Hand v. Matthews

Opinion by Mb,. Justice Potteb, This was an action of replevin to recover possession of certain machinery, fixtures and other goods and chattels. The [154] plaintiffs were the surviving and liquidating partners of the fiz-m of James C. Hand & Company, and the defendants were trustees appointed under the provisioizs of the act of assembly to wind up the joint stock association of the Barrows-Savery Company, Limited. . Upon the trial the plaintiffs offered to prove the following facts: That on December 19, 1889, the defendants offered at public sale the personal property set forth in the writ of replevin, and the same was purchased b}r the plaintiffs for the sum of $7,500. The plaintiffs paid the auctioneer $500 in cash on account of the purchase mozzey, for which the auctioneer gave them a receipt. The plaizitiffs also tezzdered the auctioneer and the defendants in paymezzt of the balance of $7,000, a receipt upon account of arrearages of interest on certain mortgages, which defendazzts declined to accept. These mortgages aggregated $50,000, and the interest due and in arrears exceeded at the time of the tender the amount of the balance due upon the purchase money. That these mortgages were executed by certaizz individuals to James C. Hand, who executed a declaratiozz of trust that he held them for James C. Hand & Company. That the BarrowsSavery Company, Limited, assuzned these zziortgages at the time of the organization of the limited partnership, and that subsequently when the defendants in this case sold the real estate, they recited in their deed that it was subject to the lien of the mortgages. That subsequent to the purchase of the goods replevied, the defendants sued the plaizitiffs’ representatives for the balance of the purchase money and also filed a bill in equity for discovery izi aid of their action at law, and in both suits averred the sale of the goods in question to the plaintiffs. That all the articles taken by the writ of replevin were essential and indispensable to the carrying on of the foundry business of the Barrows-Savery Company, Limited, and were mortgaged to the plaintiffs in this case. It was admitted that the defendazits as liquidating trustees made separate sales of the real estate and of the personal property. The trial court overruled the offer, and entered a judgment of nonsuit which the court in banc refused to take off. The question raised by this appeal is, therefore, whether the [155] facts contained in plaintiffs’ offer of testimony would, if established, have entitled them to possession of the goods replevied. It is contended that the title and right of possession of the goods became vested in the plaintiffs when they paid $500 on account of the purchase money, and received a receipt from the auctioneer. The offer does not set forth the terms and conditions of the sale nor the terms of the receipt. But in the absence of a special provision or understanding to the contrary, a cash sale is generally presumed to have been contemplated: 24 Am. & Eng. Ency. of Law (2d ed.), 1095. “An absolute payment in cash . . . . is always implied when nothing is said: ” Benjamin on Sales, sec. 706. In Welsh v. Bell, 32 Pa. 12, Mr. Justice Strong said (p. 17) : “ No agreement having been made for a credit, it was of course a contract for a cash sale and without actual delivery the property would not pass to the vendee until payment of the consideration.” In Mitchell v. Zimmerman, 109 Pa. 183, it was held that the above rule that the title to goods sold does not pass to the purchaser until the price is paid, unless payment is waived, applies to auction sales. In the present ease, we have no doubt of the right of the defendant to hold the goods until the price was fully paid, and that until then the plaintiffs were not entitled to replevy. It is not claimed that payment in full in cash was ever made; but appellants contended that the tender of a receipt for overdue interest on the mortgages was equivalent to payment. But the interest which the plaintiffs sought to use as a s et-off was not owing by the defendants. It was incurred by certain individuals who were not parties to this suit. The assumption by the Barrows-Savery Company, Limited, of the mortgages, does not make the defendants who are liquidating trustees, liable for the interest. There is no allegation that the trustees ever assumed payment for the interest upon the mortgages or were liable for it in any way. The indebtedness of the plaintiffs to the defendants arises by reason of the purchase of the goods sold by the liquidating trustees, and we do not see that any claim which the plaintiffs may have to overdue interest on the mortgages can properly be used by way of set-off as against the purchase price of the goods sold by the trustees. In making this sale the trustees were acting in a representative capacity. The act of assembly under which they were so acting [156] requires that the proceeds of the sale of the property, after defraying costs and charges, must be applied first to the payment of wages of labor, and then to the satisfaction of all other indebtedness; and the balance remaining is to be distributed among the members of the company, and not to the company itself. In no event were the plaintiffs entitled to a preference in the payment of their claim for interest, even though the liability in that respect was assumed by the partnership association ; on the contrary, the claims for wages, if any, were entitled to be first paid out of the fund. So that obviously the proper course for the plaintiffs would have been to pay in the full amount of the purchase money, and then make their claim with the other creditors of the partnership association against the fund. It does not appear from the offer that the plaintiffs had any interest' in the real estate except as mortgagees, and that alone would not give them the right of possession. The real estate appears to have been sold by the trustees in a separate transaction, but how or where or to whom is not shown; but it does appear that the new purchaser took it subject to the payment of these mortgages, and as a natural inference, the accrued interest would also be assumed. The offer of proof which was excluded shows no right of possession on the part of the plaintiffs to the goods replevied, unless it be through and by means of the purchase at the trustee’s sale of the personal property. As the full purchase money was not paid, nor was there any delivery of the goods to the plaintiff, we cannot regard the offer as sufficient to establish any right to recover, and it was therefore properly excluded. The assignments of error are overruled and the judgment is affirmed.