Merchants' & Farmers' Bank v. Schaaf

Beed, J., delivered the opinion of the court. ' About the 1st of January, 1912, W. K. Martin rented a part of a store in Louisville, Mississippi, and opened business, in which he handled and dealt in pianos, organs, and musical instruments. These instruments were arranged on display in an attractive way in the part of the building occupied by him, which was the rear of the store, the front being used by his lessor, Mr. Cornwell, in carrying on a general mercantile business. The pianos were grouped in a semicircle with a piano player in the center. Attached to each piano was a tag or placard giving the selling price in letters large enough to be read from the front door. Mr. Martin had full control of the business he was conducting. He was assisted by an employee. He also asked Mr. Cornwell to help him to make sales. He rented the place of business in his own name, opened an account with the bank, upon which he checked in his own name, and took out insurance against fire on his stock of goods in his own name. The property insured being described in the policy as follows: “His entire stock of pianos, organs, stools and covers. Said stock consisting of not less than eight pianos, six organs, stools and covers to match, now situated in the storehouse of I. F. Cornwell & Co., in the town of Louisville, Mississippi.” No license to carry on the business was issued to Martin. There was no sign at Martin’s place of business to disclose the name, of the owner of the stock of merchandise, to wit, the musical instruments, or to show that there was another person as principal or partner connected with Martin in the business. There was nothing to indicate that Martin did not own and did not have the right to sell or trade all of the musical instruments in this store, which he conducted in his own name. In January, 1912, Mr. Martin negotiated a loan from appellant, Merchants’ & Farmers’. Bank. He executed a deed of trust on the pianos and other musical instruments to se — 128 — cure Ms indebtedness. After engaging in the business in Louisville for about two months Mr. Martin left that town and vicinity, and his whereabouts had not been ascertained at the time of the trial of the case. In May, 1912, appellant brought suit by attachment against Martin. In the execution of the writ, six pianos, two organs, together with piano stools, scarfs, and covers, were levied on. Appellant appears to have abandoned any right or claim under the deed of trust. The attachment proceeded to judgment in favor of appellant. Then appellee, a corporation engaged in the manufacture and sale of pianos, and located at Chicago, Illinois, interposed its claim to all of the property levied on. The claimant’s issue was made up, and there was a jury trial. A peremptory instruction was given by the trial judge, directing verdict for claimant. Appellee abandoned its claim to the organs, and the judgment was entered only for the pianos, stools, scarfs, and covers in its favor. Judgment was entered, giving the organs to appellant. We find in the record an agreed statement of facts, and we give the same in full as follows: “In order to save time and trouble of taking depositions, it is agreed by and between counsel for the Merchants’ & Farmers ’ Bank and by counsel for Adam Schaaf that the pianos and other property involved in this lawsuit, as described in claimant’s affidavit, were shipped to W. K. Martin at Lohisville, Mississippi; by Adam Schaaf, the claimant, under and by virtue of a contract entered into between Adam Schaáf and said W. K. Martin, on January 15, 1911, wMch contract is attached hereto and made part of this agreement as Exhibit A hereto; that on delivery of the pianos involved in this litigation by Adams Schaaf to W. K. Martin the latter executed receipts therefor, one receipt for each piano, the same being filed herewith as Exhibits B, C, D, E, F, and G, and made a part hereof; that said receipts were sent by said Martin to said Schaaf for said pianos; that if said Mar — 129 — tin operated a business at Louisville, in any other way than in accordance with said contract and receipts, it was without the knowledge .or consent of said Adam Schaaf; that no payment has been made to Adam Schaaf on said pianos involved in this litigation; that Adam Schaaf had no knowledge of the mortgage or pledge of the pianos to said plaintiff; that said bank is not precluded by this agreement from objections to the exhibits herein for incompetency, irrelevancy, or immateriality, or any other specific ground not precluded by this agreement. “It is also understood that evidence may be offered by both parties on all points not covered by this agreed statement.” The contract of sale provided that the pianos furnished to Martin by appellee were to be held by him on consignment and for appellee’s benefit. Martin was to insure the instruments .against loss by fire and to pay all assessments and taxes against them while in his possession. All money and notes and other property received by him from the sale of pianos belonged to appellee until settlement was made therefor. He was to remit promptly cash collected or approved customers’ notes or leases, which were to be subject to appellee’s' approval. The receipts referred to in the agreed statement of facts provided that Martin would hold the piano received, on sale for appellee until sold, and that the proceeds of sale of the lease thereof was to be the property of appellee, and that any time before a piano was sold or leased, Martin would, upon the request of appellee, return the piano. Appellant contends that the debtor, Martin, was transacting business as a trader in his own name, without any sign indicating who was the owner of the business, and that the property levied on under the writ of attachment and claimed by appellee was used and acquired in such business, and was subject, as his property, to the satisfaction of his indebtedness. Appellant relies on section — 130 — 4784 of the Code of 1906'. This section is in the chapter on statute of frauds, and is under the subject, “Business Sign, and What to Contain.” It has been quite well known as section 1300 of the Code of 1880. It is section 4234 of the Code of 1892. It reads as follows: “If a person shall transact business as a trader or otherwise, with the addition of the words ‘agent,’ ‘factor,’ ‘and company,’ or ‘& Co.,’ or like words, and fail to disclose the name of Ms principal or partner by a sign in letters easy to be read, placed conspicuously at the house where such business is transacted, or if any person shall transact business in his own name without any such addition, all the property, stock, money, and choses in action used or acquired in such business shall, as to the creditors of any such person, be liable for his debts, and be in all respects treated in favor of his creditors as his property.” There have been numerous decisions of this court construing this section. In one of the earliest cases (Gumbel v. Koon, 59 Miss. 264), Judge Cooper, delivering the opinion of the court, said: “The object of the statute was to prevent the'assertion of secret claims to property, hs against creditors of the person who seems to be the owner of it, evidenced by his dealings with it; and it conclusively fixes the ownership to be in the person whose sign is exhibited at the place where the business is conducted, or who, in the absence of any sign, is the manager of the business.” Shortly thereafter, Judge Chalmers) in rendering the opinion of the court in Quin v. Myles, 59 Miss. 375, referred to Gumbel v. Koon, and said: “We have heretofore held that we would enforce this statute as it was written, without regard to whether the debt sought to be collected under it were antecedent or subsequent to the inauguration of the business, or whether creditors had actually been misled or not. ’ ’ In the case of Paine v. Hall Safe & Lock Co., 64 Miss. 175, 1 So. 56, wherein it was held that a safe, used in the — 131 — business of a jeweler, for which the purchase money had not been paid in full and in which the seller had retained title, was liable for rent of the premises under the statute, Judge Campbell, delivering the opinion, said: . “Where a sign is employed it must not mislead, and where there is no sign he who appears to be owner from transacting business with it or acquiring it in his business is to be so held and treated in favor of his creditors.” Judge Cooper, delivering the opinion of the court in Hall v. Berg, 65 Miss. 187, 3 So. 372, thus commented on the statute: “The field of the operation of the statute is a broad one, and within it lie all the evils intended or necessary to be relieved against. If a trader, by any sort of a contract, acquires the property with which he deals, the statute, in favor of his creditors, cuts off any secret claim which the party from whom it was acquired may have reserved by his contract, as where a conditional sale is. made. ’ ’ Appellee argues that Martin was not transacting business in his own name “as trader or otherwise.” He was transacting business. Was he doing so as a trader?' A trader is one who is engaged in trade or commerce; one who makes it a business to buy, sell, or exchange-goods; one who has transactions as a dealer in bartering and trafficking. We quote as follows from Words and Phrases, page 7049: “A trader is one engaged in trade or commerce; one who makes a business of buying and selling, or of barter; a merchant. One who was engaged in a general mercantile business was a trader, within Code, .ch. 100, par. 13, providing that ‘if any person shall transact business as a trader, with the addition of the words “factor,” “agent,” and “company,” and fail to disclose the name of his principal or partner,’ all of the property,.stock, or choses in action acquired or used in such business shall be liable for the debts of such person. Morris v. Clifton, Forge Grocery Co., 46 W. Va. 197, 32 S. E. 997, 998.” — 132 — We quote again from Words and Phrases, page 7052: “A smuggler may be a ‘trader,’ within St. 1 Jac. I, oh. 15, par. 2, as being a person who seeks his trade or living by buying and selling, although such buying and selling be illegal. Cobb v. Symonds, 5 Barn. & Ald. 516.” It was said by Peters, C. J., in delivering the opinion of the court in Sylvester v. Edgecomb, 76 Me. 499, that “any general definition of the word ‘trader,’ would fail to suit all cases. Each case has its peculiarities.” The facts in this case certainly show that Martin was engaged in transacting business as “trader or otherwise” within the meaning of the statute. He had a place of business. He had merchandise in his possession, on display in his store. . He was offering it for sale. He was selling it and attempting to make sales of it. He had transactions as a dealer. He was in commercial business. He was engaged in trade. He was a trader. It is also clear to us that the property levied on was acquired in and used in the business he was conducting. Such property was liable for his debts. It should be considered in all respects in favor of his creditors as his property. This liability is not relieved by reason of Martin’s agreement with appellee and the receipts he gave when the pianos were delivered to him. The contract was not reeordéd. Martin’s creditors had no notice of the agreement. They were not informed that he held and used for the pianos for the secret benefit of another. The evidence disclosed that the instruments were intrusted to him to be sold. Martin had the property in his possession with the right to sell and deliver it. The property was subject to the operation of the statute. Shannon v. Blum, 60 Miss. 828; Columbus Buggy Co. v. Turley & Parker, 73 Miss. 529, 19 So. 232, 32 L. R. A. 260, 55 Am. St. Rep. 550. The court erred in granting the peremptory instruction in favor of appellee. Beversed and remanded.