v. Murchie, 74 Maine, 187.

The consignment agreement was not recorded, as provided by c. 32 of the laws of 1895. As this contract contains no element of bargain or sale, it is not within that statute. Thomas v. Parsons, 87 Maine, 203.

The consigned merchandise, while in the hands of Kelley & Eastman, was the property of plaintiff. The consignees could sell and give good title under the authority given by plaintiff, but sucb sales in law were sales by plaintiff through its factor, and the proceeds if received by the consignees, belonged to plaintiff, and were trust funds in the consignee’s hands. If, as in this case, the purchasers had not paid Kelley & Eastman, upon notice of plaintiff’s ownership, they became liable to the plaintiff for the purchase price. Rogers v. Whitehouse, 71 Maine, 226 ; Edmond v. Caldwell, 15 Maine, 340.

The indebtedness of Kelley & Hanley, after notice of plaintiff’s claim, became an indebtedness from them to the plaintiff. The defendant having received from Kelley & Hanley the proceeds of sales of plaintiff’s consigned property with notice of its title, is liable in this action. His assignors had no title to the fund, and he had none as their assignee. Having in his hands funds belonging to the plaintiff, which he had no right to retain, the law implies a promise to pay. City of Calais v. Whidden. 64 Maine, 249 ; Cumberland National Bank v. St. Clair, 93 Maine, 35.

The same result must follow as to the forty-six dollars collected by the defendant, as the proceeds of plaintiff’s goods sold on credit by Kelley & Eastman.

Judgment for plaintiff for the two sums of $205.25 and $46, with interest on tbe former from March 17,1898, and upon the latter from date of the writ.

So ordered.