GENERAL MOTORS ACCEPTANCE CORPORATION vs. JAMES L. HALEY, assignee.

WILKINS, J. Both parties appeal from a final decree entered in a suit to obtain a declaratory decree as to their rights in the proceeds of certain goods or equipment acquired by the defendant's assignor, E. R. Millen Co., Inc., a Massachusetts corporation, under trust receipt instruments. The governing statute is the uniform trust receipts act. G. L. (Ter. Ed.) c. 255A, inserted by St. 1936, c. 264. See Associates Discount Corp. v. C. E. Fay Co. 307 Mass. 577.

About January 10, 1950, E. R. Millen Co., Inc., and the plaintiff entered into a financing arrangement, whereby the plaintiff agreed to finance the wholesale purchase of various types of merchandise, including electrical appliances, radios, and television sets. On January 20, 1950, the plaintiff filed with the Secretary of the Commonwealth a statement of trust receipt financing setting forth that the plaintiff "is or expects to be engaged in financing under trust receipt transactions the acquisitions by the trustee, E. R. Millen Company," whose chief place of business is given as 495 Trapelo Road, Belmont. The signatures to this statement were "General Motors Acceptance Corporation (Entruster)" [Note p560-1] by its assistant secretary and "E. R. Millen Trustee." [Note p560-2] Thereafter E. R. Millen Co., Inc., made arrangements with various

Page 561

suppliers of electrical appliances for the delivery of equipment financed by the plaintiff. On December 26, 1950, E. R. Millen Co., Inc., made for the benefit of its creditors a common law assignment of all its assets to the defendant. At that time a balance was due on the purchase of equipment and for finance charges. Following the assignment the defendant took possession of all the corporate assets, including the equipment financed by the plaintiff, which has since been sold by agreement. The foregoing is admitted in the pleadings.

Additional facts were found by the judge. For about one month prior to the incorporation of E. R. Millen Co., Inc., on March 31, 1948, E. R. Millen was carrying on business with two other persons under the name of E. R. Millen Company. After the formation of the corporation the business was carried on in the same location, and there was no change in the type of business or in the manner of doing it. E. R. Millen was the president, general manager, and a director of the corporation, and had authority to sign trust instruments of its behalf. About November 13, 1950, he ceased to be manager or an officer of the corporation. The merchandise was delivered to E. R. Millen Co., Inc., more than thirty days before the assignment and pursuant to trust receipts. Five trust receipts were signed "E. R. Millen Co. Inc." by an officer of the corporation. Eight trust receipts were signed "E. R. Millen Co.," which "is not the signature of the corporation."

The judge ruled that the statement filed by the plaintiff with the Secretary of the Commonwealth "did not comply with the provisions of G. L. (Ter. Ed.) c. 255A," because the trustee's name was given in the statement as "E. R. Millen Company," instead of "E. R. Millen Co., Inc.," and the statement was signed, "E. R. Millen Trustee," which is not the name of the corporation. He then ruled that four of the instruments [Note p561-1] signed in the correct name of the corporation "are trust receipts and constitute trust receipt

Page 562

transactions within the purview of G. L. (Ter. Ed.) c. 255A"; that "as to these four items the plaintiff has a `security interest [Note p562-1] as defined in Section 1 of the act"; that under Section 8, cl. 2, the plaintiff's security interest was void against a "lien creditor"; [Note p562-2] and that the plaintiff could not recover for these items. As to the eight instruments not signed in the exact corporate name, the judge ruled that they "do not constitute `trust receipt transactions' within the purview of G. L. (Ter. Ed.) c. 255A since they were not signed by the trustee as required by Section 2 (i)"; that "the plaintiff did not lose title to this merchandise, that E. R. Millen Co., Inc., never acquired title"; and that as to them the plaintiff is entitled to recover.

The validity of the statement filed with the Secretary of the Commonwealth rests upon an interpretation of c. 255A, Sections 7, 8, [Note p562-3] and 13. [Note p562-4] The requirement that a statement be

Page 563

filed in order to preserve the entruster's security interest in the goods against lien creditors is in Section 7, cl. 1 (a), and Section 8, cl. 2. That an assignee for the benefit of creditors, such as the defendant, is a lien creditor in the present circumstances if no valid statement has been filed is clear from Section 8, cl. 3 (b).

The provisions as to what a statement must contain are in Section 13. The name of the corporation being "E. R. Millen Co., Inc.," if the reasonable construction of the act is that either the designation of the trustee or its signature must be in its precise and exact corporate name, there manifestly has been no compliance here where the designation was "E. R. Millen Company" and the signature was "E. R. Millen trustee." China Clipper Restaurant, Inc. v. Yue Joe, 312 Mass. 540, 543. The purpose of the designation is that there be one centralized place for filing for the entire

Page 564

Commonwealth and there be maintained at that place an intelligible and easily available index "arranged according to the name of the trustee and containing a notation of the trustee's chief place of business as given in the statement." As a result of a notice to admit facts, it must be taken as true that "E. R. Millen Co., Inc.," is not listed among the records kept by the Secretary of the Commonwealth under Section 13, cl. 3, and that the plaintiff never filed a statement of trust receipt financing "in which `E. R. Millen Co., Inc.' was designated as a trustee," or signed as a trustee.

It is urged upon us that the statute merely requires that the trustee be so designated that a creditor or other interested person would not be misled as to the identity of the trustee; and here, it is said, no one could be deceived because of the resemblance of name, the identity of address, and the description of the goods acquired by the trustee. If we assume that there was regularity in the office of the Secretary of the Commonwealth, and that the statement was indexed under the name of the trustee as therein given, we are nevertheless of opinion that the designation was not in compliance with the act. This, we must bear in mind, is a uniform law. No pertinent decision on the present point has come to our attention. But it cannot be doubted that the statute must be construed in a way that will tend to uniform decisions in the several States. Any relaxation in strict interpretation tends, in a given case, to carry in the opposite direction and, for future cases, to open the door wider to still other variations. Even if we assume that a person consulting the index would find the way to the particular statement with which we are now concerned, we nevertheless are not sure how great a duty of investigation the statute fairly intended should be imposed upon the public, some members of which might not seek the information on file by attendance at the Secretary's office. What mainly concerns us, however, is the constructive notice sought to be imposed upon everyone as a consequence of the mere fact of filing and irrespective of investigation. In order to achieve constructive effect, it seems only right

Page 565

that there be exact compliance with the statute. After all there is no hardship for an entruster to see that the statutory requirements are met and the documents accurately executed. See In re Brownsville Brewing Co. 117 Fed. (2d) 463, 466 (C. C. A. 3). We need not pass upon the sufficiency of the signing by the trustee. The trial judge rightly ruled that the statement of trust receipt financing was invalid as not containing a proper designation of the trustee.

We next consider the judge's other ruling that the various trust receipts not signed in the precise corporate name are not trust receipt transactions under c. 255A, "Section 2 (i)." [Note p565-1] This ruling was predicated on the fact that the signatures were "E. R. Millen Co." and not "E. R. Millen Co., Inc.," and upon the statutory provision that in order to come within the act a trust receipt must be signed by the trustee. Sections 2, cl. 1 (i), and 2, cl. 2. But these subsections do not prescribe any particular form of signature. The trust receipts are not for public recording or inspection but constitute private agreements between the entruster and the trustee. There is nothing in these subsections or in the act as a whole to reveal an intent to change the common law

Page 566

of contracts as to what may be a binding form of signature on the part of a corporation. "It is well settled that a person or corporation may assume or be known by different names, and contract accordingly, and that contracts so entered into will be valid and binding if unaffected by fraud. . . . The validity, so far as third parties are concerned, of contracts entered into by a person or corporation under a name other than his or its own proper name does not depend upon whether he or it is as well known by that name as by his or its true name, but upon whether quoad the particular transaction, the name is used in good faith by the party adopting it as a descriptio personae." William Gilligan Co. v. Casey, 205 Mass. 26, 31. W. W. Britton Inc. v. S. M. Hill Co. 327 Mass. 335, 338. Cook, Corporations (8th ed.) Section 15. 19 C. J. S., Corporations, Section 1136. See Assessors of Boston v. Neal, 311 Mass. 192, 199; Century Indemnity Co. v. Bloom, 325 Mass. 52, 55. We think that there was error in the ruling that E. R. Millen Co., Inc., never acquired title to the equipment covered by those trust receipts which were signed "E. R. Millen Co."

The final decree is reversed, and a new final decree is to be entered declaring that the plaintiff has no security interest in the proceeds of any of the property described in "Exhibit B" annexed to the bill of complaint, and that title thereto is in the defendant, who is to have costs of this appeal.

So ordered.