Court Opinion

ID: 3507814
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:18:12.374189+00
Date Added: 2024-06-11T14:16:54.865592
License: Public Domain

Concurring generally in the theory of decision, both here and in the district court, I cannot extend my agreement to its application to two substantial items in controversy. One of them consists of prepaid interest and insurance aggregating $46,905.73. Such items cannot be either current or quick assets, but it occurs to me that plaintiffs may be entitled to credit for some of them. Plainly they reduced or liquidated what otherwise would have been liabilities, and the purchasers had the benefit. It may be that the question is all one of fact and so settled by the decision below. Without going into detail, I am not convinced that as to all of these items the decision is correct as matter of law.
There is another item of "transit freight," aggregating $28,479.32, which in my opinion should be considered a quick asset, even under the definitions vouched for by counsel for defendants. The money was paid, as I understand record and argument, in advance freight on grain to be milled in transit, the money to be forthcoming from the manufactured products in the usual course of business, and so speedily returned to the corporation's treasury. It was an asset "which in the ordinary course of business will be readily and quickly realized" and so to be classified as "quick" under the terminology adopted by the American Institute of Accountants (Journal of Accountancy, January to June, 1923, p. 465). There we have, it seems to me, a question of law, to be decided on facts, none of which are in controversy, as was done in In re American K. G. Mfg. Co. 173 F. 480, 97 C.C.A. 486. There "quick," as used in a financial statement, was held to "distinguish liquid assets from those permanently *Page 308 
invested in the business, like real estate and machinery." Liquid, certainly, was this prepaid freight item. And, under this contract, "quick" also and as matter of law, in my opinion.
I agree that the other items in controversy (office and advertising supplies, $23,503.80, and "miscellaneous," $4,233.76) were not quick assets.