Garrison v. . Vermont Mills

MANNING, J., dissenting; HOKE, J., concurring in dissenting opinion. on 25 January, 1907, L. L. Jenkins, the appellee, was appointed receiver of the Vermont Mills in Gaston County, and took possession of all its property and effects. Among the effects so taken possession of by the receiver were a number of bales of cloth. Some of these bales were in the warehouse of the company and some in the basement. The appellant, the Cone Export and Commission Company, on 26 February, 1907, having made claim to said bales of cloth, entered into an agreement with the receiver by which said bales were sold and the proceeds were to be held to abide the decision of the court whether they should be paid to the receiver for distribution according to law among the creditors of said company, or should be paid over to the appellant. The facts found by the referee, and approved by the court, are, that on 15 March, 1906, the Vermont Mills made a contract with the Cone *Page 615 Export and Commission Company, "whereby the latter was to have exclusive sale of the products of the mill at a stipulated commission and would advance 75 per cent of the net cash value of the goods on hand stored in mill; that the goods thus advanced upon were to be billed to the Cone Company and stored in a separate warehouse and insured by the mill for the benefit of the claimant. The claimant agreed to guarantee the payment of the amount for which the goods were sold by it. The mills reserved the right to sell at its own store and to fill any contracts then in force. On 15 January, 1907, one Vaught, agent of the claimant, visited the mills in the company of its president and the superintendent (Coble), and took an inventory of all the cloth on the looms, and also that in the basement and in the warehouse, and thereupon stated that he took possession of all the cloth as the property of the said Cone Export and Commission Company, and appointed said Coble as its agent to take charge of all the cloth. At that time the Vermont Mills were indebted to the Cone Export and Commission Company in an amount in excess of the value of said cloth, and (645) was also largely indebted to other creditors, and insolvent. The judge finds as a fact that the said president of the Vermont Mills did not give his consent to the taking of the goods by Vaught, though he was present. The cloth remained in its then position till the receiver took charge on 26 January, as above stated. The claim of the appellant, the Cone Export and Commission Company, is that by virtue of its contract and the action of the said Vaught on 15 January it is entitled to the proceeds of the sale of these goods. The Cone Export and Commission Company acquired no lien by virtue of its contract of 15 March, 1906, for that was purely an executory contract that goods should be shipped to said company for sale on commission. It acquired none by virtue of its advances, for there was no lien given or recorded. Nor did the fact that the Vermont Mills had marked the goods and invoiced them to the appellant have that effect, for an invoice does not transfer the title. Dows v. Bank, 91 U.S. 630; Sturm v. Baker, 150 U.S. 328, 23 Cyc., 351. A factor has no lien upon the goods of the principal unless he holds possession of the goods. "Possession, actual or constructive, is an essential element in the factor's lien." 19 Cyc., 160, and numerous cases there cited. The appellant's claim depends, therefore, upon whether the action of Vaught on 15 January, 1907, amounted to a taking possession of said goods. We do not think that it can be so held. He appeared on the premises of the debtor, took an inventory of the cloth whether in the looms or baled up and lying in the basement and in the warehouse. Possession was not surrendered by the company, nor by any one authorized to act for it. The court finds that the president of *Page 616 the company, who was present, did not assent to Vaught taking possession. He did not obtain possession with the consent of the company nor without it, for he had no process of any court. He contented himself with directing the superintendent to take possession of the goods and hold them as agent of the Cone Company. There was no physical change in the status of the goods. The superintendent had no authority to transfer the possession of the goods, which he held as a servant for the company, to a stranger. The president so testifies without contradiction, and we know it to be so as a matter of law. The superintendent is not an officer of the company, but merely an employee. The servant could not assent to transfer the goods he held for the master to another. Vaught thereafter exercised no dominion over the goods nor took any actual possession. They remained just as they lay, (646) none the worse and none the better for the declaration of Vaught, and unmoved by anything he said or did; they remained untouched until the receiver, by the authority of the court, took possession of them as the property of the company, which had not till then voluntarily or by order of any court lost possession of them. When the receiver took possession of them, he did not take them from Vaught, but as the property of the company and lying in its mill. There being no lien upon them, the judge properly held that the claimant had no priority over the proceeds in the distribution of the proceeds by the receiver. Affirmed.