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First National Bank of Ocean City v. Eastern Motor Co.

Decided: October 17, 1932.

FIRST NATIONAL BANK OF OCEAN CITY, PLAINTIFF-RESPONDENT,
v.
EASTERN MOTOR COMPANY, DEFENDANT-APPELLANT



On appeal from the Atlantic County Circuit Court.

For the appellant, Cole & Cole.

For the respondent, William Elmer Brown, Jr.

Campbell

The opinion of the court was delivered by

CAMPBELL, CHANCELLOR. This is an appeal from a judgment, directed in favor of the plaintiff below, in an action of replevin concerning six Dodge automobiles.

The members of a co-partnership known as Reid and Denight were authorized and licensed automobile dealers in Ocean City. The appellant-defendant, Eastern Motor Company, was the distributor for Dodge cars and Graham trucks in a territory including Ocean City and, as such, entered into an agreement as "dealer" with Reid and Denight as "associate dealer" on August 28th, 1926; Dodge Brothers, Incorporated, consenting thereto by endorsement of its approval on such contract. By this agreement Reid and Denight agreed to purchase from the appellant-defendant, Eastern Motor Company, as "dealer," Dodge cars and parts, at "manufacturer's price F.O.B. factory, less 22%," plus all taxes, loading charges, freight and conditioning charges if any and "payment shall be made by 'associate dealer' against delivery by 'dealer.'" The contract further provided that "for the purpose of securing payment, title to Dodge Brothers motor vehicle shall remain in "dealer" notwithstanding delivery to associate dealer until payment in full of amounts and charges * * *."

The course of dealing between Eastern Motor Company and Reid and Denight appears to have been that the motor vehicles were shipped from the factory, in Detroit, to the Eastern Motor Company, Reid and Denight or in the manufacturer's name, but, in any case the bill of lading was subject to payment of a sight draft drawn on the Eastern Motor Company. The bill of lading and sight draft were forwarded by the manufacturer to the Chelsea Safe Deposit and Trust Company, which notified the Eastern Motor Company of receipt thereof, and upon payment of the sight draft, the bill of lading was delivered by the bank to Eastern Motor Company, with an invoice. Whether payment in this manner was made upon the arrival of the cars, or before or after, does not clearly appear, and is not important.

The next step in the transaction appears to be that Reid

and Denight would pay to Eastern Motor Company, in cash, ten per cent. of the cost price of the cars, whereupon the latter would draw time drafts for the balance against Reid and Denight, payable to the order of Commercial Investment Trust (a financing corporation), and Reid and Denight would execute acceptances thereof, at the same time, executing trust receipts to the financing company; both the drafts and trust receipts, in each and all instances, applying to a single, specifically designated, vehicle. The amount of these drafts were then paid by the finance company to Eastern Motor Company, which, thereupon, released and delivered to Reid and Denight the bills of lading and they took possession of the respective cars, displayed them in their sales showroom and offered them for sale and sold them to such of the public as desired to purchase.

On November 10th, 1926, the respondent, First National Bank of Ocean City, loaned Reid and Denight, upon their promissory note, $2,500, which note becoming due December 10th, 1926, and not being paid, was protested. On December 16th, 1926, Reid and Denight executed to the respondent bank bills of sale for each of the six cars here in dispute and their unpaid, protested note, was delivered up to them. These bills of sale were recorded in the Cape May county clerk's office in the conditional sales records. Why, and how, it came to pass that they were so recorded does not appear but, we think, this is not material.

The six cars so conveyed to the bank-respondent were, at the time of the execution of said bills of sale, in a public garage of Reid and Denight, immediately adjoining their sales showroom, or were placed there immediately thereafter.

About three weeks after this transaction the Commercial Investment Trust (the financing company) took possession of some thirty cars from Reid and Denight, including the six cars here in question, and placed them in storage in ...


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