85 Wash. 539 | Wash. | 1915
The National Bank of Commerce of Spokane seeks to be adjudged a preferred claimant to certain funds which are the proceeds of the sale of certain cold storage machinery, made by the receiver of the Northwestern Cold Storage & Warehouse Company, a receiver having been appointed by the superior court in the above entitled action of Duarte v. Minnick et al., involving the insolvency of that company. The superior court having denied the relief petitioned for by the bank, it has appealed therefrom to this court.
On March 24, 1910, the Armstrong Machinery Company entered into a conditional sale contract with the Cold Storage Company for the sale of machinery for the plant then being constructed by the Cold Storage Company. This contract provided for payments to be made on the machinery from time to time as furnished, and that the title to the machinery so furnished should remain in the Armstrong Machinery Company until it was fully paid for. In our present discussion we assume that this contract was timely placed of record in the office of the auditor of Spokane county. This machinery passed into hands of the receiver with other property of the Cold Storage Company after the completion of the plant, and was thereafter, by consent of the bank, sold by the receiver, with the understanding that the bank’s claim to the proceeds of the sale should be of the same legal effect as its claim to the property theretofore made. There is now in the hands of the receiver, as the net proceeds of the sale of the machinery, the sum of $4,608.91. The bank claims this money, as it also had claimed the machinery conveyed by the conditional sale contract, by virtue of an assignment made
It is contended by counsel for the bank that it has succeeded to all the rights which the Armstrong Machinery Company had in the machinery before any of the purchase px*ice of over $9,000 had been paid to it thereon, as well as to all the rights of that company existing at the time of the formal assignment made by it to the bank when there was a balance due upon the purchase price of the machinery to that company of only $964.76, which sum was then paid 'by the bank to the Armstrong Machinery Company, and which sum, with interest thereon, was thex*eafter voluntarily paid by the receiver to the bank upon order of the court granting him permission so to do. Counsel for the bank proceed in their contention upon the theory that it has become subrogated to all the rights the Armstrong Machinery Company ever had, by virtue of having advanced to the Cold Storage Company from time to time sums aggregating $9,000 to make payments on the machinery as they fell due under the conditional sale contract, all of which it is insisted was done in compliance with an agreement and understanding that the bank should be secured by the conditional sale contract to the same extent as the Armstrong Machinery Company was secured thereby. No such understanding is evidenced in writing, but it is sought to be proven by the testimony of the president and vice president of the bank. The president of the bank testified upon the hearing before the court as follows:
“Q. Just state to the court please the nature of the transactions that the bank had with the Armstrong Machinery Company and the Cold Storage Company? A. Mr. Min-
We are unable to concur in the view that the bank acquired any interest whatever in the machinery conveyed by the conditional sale contract until it received the assignment from the Armstrong Machinery Company of its title to the machinery. Until that time, the title to the machinery was in the Armstrong Machinery Company. That company did not have a mere lien upon the machinery securing the payment of the unpaid portion of the agreed purchase price, but it possessed absolute title thereto, subject to be defeated by the payment of whatever balance was • due upon the agreed purchase price. As said by us iii Winton Motor Carriage Co. v. Broadway Automobile Co., 65 Wash. 650, 118 Pac. 817, 37 L. R. A. (N. S.) 71:
Of course the bank acquired the defeasible title to the Armstrong Machinery Company by the assignment, but it acquired by that assignment only the title of the Armstrong Machinery Company as that title then existed and was subject to be defeated by the payment of the balance of the agreed purchase price, which was then, as we have noticed, only $964.76, which sum with interest was thereafter paid in full to the bank by the receiver. This, it seems to us, as completely perfected the title of the receiver, the successor in interest of the Cold Storage Company, as if that payment had been made by the receiver directly to the Armstrong Machinery Company in the absence of an assignment to the bank. Nor do we think that the language of the assignment purporting to convey other than the Armstrong Machinery Company’s present interest aids the bank in its claims here made. The bank may have had some understanding with the Cold Storage Company that security was to be given to it in the form of “a chattel mortgage or bill of sale, or an assignment of the Armstrong Machinery Company’s security,” but the fact is that no such security was given until the assignment was'made by the Armstrong Machinery Company to the bank when only $964.76 was due it upon the conditional sale contract. The bank took the title to the machinery subject to having the title defeated by the payment to it of this sum, which was thereafter paid to it.
We conclude that the bank’s defeasible title to the machinery passed absolutely to the receiver upon the payment to it of the balance due upon the purchase price specified in
The judgment is affirmed.
Morris, C. J., Chadwick, Mount, arid Holcomb, JJ., concur.