Question
A, the manufacturer of metal sheets, entered into a contract with B, a fabricator, for supplying 500 sheets. A clause in the contract provided that
A, the manufacturer of metal sheets, entered into a contract with B, a fabricator, for supplying 500 sheets. A clause in the contract provided that the ownership of sheets would not pass to the buyer till the complete payment is made. But that provision will not prevent B from utilizing those sheets and selling the products thereof in the ordinary course of trade. At the time of entering into the contract, B paid only 50% of the amount due to A. B however fully utilized those sheets and sold all product, thereof to C against the cash payment. But before making the payment to A, B became insolvent and the receiver appointed for B's estate told A that he would get paid only on pro rata basis, like any other unsecured creditor. A seeks your advice as to whether to proceed against B or C. Advise him. Please give a detailed explanation.
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