291 N.W. 50 | Mich. | 1940
On September 26, 1934, defendant Staines sold, by conditional sales contract, a stock of merchandise for resale to one Leo P. Meagher, who took possession thereof on the same day. The contract was never recorded as required by 2 Comp. Laws 1929, § 9550 (Stat. Ann. § 19.381), which provides:
"Whenever any personal property is sold and delivered to any person, firm or corporation regularly engaged or about to engage in the business of buying and selling such personal property, with the condition affixed to the sale that the title thereto is to remain in the vendor of such personal property until the purchase price thereof shall have been paid, with the agreement express or implied, that the same may be resold, every such conditional sale in order for the reservation of title to be valid except as between the vendor and vendee shall be evidenced in writing and the written contract of every such conditional sale or a true copy thereof shall be filed and discharged in the same manner as chattel mortgages are required to be filed and discharged."
The vendee defaulted in the terms and conditions of the agreement, and on December 28, 1937, voluntarily surrendered to the vendor that portion of the *674 stock covered by the conditional sales contract which had not been sold by him. On January 7, 1938, Staines resold the stock to defendant Jacobson. Subsequent to December 28, 1937, and prior to the sale to Jacobson, Meagher filed a voluntary petition in bankruptcy and was adjudicated a bankrupt thereon.
The bill of complaint herein was filed by the trustee in bankruptcy, seeking a return of the merchandise or the value thereof. The trial court entered a decree ordering defendant Staines to pay forthwith to plaintiff the sum of $600 and costs, said sum being the value of the merchandise as found by him.
The statute requiring filing of the conditional sales contract in order for the reservation of title to be effective, except as between the vendor and vendee, was obviously intended for the protection of creditors extending credit during the period the instrument was not on file and subsequent mortgagees and purchasers in good faith.
We believe the rights of the trustee on the facts were determined by Union Guardian Trust Co. v. Detroit Creamery Co.,
The matter was referred to a commissioner for the taking of proofs. During the hearing, an offer was made to return the property to the trustee. The commissioner found that it had no commercial value and recommended that a decree be entered ordering *675 the property turned over to the trustee, but that no money decree be entered.
The decree of the trial court fixed the value of the property at $600, the finding being based solely on a recital in the contract whereby the goods were resold to defendant Jacobson after being repossessed by Staines. The decree should be modified, permitting a return of the merchandise as recommended by the commissioner, with the further provision that if return is not made within 30 days from the date of the filing of this opinion, the decree of the trial court shall stand affirmed, with costs to appellee. If the goods are returned within the time limited, appellant shall recover costs.
BUSHNELL, C.J., and SHARPE, POTTER, NORTH, McALLISTER, WIEST, and BUTZEL, JJ., concurred.
