Erie R. v. Dial

Citations

• 140 F. 689
• 72 C.C.A. 183
• 1905 U.S. App. LEXIS 3950

Syllabus

<p>Bankruptcy — Preferred Claims — Wrongful Conversion and Mingling of Property.</p> <p>A manufacturing corporation, a short time before its bankruptcy, purchased rubber to manufacture into tires, which was to be paid for on delivery. The rubber was shipped with drafts attached to the bill of lading. The railroad company unloaded the rubber upon a platform near the bankrupt’s factory, on which freight destined to the bankrupt and other parties in that locality was customarily unloaded, and to which there was a switch track, and it was forthwith taken and used by the bankrupt with other rubber, in the making of tires before the drafts were presented, and the same were not paid. Claims having been made on the railroad company by the shippers for wrongful delivery, that company purchased and took assignments of the claims of the shippers against the bankrupt. Held, that the action of the bankrupt in taking possession of the rubber and mingling it with its own property without making payment therefor was wrongful, and gave it no title as against the shippers or their assignee, who succeeded to their rights, and that such assignee was entitled to recover from the bankrupt’s trustee, in preference to general creditors, the value of such portion of the rubber or its proceeds as came into his hands.</p>