Court Opinion

ID: 9809965
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:35:37.493695+00
Date Added: 2024-06-11T13:39:16.132625
License: Public Domain

*128Merkimon, J.,
Dissenting. I cannot concur in the construction my brethren have given the contract in writing between the plaintiff and the defendant Johnson. It seems to me obvious that the former sold and intended to sell to the latter forty tons of Guano at the price mentioned, and he, in consideration thereof, wTas to execute to the plaintiff his promissory notes for the price, payable at the times and places specified. It appears that the guano was delivered. It does not appear affirmatively that Johnson executed his notes, but nothing to the contrary appearing, the inference is he did.
As a security for the payment of the notes, Johnson agreed, on his part, that the plaintiff should have a lien — in effect a chattel mortgage — upon the notes and accounts he might obtain for so much of the guano as he might be able to sell, and likewise, upon so much of the guano itself as he might fail to sell, and the notes and accounts, after the lapse of time specified, were to be delivered to and held by the plaintiff as “ collateral securitj^ for the payment of” Johnson’s notes to it. In effect the plaintiff sold Johnson the guano and took his promissory notes therefor, and at once took a mortgage of the property so sold to secure the payment of the notes.
The nature of the transaction, as well as the terms of the agreement, show that it was not the purpose of the plaintiff to place the guano in the possession and control of Johnson as its agent, charged with an express trust and power to sell the same and account to it for the proceeds of such sale. There is nothing appearing that reasonably implies such purpose. If this were so, then the words and phraseology which ordinarily plainly imply a contract of sale, must, it seems to me, be treated as meaningless, and the notes given by Johnson to the plaintiff were an empty and rediculous sham
If Johnson, having purchased the guano, had executed a formal mortgage of it or a deed of trust, conveying it to a trustee, to secure the payment of his notes to the plaintiff, *129then there could be no question that such mortgage or deed of trust would not be operative as against creditors and subsequent purchasers for value.
The agreement in question was, in my judgment, in legal effect, though not in form, such a security, and it was not registered.
If the agreement could be treated as effectuating a conditional sale, and it cannot be so treated, the result would be the same, because in that case, it would be ineffectual as against creditors and subsequent purchasers for value without registration.
Error. Reversed.