Duplex Printing Press Co. v. Clipper Publishing Co., Appeal, No. 76

Appeal, No. 76 | Pa. | Jan 2, 1906

Opinion by

Mr. Chief Justice Mitchell,

This is an- action of replevin to try the title to a perfecting press manufactured and delivered .by plaintiff to defendant under agreement that the title should not pass until the press was fully paid for. The purchaser (defendant) became insolvent but before plaintiff had retaken possession under its retained title, a creditor of the purchaser filed a bill, under which a receiver was appointed, who under direction of the court sold the press to- one Clarke. By leave of the court this suit was brought and Clarke allowed to intervene for the protection of his title.

At the trial the judge reserved the point whether there was any evidence on which the plaintiff could recover. While this is a permissible form of reservation in appropriate cases it was not a good or convenient one here. The real issue was whether the receiver’s sale gave Clarke a better title than that of plaintiff under its agreement, and it would have been much better to have reserved the question explicitly in that form. The facts not being disputed this was a question of law. Or the point could have been raised, though less explicitly, by a request to the court to direct a verdict for the defendant. This being reserved and the verdict taken for plaintiff the whole case would have been under control of the court, on the exact issue. The learned judge, however, in his opinion treated it on this basis and this being correct in substance the error in form was not fatal: Williams v. Crystal Lake Water Co., 191 Pa. 98" court="Pa." date_filed="1899-04-24" href="https://app.midpage.ai/document/williams-v-crystal-lake-water-co-6245289?utm_source=webapp" opinion_id="6245289">191 Pa. 98.

The contract between the original parties here was clearly one of conditional sale,, and not of bailment: Ott v. Sweat-man, 166 Pa. 217" court="Pa." date_filed="1895-01-21" href="https://app.midpage.ai/document/ott-v-sweatman-6242739?utm_source=webapp" opinion_id="6242739">166 Pa. 217. This indeed is practically conceded by the course of appellant’s argument. The references to decisions in other states upon the rights of the vendor as against creditors of the conditional vendee are therefore irrelevant. The law of Pennsylvania is settled that whatever rights the vendee may reserve as between liimself and the conditional vendee, the goods in the hands of the latter are subject to levy by his creditors : Brunswick, etc., Co. v. Hoover, 95 Pa. 508" court="Pa." date_filed="1880-11-08" href="https://app.midpage.ai/document/brunswick--balke-co-v-hoover-6236696?utm_source=webapp" opinion_id="6236696">95 Pa. 508; Forest v. Nelson, 108 Pa. 481" court="Pa." date_filed="1885-02-16" href="https://app.midpage.ai/document/forrest-v-nelson-bros-6237968?utm_source=webapp" opinion_id="6237968">108 Pa. 481.

Nor is it material that Clarke, tbe intervening purchaser, bad notice of tbe vendor’s continuing title, which is the main ground of appellant’s argument. Clarke’s title docs not depend on his status as a bona fide purchaser without notice, hut on the powers of the receiver who made the sale.

We come, therefore, to the real point of the case, which is the title that passed to the purchaser by the sale. The authority of a receiver and the effect of his action depend almost entirely on the purpose of his appointment and the extent of his powers conferred by the decree appointing him. The paper-book of the appellant is quite defective in failing to print the hill on which the receiver was appointed, the decree appointing him, or even the order of the court authorizing the sale, and as the appellee furnished no paper-book we get no assistance from that quarter. The learned judge below, however, has stated the facts very clearly, that the proceeding in which the receiver was appointed was made part of the evidence in this case and “ the bill and answer show that complainants therein proceeded in behalf of themselves as creditors, and on behalf of the other creditors of the Clipper Publishing Company, on account of the alleged insolvency of the defendant, which allegation of insolvency was admitted by the defendant corporatipn. The appointment of a receiver was, therefore, professedly made for the protection of creditors of an insol vent corporation, and the order of sale by the receiver was made to subserve their rights. The authority-conferred on the receiver came not from the creditor or from the debtor, but from the law itself.”

From this it must be assumed that the receiver in this ease represented the creditors in whose interest he was appointed, and was clothed with all the powers the creditors would have had in acting for themselves.

Tams v. Bullitt, 35 Pa. 308" court="Pa." date_filed="1860-07-01" href="https://app.midpage.ai/document/tams-v-bullitt-6231123?utm_source=webapp" opinion_id="6231123">35 Pa. 308, was an action by trustees under the insolvent law to recover money received by a third party for the use of the insolvent. The trustees were apparently appointed under the insolvent Act of June 16, 1836, P. L. 731, though the act is not mentioned in the report. By that act the insolvent before his discharge was obliged to make an assignment to trustees, and (sec. 34) such trustees were thereupon deemed to be vested with all the estate, rights, etc., of the assignor and capable of suing in their own names for all such estate, etc. In sustaining the action this court, per Strong, J., said, “ the right of plaintiffs to recover might well depend upon the question whether the transactions between William Tams and John Tams were honest or in fraud of creditors. As between the two brothers there may have been no right in John to recover money received by William, but if the money came to William’s hands in pursuance of a fraudulent arrangement the plaintiffs who were clothed with the rights of creditors could disregard that arrangement and recover when John Tams himself could not.” And again, “If by virtue of a fraudulent arrangement between John Tams and William Tams the money of the former came to the hands of the latter, assignees acting under a compulsory assignment could recover it.”

A voluntary assignee for -the benefit of creditors is a mere representative of the debtor and is bound where he would be bound: Wright v. Wigton, 84 Pa. 163" court="Pa." date_filed="1877-05-07" href="https://app.midpage.ai/document/wright--slingluff-v-wigton-6235510?utm_source=webapp" opinion_id="6235510">84 Pa. 163 ; but Tams v. Bullitt establishes the distinction that when the assignee, trustee, or whatever he may be called, derives his authority, not from the mere voluntary act of the assignor but from the mandate of the law, even when enforced in the language of that case, through a “ compulsory assignment ” from the debtor, in the interest of the creditors, he represents the latter and is vested with their powers. The same principle applies a fortiori to a receiver deriving his authority not at all- from the debtor, but altogether from the court acting in the interest and for the enforcement of the rights of creditors.

When, therefore, on a creditor’s bill, a receiver is appointed for an insolvent corporation, he is not limited like an assignee for the benefit of creditors, by the rights of the debtor corporation as to property held by it under a conditional sale, but lias the rights of a levying creditor, and a sale by him passes a good title against the vendor, irrespective of the purchaser’s status as a creditor either with or without notice.

Judgment affirmed.